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FAQs:

Following are some Frequently Asked Questions encountered in my practice of the law for more than 43 years:

How do I prepare for my initial meeting with you?  Depending upon the subject matter of the meeting you should prepare as indicated below.

Estate Planning:

Bring a copy of any prior documents you wish to update, revise or replace, and a list of the changes you want to make. If you have not prepared a Will previously, think about how you want your property distributed, the person or persons you want to designate to serve as executor to settle your estate and alternates or successors. Play the “what if?” game. Ask your self, what if the person to whom I want to give a portion of my estate dies before me, to whom do I want that property or share to be given? If there will be beneficiaries under an age you believe them capable of properly managing their inheritance, consider naming a trustee to manage it for them until they attain that age. Bring a summary list of assets (values not required). You do not need to get too specific. An inventory of your household contents is not necessary. Example: My assets are my home and its contents, two vehicles, a checking and a savings account, a life insurance policy, an IRA and an investment account. Know whom you have designated as beneficiary (primary, secondary, tertiary) of a life insurance policy, an IRA, and if a bank or credit union account has survivorship rights or pay on death designation. Obtain a copy of each account agreement, if convenient.

Ancillary Documents:

Consider whom you want to appoint agent and successor under a durable (financial) power of attorney, agents and successors under a medical power of attorney, your directions regarding use of life support and whom you want appointed if you ever need a guardian of your person or estate. Residence addresses and phone numbers will be required.

Probate Matters:

Bring a copy of the decedent’s death certificate and the original Will, if any, along with a list of assets (as above described for estate planning). Try to determine if the decedent’s bank, credit union and investment accounts and CDs, and life insurance, IRAs, annuities, 401k, U. S. Savings bonds, were jointly owned with right of survivorship, pay on death, transfer on death, or had a designated beneficiary. Bring a copy of the deed for any real property [see Glossary of Terms]. The more information you provide, the more answers I can give at the initial meeting.

Business Entity Formation:

The name under which you want to conduct business. Search the telephone books of the trade area where you will conduct business, and the internet for the same or similar names. Another person or entity may have the proprietary right. Have two or more alternate names that could be used. If there will be more than one principal (owner) think about how a death, divorce, disability, retirement, desire to sell, will be handled.

Real Estate Matters:

For a purchase or sale, bring a copy of the deed and any proposed contract. For a lease or rental agreement, bring any proposed document. If you are the landlord, bring your deed. You will need to furnish the name(s) of the parties on each side of the proposed transaction. For a foreclosure, where you are the creditor, bring the deed, promissory note and deed of trust, as well as an itemization of the amounts owed and not paid.

Do you charge for an initial conference?  I charge for my time and services. If, at the initial meeting, you are in need of services which I do not provide, i.e. an area of the law in which I do not practice, I will tell you and conclude the meeting at no charge. Otherwise, I will charge a fee commensurate with the legal matter and services, including time for discussion and answering questions or giving advice. See Fees for Legal Services to obtain more information.

I need (want) a simple Will. How much will it cost?  If you really need (want) a simple Will, you don’t need to see me or any attorney. Here is one for free and, if prepared solely in your handwriting (no printing – no typing), it doesn’t have to be witnessed or notarized. See Wills, Holographic in the Glossary of Terms.

This is my Will. I give everything I own to my ____________, _______________. If he/she fails to survive me by 30 days, I give everything I own to my _______, ______________________. I appoint my ______________, _______________________, to serve as independent executor without bond. If he/she fails or refuses to serve or to continue to serve, I appoint my ____________, ________________, to serve as independent executor without bond.

Signed this the ____ day of ________________, 20____.

________________________________________________

Name Printed: _____________________________________

Fill in the blanks and select the correct pronoun.

If I move to another state, must my Will and ancillary documents be replaced?  Yes, because laws differ, [pursuant to Article IV. Section 1 of the U. S. Constituion – full faith & credit clause], but it is advisable to make it a priority to have your Texas estate planning documents reviewed by an experienced and qualified attorney in the new state. Often, if revision of the Will is needed, a Codicil will suffice and a completely new document may not be required. If you have a living trust, it may specify that the laws of the State of Texas (or some other state) control interpretation and enforcement. An alternate provision will invoke the laws of your place of residence or the laws of the residence of the trustee. Another potential concern when moving to another state are the estate and gift tax laws of that state. Texas does not assess taxes on a decedent’s estate or on lifetime gifts, but a number of states do.

