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Estate Planning

Monday, September 26, 2016

Costs Associated with Dying Without a Will


Costs Associated with Dying Without a Will

When someone dies without a will, it is known as dying intestate.  In such cases, state law (of the state in which the person resides) governs how the person's estate is administered. For people who leave behind large estates, unless they established certain types of trusts or instituted other tax avoidance protections, there may be a tremendous tax liability for the estate to pay.

For just about everyone, the cost of having a will prepared by a skilled and knowledgeable attorney is negligible when compared to the cost of dying intestate,  since there are a number of serious consequences involved in dying without a proper will in place.

Legal Consequences

The larger your estate, the more catastrophic the consequences of dying intestate will be.
Read more . . .


Monday, September 19, 2016

Why Shouldn't I Use a Form From the Internet for My Will?


In this computer age, when so many tasks are accomplished via the internet -- including banking, shopping, and important business communications -- it may seem logical to turn to the internet when creating a legal document such as a will . Certainly, there are several websites advertising how easy and inexpensive it is to do this. Nonetheless, most of us know that, while the internet can be a wonderful tool, it also contains a tremendous amount of erroneous, misleading, and even dangerous information.

In most cases, as with so many do-it-yourself projects, creating a will most often ends up being a more efficient, less expensive process if you engage the services of a qualified attorney.  Just as most of us are not equipped to do our own plumbing repairs or automotive repairs, most of us do not have the background or experience to create our own legal documents, even with the help of written directions.
Read more . . .


Monday, September 12, 2016

Things to Consider When Picking an Executor


The role of an executor is to effectuate a deceased person’s wishes as declared in a will after he or she has passed on. The executor’s responsibilities include the distribution of assets according to the will, the maintenance of assets until the will is settled, and the paying of estate bills and debts. An old joke says that you should choose an enemy to perform the task because it is such a thankless job, even though the executor may take a fee for doing the job.
Read more . . .


Tuesday, September 6, 2016

What is an Estate Tax?


While the terms "estate tax" and "inheritance tax" are often used interchangeably, they are not synonymous. Let's try to clarify the difference.

The main difference between estate taxes and inheritance taxes is who pays the tax. The clue is in the name.  Estate taxes are paid by the deceased person’s estate before the money is distributed to their heirs.
Read more . . .


Friday, December 11, 2015

Controlling Estate Planning Through Trusts

How can I control my assets after death?

The practice of estate planning is dedicated to preserving an individual’s control over his or her assets after death. A simple will can control which individuals receive what assets, but a more thorough plan has the potential to do much more. Establishing a trust is the most common method used to exercise this kind of control. 

A trust can issue a bequest restricted by a condition; for example, a trust might be established to pay out $10,000.00 to a specific grandchild only once he or she has reached 18 years of age. Multiple payments can be made to the beneficiaries as long as the trust is funded. The trust can stipulate that the grandchild may have to graduate from college to receive the money, or even that he or she must graduate from a specific school with a minimum grade-point average or membership in a particular fraternity or sorority.

A trust can make the condition of payment as specific or as broad as the creator of the trust wishes. It may, for instance, bequeath benefits to a humanitarian organization on condition that the organization continues to provide food and shelter to the homeless. There is no limit to the number of conditions permissible in a trust document. Even when the conditions go against public policy and general norms and mores established by society, as long as the conditions may be met legally, they will usually be upheld by the court.

In order to create a trust, there must be a capital investment to fund it and a trustee must be named. The trustee is responsible for protecting the assets of the trust, investing them to the best of his or her ability, managing real estate and other long-term assets, interpreting the trust document, communicating regularly with the beneficiaries of the trust and performing all of these actions with a high level of integrity. Trust assets may be used to pay for expenses of managing the trust as well as to provide payment for the trustee if so provided for in the trust document.

If a trust document is not well written, it may be the target of a lawsuit seeking to dissolve the trust and disburse the assets held therein. Even if the trust is defended successfully, the costs of this challenge may deplete its coffers and frustrate the very reason for its creation. In order to avoid these possible pitfalls, it is important that a trust document be drafted by an experienced estate planning attorney.


Monday, November 23, 2015

Planning for Your Final Sendoff

Although most people don’t like to think about it, death is inevitable. It’s imperative that you have an estate plan in place that outlines your end of life wishes and how you would like your assets distributed upon your passing. As part of your planning, it’s important that you consider and make arrangements for your funeral or final wishes.  By planning this event before your passing, you can spare your family difficult decisions and ensure that your send off is exactly as you’d like it.