I don’t want my son’s (or daughter’s) inheritance to go to or be controlled by his (or her) spouse. What can I do to prevent that?  Leave the child’s share to a Trustee (in trust). You can also use this to prevent your child’s creditors from getting the inheritance.

What is Texas law pertaining to the disposition of cremated human remains?  This is the Texas Statute: “Texas Health & Safety Code Sec. 716.304. SCATTERING REMAINS. A person my scatter cremated remains over uninhabited public land, over a public waterway or sea, or on the private property of a consenting owner. Unless the container is biodegradable, the cremated remains must be removed from the container before being scattered.”

Durable Power of Attorney:  When does my durable power of attorney become effective? It depends on the document. You may state that it is effective immediately (upon signing) or only if you become incapacitated or disabled. Does my designated agent need the original document or is a copy sufficient? Only the original will be accepted to prove the appointment and powers. A copy is only useful to indicate the contents of the original. Should I keep my power of attorney in a safe deposit box? Maybe yes, maybe no. It depends on whether your agent has access to the box or if it is needed when the bank is not open.

There is a vacant lot next to my property. As far as I can tell no one visits it or pay the taxes. I have not been able to determine who owns it. The record owner died several years ago. I regularly mow it. I’ve heard about “squatter’s rights”. If I pay the taxes, will I eventually own it? Possibly, but don’t count on it. There are four statutory periods: 3 years, 5 years, 10 years & 25 years. Each has specific requirements for establishing a claim based upon “adverse possession” (squatter’s rights). You need legal advice.

Use of online sites or software to prepare your Will:  What is your opinion? First, I think they are very risky, because the user does not possess enough knowledge to know if the document produced, e.g. a Will, is correctly prepared. Secondly, I don’t think it is possible to design software (for online use or to purchase) that can do the job dependably. While a client interview to obtain information necessary to prepare a Will usually follows a basic script, the results are more like a tree growing and branching, i.e. an answer often leads to a question not on the script or redirects the conversation. As an experiment, I went online to a major advertised site and answered the questions presented. Fortunately, it allowed reviewing the finished document before purchasing. There was so much that I wanted to revise, but the program would not allow me to do so. Further, the document was produced with a proprietary word processor that was not accessible like maybe Microsoft Word. The best I could do if I purchased the document was to retype it after receipt, but I could only do that because I have the knowledge to know its deficiencies. I have seen self-prepared Wills that did more harm than good, but usually not until the maker had died. Probably the major problem and risk in using what I call “lawyer-in-a-box” is that you get no advice.

Where should my original Will and Ancillary Documents be Stored?  In a place safe from destruction by fire, flood, windstorm, and where an adverse family member cannot destroy it, particularly after your death, if they don’t like the manner in which your estate is to be distributed. A bank safe deposit box may be suitable, but you must have someone expected to survive you as a joint renter so they can retrieve the Will after your death. That person should know where the key is located or the bank will hire a locksmith to drill the lock to open the box, then replace the lock with a new one. That will cost about $150. Ancillary Documents should be readily available. See “Ancillary Documents” in the Glossary of Terms.

To Whom Should I give a copy of my Will and Ancillary Documents?  I don’t recomend distributing copies of your Will because, if you change or replace it in the future, you should retrieve and destroy those copies. You may not want someone who was treated favorably in the prior Will to know that you changed your mind. There have been cases where a survivor destroys the new Will, claims that your Will (the prior one) is lost and attempts to probate a copy of the prior Will. Giving the persons whom you designated as agent under a Medical Power of Attorney & HIPAA Release may be a good idea since copies of those documenats are as good as originals when they are needed. Only the original of a Statutory Durable Power of Attorney may be used, and to be used when necesary, it must be available to your agent.

How often should my documents be updated?  There is no set time period or law in this regard. Documents should be updated when certain events occur, e.g., deaths, births, marriages, divorces, change in your estate, etc. Changes in law sometimes will dictate replacing or revising a document. I advise clients to actually or mentally record the date the documents were signed, then pause on or near each anniversary date to ask the question: “If I was siging the documents today, would I want any provision changed?” Repeat this annually until the 5th anniversary, then contact me. Often, a financial intitution will not accept a Statutory Durable Power of Attorney if it is older than 3-5 years.

What is your document retention policy? What happens to my file when you retire?  Texas law does not speak to this issue. In my office, we don’t keep paper files after the matter is completed. When a paper file is closed, the contents are scanned into our system and the paper is shredded. Although we maintain redundent hard drive storage and also in the cloud, there is no absolute safe storage and we don’t guarantee it. When I cease practicing law, an attempt will be made to contact each client and ask if they want their electronic file. I know that all addresses will not be good, some will have died, and some will not respond. On passage of a reasonable time period, all electronic files will be destroyed.

I own some land in another state. Must my Will be probated in that state?  The answer depends upon the law of the state where the land is located (situs). Texas courts have jurisdiction over all of your personal property (see glossary), but only over land located within its borders. Some states allow a copy of certain documents from the Texas probate to be recorded in the county (parish in LA) and situs and do not require a local probate. Check with an attorney in the situs state.

My spouse and I are having marital difficulties. What is the Texas law regarding separation?  Texas only provides for a “legal” separation when it is during a pending action for divorce. However, spouses may create (should be with a family law attorney) a binding separation agreement.

I want to buy some land, but the owner wants to retain all or some of the mineral rights. How will this affect me?  This is not unusual; in fact most sellers are very reluctant to give up mineral rights. If you don’t own 100% of the minerals (subsurface estate extending beyond a depth of 200 feet), your rights and use of the surface is servient to the rights of the mineral owner when it comes to entering the land to search for and extract the minerals. The only restriction is they must use reasonable methods according to industry standards. If you only own part of the mineral estate, you will not be solely in control of leasing (having executive rights) the mineral rights. Further, when you obtain title insurance, the title insurance company will not insure your mineral ownership. In fact, they won’t even give you an opinion about the mineral interest you will acquire. Usually, you must hire a “land man” to search the records and give you an opinion.

I have no close relatives, but want to create a living trust (see glossary). Should I appoint a bank or trust company?  You may appoint any willing and legally competent person or persons or corporate trustee. Corporate trustees will charge a fee, while an individual may not. They also are very strict about the trust powers contained in the trust document (most will require some that they dictate). Some will not serve unless the corpus of the trust is worth a minimum amount. You must talk to a representative in the trust department of the bank or trust company to find one that is willing and suitable to your needs. Friends and family members are usually less particular and restrictive, but may be entitled to a fee similar to the charges of a corporate trustee unless the fee is limited by the trust document.

I am establishing a business checking account and the bank says they will not accept or enforce the requirement of multiple signatures, such as co-signing by the president and treasurer. Is this normal?  While requiring co-signing of business accounts used to be very common, with electronic processing of bank drafts (checks), bank employees don’t look at the signature, thus cannot enforce or accept liability for a check that does not contain multiple signatures. The same problem exists when there are co-trustees (perhaps spouses, children, etc.) managing a trust. Check with the bank you intend to use and check with another if you do not get an acceptable answer.

Living Trusts: the Myths, the Hype, the Truth. Should You Trust or Not? Should you create a Living Trust? Seek the advice of a qualified attorney. Don’t believe everything that you read or hear. Particularly, reject the assertion that attorneys who advise against establishment of Living Trusts are only interested in protecting the fees they will receive when your Will is probated. Think about it. The Texas attorney will likely receive a fee equal to or greater than the probate fee for advising you in regard to the trust, drafting documents, transferring properties and continually advising you in maintaining the trust and will receive that fee now as a certainty rather the possibility of a fee when you die. There is greater monetary incentive for the attorney to advise you to establish the trust than the possibility of a probate fee sometime in the future. However, for a resident of a state that has statutory attorney’s fees for probate, odds favor the Living Trust being the best plan economically.

The Myth & Hype:

  1. Everyone should have a Living Trust.
  2. If you have a Living Trust, your estate will avoid probate.
  3. Probate should absolutely be avoided because of the expense, assets are frozen, publicity, and length of time the estate is tied up in court.
  4. If you have a Living Trust, you do not need a Will.
  5. The Living Trust is a good way to assure continuity of access to and management of your assets, even if you become legally incapacitated.
  6. With a Living Trust, you can avoid the necessity of a guardian being appointed for you if you are legally incapacitated.
  7. You can save or reduce estate and inheritance taxes by use of a Living Trust.