Here are a few things to consider:

Location

Funerals are not limited to funeral homes, churches or temples. If you’re not religious or if you want something different, you might ask that your relatives instead hold a memorial service in your honor at the park or even at the family vacation home.

Burial

Perhaps you hate the idea of being buried at the local cemetery and would prefer to be cremated. There are many options and having your relatives all agree upon one can be challenging. Be sure to make these wishes known as part of your funeral planning.  

Details    

You wouldn’t want someone picking the song for the first dance at your wedding so why would you want someone else deciding all of the details of an event to celebrate your life? As part of your funeral planning, list songs you might want played or poems which should be recited. If your favorite vacation was to Hawaii, you might want to brighten up the event with tropical flowers from Maui.

Obituary

It can be difficult to write about your life but for many writing their own obituary can help them reflect on the important things while giving them a chance to highlight their proudest moments. If you aren’t a writer or find this task daunting, consider writing a few bullet points for your loved ones so the information they share is accurate and provide a list of publications where it should be featured. Sure, your children may know that you belong to the book club but they may have no idea that that same group has a newsletter which should share this information with fellow members.

Virtual Passwords

Traditionally when a person died, his or her children had the task of going through the old phone book and calling contacts to inform them of the news. Today, many of us connect with friends and relatives online. To help your heirs effectively communicate information about your passing, be sure to store your online passwords in a place where your relatives can find them and access the appropriate accounts accordingly.

Paying in Advance

Funerals can be very expensive and a huge burden for many families dealing with the loss of a loved one. Luckily, with the right planning, you can prepay for your funeral and save your family the expense. Generally an attorney or a funeral director can help you to determine how much money will be needed and help you to establish a trust where it will be stored until your passing if you do not pay in advance for your final arrangements.

While planning your funeral may seem to be a depressing thought at first, it is actually empowering—allowing you to determine how you will say farewell to your loved ones and leaving you with the peace of mind that comes from knowing that you’ve taken care of every last detail so your family can celebrate your life without the added stress of planning your funeral or writing your obituary.


Monday, November 9, 2015

Mediation: Is It Right For You?

Mediation is one form of alternative dispute resolution (ADR) that allows parties to seek a remedy for their conflict without court intervention or a trial. Parties work with a mediator, who is a neutral third party. In addition to formalized training in mediation, usually, mediators also have received some training in negotiation or their professional background provides that practical experience.

Unlike a judge, a mediator does not decide the outcome of a matter or who wins; rather, a mediator facilitates communication between the parties and helps the parties identify issues and possible solutions to their conflict. The goal is for parties to compromise and reach an acceptable agreement.

Mediation can be an appealing option because it is much less adversarial. This might be important when the relationship between the parties has to continue in the future, such as between a divorcing couple with children. The process is also less formal than court proceedings.

Mediation often costs significantly less than litigation, which is another benefit. Another advantage to using mediation is that it generally takes much less time than a traditional lawsuit. Litigation can drag on for years, but mediation can typically be completed in a much shorter time frame. Court systems are embracing mediation and other forms of ADR in an effort to clear their clogged dockets. There are some programs that are voluntary, but in some jurisdictions, pursuing mediation is a mandatory step before a lawsuit can proceed to trial.

Mediation can be used in a variety of cases, and it is sometimes required by a contract between the parties. Mediators can be found through referrals from attorneys, courts or bar associations, and there are companies that specifically provide ADR services. Ideally, a mediator will have some training or background in the area of law related to your dispute.

Mediation is often a successful way to reach a settlement.

Contact our law firm today to help determine if mediation would be a valuable tool to resolve your dispute.


Wednesday, April 8, 2015

Pooled Income Trusts and Public Assistance Benefits

A Pooled Income Trust is a special kind of trust that is established by a non-profit organization. A Pooled Income Trust allows individuals of any age (typically over 65) to become financially eligible for public assistance benefits (such as Medicaid home care and Supplemental Security Income), while preserving their monthly income in trust for living expenses and supplemental needs.  All income received by the beneficiary must be deposited into the Pooled Income Trust.

In order to be eligible to deposit your income into a Pooled Income Trust, you must be disabled as defined by law. For purposes of the Trust, "disabled" typically includes age-related infirmities and special needs. The Trust may only be established by a parent, a grandparent, a legal guardian, the individual beneficiary (you), or by a court order. 

Typical individuals who use a Pooled Income Trust are: (1) elderly persons living at home who would like to protect their income while accessing Medicaid home care; (2) recipients of public benefit programs such as Supplemental Security Income (SSI) and Medicaid; (3) persons living in an Assisted Living Community under a Medicaid program who would like to protect their income while receiving Medicaid coverage.