The Truth:

  1. A Living Trust, or any trust, is merely a tool, one of many, which might be useful in managing one’s property during life and after death. As with most tools, it is not the right one for all jobs and in all circumstances. Correctly written and appropriately used, it can offer substantial benefits. On a scale where one extreme is represented by a very young person in good health and with a modest estate, and the other extreme is represented by one who is near the end of life expectancy, in poor health and with a substantial estate, the first would not be advised to establish such a trust in most circumstances, while the other most certainly would be. In between these extremes, some should have a Living Trust while, for others, the need is marginal.
  2. The degree to which this statement , is true or false depends upon the state in which probate occurs. Since the mid 1800’s Texas has provided an easy, simple and relatively inexpensive probate procedure called “Independent Administration,” where the term “independent” refers to minimal involvement of the probate judge. To be entitled to an Independent Administration of your estate in Texas, you must say so in your Will. In some circumstances, an Independent Administration may be granted even if you don’t say so in your Will.
  3. Not true. You still need a Will, but a different kind. The term used to describe it is “pourover will” and is so-called because it pours over into the trust all property which has not been transferred prior to death. The probate of a Will is divided basically into two phases: (1) presentation and proof of the Will in court, identifying and taking control of the decedent’s property and paying the decedent’s debts and taxes; and (2) the transfer of ownership of decedent’s property to the new owners. With a Living Will, the first phase should be avoided, but the second phase occurs twice, once to place the assets under the Trustee’s control and a second time when the trust terminates and property is transferred as specified in the trust agreement. At best, only a few hundred dollars of probate expense will be avoided by establishing a Living Trust and the savings will be offset by the expense of creating and funding the trust. The savings realized by avoiding probate is much greater in most other states, because of statutes that establish the fee which is paid to the probate attorney, usually a percentage of the value of the decedent’s estate. Such fees, while sometimes calculated on a progressive scale, are most often 10%. Whether or not assets, such as bank or credit union deposit accounts are “frozen” (not accessible) after the owner’s death depends mostly on who had access when the person was alive. For instance, a joint account between husband and wife which only requires the signature of either of them will still be available to the surviving spouse without interruption. Likewise, in the case of accounts which are subject to a “right of survivorship” agreement. However, accounts held only in the decedent’s name or accounts from which funds may be withdrawn only by the owner and an agent (such as an adult child) will not be available without the appointment of an executor or administrator of the decedent’s estate. Accounts held in the name of the Trustee of the Living Trust will not be effected. Avoidance of publicity is a matter that should be of little concern. Living Trust promoters warn that the decedent’s property which is subject to probate will be listed in an inventory of estate assets and become of public record for viewing by anyone. This is true with some probate procedures, but not in others. But, so what? Information about your real estate is always of public record. Does that concern you? In 30 years, I have never known of a probate client who experienced a problem in this regard. Regarding the length of time the probate process takes, most estates where there is a well drafted Will can be completed within four to six months unless there are estate taxes to be paid, in which case complete settlement may take nine months to a year. Only in very unusual circumstances should probate last longer.
  4. ABSOLUTELY TRUE! Probably the most significant benefit of having a Living Trust becomes apparent when the Grantor subsequently becomes legally incapacitated and unable to manage his or her property. While there are alternative methods such as use of a durable power of attorney and joint tenancies, the Living Trust is the best protection from this legal disaster. That is the reason that age and health are the factors that most influence a recommendation to create a Living Trust.
  5. Maybe, maybe not. There are two types of guardianship for a legally incapacitated person. One is guardian of the person and the other guardian of the person’s estate (property). The second will probably not be necessary if all or most of the person’s assets are managed by a Trustee under a Living Trust agreement. However, the Trustee has no authority to control the Grantor. If the Grantor needs care such as is available only in a nursing home and refuses to consent to admittance, it will be necessary to have a guardian of the person appointed by the probate court. The necessity for appointment of a guardian can be avoided in most cases and should be. The process is usually very expensive and subject to more legal procedures than probate.
  6. True, but also true with a properly drafted Will. Similar provisions for a Living Trust, maximizing the use of estate tax credits (exemptions) may be utilized equally well in both Wills and Living Trusts.

My spouse and I live in the home my spouse owned prior to our marriage. I know that my spouse is leaving this property to my spouse’s children. If my spouse dies, will I have to vacate the property? What are my rights?  No. The Texas Probate Code protects you. The applicable statute provides the following: “The homestead shall not be partitioned among the heirs of the deceased during the lifetime of the surviving spouse, or so long as the survivor elects to use or occupy the same as a homestead, . . . .” This is often referred to by attorneys as the Probate Homestead in Texas.

Must my Will be probated?  The answer depends upon the type of assets you own and the extent to which you have proved for those assets to be distributed at your death by contract. In most estates, there are two categories of assets, probate and non-probate. Non-probate are assets which pass to a survivor by contract, i.e. beneficiary designation, pay-on-death, transfer-on-death or by termination of a life estate. You may designate one or more beneficiaries of a life insurance policy, annuity, IRA, 401k, etc. You may designate one or more persons of a checking or savings account as pay-on-death distributees and transfer-on-death distributees of securities. All other assets are probate assets. Settlement of ownership of landed property may often be accomplished by use of affidavits of heirship. Motor vehicle titles can be transferred by use of the DMV form “Affidavit of Heirship to Transfer a Motor Vehicle.” However, if the distribution under your Will is different from distribution to your heirs, your Will probably must be probated.

Who are my heirs? Your “heirs” are the persons who are entitled to receive a share of your estate upon your death if you do not have a Will or if your Will is not probated. Heirs are defined by state law and the law of the state where land is located controls, while the law of the state of the decedent’s domicile controls the heirship of other property. In Texas, the identification of your heirs and the share of your estate to which they are entitled are controlled by the Statutes of Descent and Distribution found in the Texas Probate Code. Although there may be considerable complexity depending upon your survivors and their relationship to you, the most common cases are:

  1. If you are survived by a spouse, and all of your children are also the children of your spouse, i.e. there are no step-children, your spouse is the sole heir of your one-half of the community property of your marriage, plus a life estate in one-third of any separate property lands, and one-third of all personal property. Your children inherit the landed property, subject to your spouse’s life estate, and two-thirds of the personal property.
  2. If you are survived by a spouse, and any one of your children is not a child of your spouse, your one-half of the community property is inherited by your children (even if one or more is also a child of your spouse) in equal shares and your separate property is inherited as in #1. The result is your spouse retains his or her one-half of the community property. This is true even if all property was titled only in the name of the surviving spouse, because of the legal presumption in Texas that all property acquired by a spouse during marriage is community property.
  3. If you are not survived by a spouse, your heirs are first your descendants (persons of blood relationship in younger generations, e.g. children, grandchildren, etc.) in order of nearest relationship. If you have no descendants, then your heirs are ascendants (persons of blood relationship in older generations, e.g. parents, grandparents, etc.) in order of nearest relationship. Distribution to heirs can become very complicated when they are of remote relationship.

Click her for a chart.  Descent & Distribution Chart

How do I disinherit a child?  The simple answer is “just don’t leave anything to him/her”. Under Texas law, there is no forced heirship, like in some states, e.g. Louisiana. You are not required to leave anything or amount to anyone. You may leave it all (in trust) for your pet so that they are cared for. However, if you don’t wish to include someone in your list of beneficiaries, you should state that you have “intentionally” not included them. Otherwise, after your death they may contest your Will on the grounds that they were mistakenly omitted. It is best, though, that you don’t state your reason for omitting them. To do so my result in a suit on the grounds of “testamenary libel”. Some include the following provision:  I have intentionally made to provision in this Will for my ___________, and they know the reason. I advise stopping after “Will” and omitting the remainderof that statement to avoid arguments.

What is a spendthrift?  A spendthrift is a person who spends, squanders, wastes, pledges as security for a debt his or her potential inheritance. A spendthrift provision in a Will or Trust states that the beneficiary may not anticipate his or her inheritance and pledge it, encumber it or use it in anyway until actually received. This protects the beneficary and the potential inheritance for a taking by creditors.

What is a “no contest” clause? Will it prevent someone from contesting (attacking) my Will?  A no contest or interrorem provision in a Will or Trust is an attempt to prevent an attack, but, by Texas Statute, is so restrictive as to make it difficult to enforce. The law states that it is not effective against a contestant who brings an action against the Will in “good faith”. Good faith is difficult to disprove. Further, if you do not make a generous bequest to the potential contestant, they won’t have much to lose.

My spouse recently died and left a Will that gives his entire estate to his former spouse. Do I have any rights? Maybe. If the marriage of your spouse and the former spouse was dissolved by divorce and the Will was made before that divorce, Texas law provides that all provisions in the Will regarding the former spouse are disregarded, i.e. the former spouse is treated as if he or she died before your spouse. If the Will had a contingent beneficiary, the estate is distributed to that beneficiary if the Will is probated. If there is no contingent beneficiary named in the Will or none that survived your spouse, the estate will be distributed to your spouse’s heirs. As the surviving spouse, you are an heir. See the FAQ above “Who are my heirs?” for a chart. This same rule applies to a Medical Power of Attorney. The former spouse is stricken as a designated agent to make medical care decisions.

What is a “Miller” trust?  A so-called Miller Trust or Qualified Income Trust may be used to allow a person to qualify for Medicaid nursing home benefits even though they have income in excess of the limit. The excess income is deposited into a bank account owned by the trust monthly and the used to pay or co-pay for the nursing home. The income limit changes on January 1st each year. For 2013, it is $2,130 per month.

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