Medicaid recipients who deposit their income into a Pooled Income Trust will not be subject to the rules that normally apply to "excess income," meaning that the Trust income will not be considered as available income to be spent down each month.  The Trust can pay for supplemental needs, medical procedures not provided through government assistance, and some other expenses not provided by government assistance programs.


Wednesday, April 1, 2015

Beware of “Simple” Estate Plans

“I just need a simple Will.”  It’s a phrase estate planning attorneys hear practically every other day.   From the client’s perspective, there’s no reason to do anything complicated, especially if it might lead to higher legal fees.  Unfortunately, what may appear to be a “simple” estate is all too often rife with complications that, if not addressed during the planning process, can create a nightmare for you and your heirs at some point in the future.   Such complications may include:

Probate - Probate is the court process whereby property is transferred after death to individuals named in a will or specified by law if there is no will. Probate can be expensive, public and time consuming.  A revocable living trust is a great alternative that allows your estate to be managed more efficiently, at a lower cost and with more privacy than probating a will.  A living trust can be more expensive to establish, but can, if fully funded, avoid a potentially complex probate proceeding. Even in states where probate is relatively simple, like Texas, you may wish to set up a living trust to hold out of state property or for other reasons.

Minor Children - If you have minor children, you not only need to nominate a guardian, but you also need to consider setting up a trust to hold property for those children. If both parents pass away, and the children do not have a trust, the children’s inheritance could be held by the court until he or she turns 18, at which time the entire inheritance may be given to the child or alternatively, a guardian of the estate must be established by the court. By setting up a trust, which doesn’t have to come into existence until you pass away, you are ensuring that any money left to your children can be used for educational and living expenses and can be administered by someone you trust.  You can also protect the inheritance you leave your children or other beneficiaries from a future divorce as well as from creditors.

Second Marriages - Couples in which one or both of the spouses have children from a prior relationship should carefully consider whether a “simple” Will is adequate. All too often, spouses execute simple Wills in which they leave everything to each other, and then divide the property among their children. After the first spouse passes away, the second spouse inherits everything. That spouse may later get remarried and leave everything he or she received to the new spouse or to his or her own children, thereby depriving the former spouse’s children of any inheritance.  Couples in such situations should consider establishing a special marital trust to ensure children of both spouses will be provided for and/or they should consider making certain provisions for their children immediately upon their death, so their children don’t have to wait until their step-parent dies in order to receive something from their deceased parent’s estate.

Taxes - Although from 2011 forward, federal estate taxes only apply to estates over $5 million for individuals and $10 million for couples, (with such amounts increasing as they are indexed for inflation each year – in 2015, the exemption for individuals is $5,430,000) that doesn’t mean that anyone with an estate under that amount should forget about tax planning. Many states still impose a state estate tax that should be planned around, although Texas does not have a separate state estate tax. 

Incapacity Planning – Estate planning is not only about death planning.  What happens if you become disabled or incapacitated?  You need to have proper documents to enable someone you trust to manage your affairs if you become incapacitated.  There are a myriad of options that you need to be aware of when authorizing someone to make decisions on your behalf, whether for your medical care or your financial, legal and property affairs.  If you don’t establish these important documents while you have capacity, your loved ones may have to go through an expensive and time-consuming guardianship or conservatorship proceeding to petition a judge to allow him or her to make decisions on your behalf.  Simple incapacity protection planning up front can potentially avoid those problems.

By failing to properly address potential obstacles, over the long term, a “simple” Will can turn out to be incredibly costly and ineffective.   An experienced estate planning attorney can provide valuable insight and offer effective mechanisms to ensure your wishes are carried out in the most efficient manner possible while providing protection and comfort for you and your loved ones for years to come.


Sunday, March 8, 2015

Problems with Joint Accounts for Inheritance

When deciding who will inherit your joint financial accounts after you die, it is important to consider that you might outlive the beneficiary you choose.  If you have added someone to your financial accounts to ensure that he or she receives this asset after you die, (like a pay on death designation or a joint account with rights of survivorship), you might be concerned about what will happen should you outlive this person.

What happens to a joint bank account in this situation depends upon the specific circumstances. For example, if a co-owner that was meant to inherit dies first, the account will automatically become the property of the surviving co-owner and will not be included in the decedent’s estate.  Upon the death of the surviving co-owner, the account will be included in their estate to be distributed pursuant to their estate plan.

It is important to make sure you coordinate your estate plan Will provisions with your joint account designations and your beneficiary designations to ensure your overall estate plan benefits the people you intend to benefit.

If you are considering adding someone to your financial accounts so that they inherit it when you die, you should contact an experienced estate planning attorney to discuss your options. 


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