What Unmarried Couples Need to Know About Estate Planning

The proliferation of couples choosing to live together without being married poses serious issues when it comes to estate planning. Here are some common issues that arise.

Who Gets the House?

When a couple of is married, each spouse has the right to live in the home for their lifetime after the death of their spouse, even if the spouse was the sole owner of the home.  The same is not true for unmarried couples.  Instead, if the owner of the property dies, the survivor has no right to live in the home, unless the couple takes steps to plan for this possibility.  They could create Wills that grant the survivor the right to live in the home; they could create a survivorship deed where the property automatically transferred to the survivor; or they could create a trust to hold the property for the benefit of the survivor if the property owner passed away.

Power of Attorney

If one spouse in a married couple becomes incapacitated, the other spouse has the right to make medical decisions and financial decisions regarding the community property.  This is not true if the couple is not married.  Instead, they need to give each other power of attorney to make medical and financial decisions

A Will Is a Must

If one spouse in a married couple dies without a Will, Texas law will end up dividing the assets so that the surviving spouse receives part or all of the assets.  The same is not true if a couple is unmarried.  To ensure that your assets pass to your surviving partner, a valid Will is critical.

Get Professional Help

Many things need to be considered. Remember that regular life insurance and Social Security rules don’t apply if you have no legal connection. The same goes for retirement funds. Your estate plan should also cover what happens in the case of a breakup. If you want to have your partner covered, get a professional estate planning attorney to help you out. Contact us today for help.

Is a Will Signed By Someone With Dementia Valid?

Dementia can affect many people when they reach their elder years, and the unfortunate reality is that the majority don’t have an estate plan in place before the symptoms present themselves. When dementia and other illnesses set in, that is often when the elderly begin to start their estate planning, but the question remains for many families – is a will signed by someone with dementia valid?

The answer is a little greyer than just a simple yes or no. However, in order to create a valid will in Texas, you need to have a basic understanding of who your family is, what your assets are, and how you want to divide those assets upon your death.  Whether or not a person with dementia has the capability to understand these things will obviously vary from case to case and person to person.  In these cases, it is much better to have a qualified attorney meet with the person, interview them, and determine whether the attorney thinks that they have the capacity to create a valid Will.  If so, the attorney should keep notes in his file that support his belief as to the person’s capacity.

However, this is not fool-proof. If the family is dissatisfied with the distribution of a Will, they may still be able to press the matter in court. In this event, the Will may be found invalid after extensive testimony on the testator’s mental state at the time, and a previous Will may be reinstated. However, if no previous Will exists, it will then return to the intestacy laws that can result in significant fees and loss of portions of the estate so that no one in the family will get it.

This is why it is so important to make sure that you have an estate plan in place before the symptoms of dementia set in. Drafting a Will after dementia will not only cause arguments among heirs, but it can cause a significant loss of funds to court fees and the state if it is argued over. If you are looking to craft an estate plan, contact us today.

What to do with an IRA when estate planning

What to do with an IRA when estate planning

Making a decision about the designated beneficiary of an IRA might be fairly easy. People, charities, trusts or an estate could be named. However, it is also easy to make mistakes when naming a beneficiary. Here are some of the things you should know when leaving an IRA behind.

Have the Paperwork in Order

To avoid confusion and arguments later, it is important to update estate planning documents and your IRA when changing a beneficiary. Having the proper paperwork in order is important because the IRA beneficiary designation usually takes precedence, so it should match what is in a will or trust.  If it does not match, then you should make sure that you intend for the difference.

Naming a Spouse

Spouses can roll the other’s IRA into their own name, which is beneficial if a spouse is eligible to delay required minimum distributions. If a spouse does not need the other partner’s IRA and has already passed the RMD age of 70 ½, it may be better to leave an IRA for someone else if another loved one will benefit more.

When Another Loved One Inherits

For another loved one to get the most tax-saving benefits from an IRA, it would be ideal to leave an IRA to someone who does not need the funds quickly. When not using the money right away, one can roll the money into an inherited IRA. For this to work, the grantor must name them on the designated beneficiary form. You should also discuss this with the beneficiary so that they know your intentions and what is expected.

There are several options when leaving behind an IRA. For more information about this topic and estate planning in general, contact us today.

What Rights Do You Have as a Beneficiary?

Trusts are often a valuable way to protect assets as well as to assure that they are doled out fairly to the rest of the family. However, while trust administration can be confusing, often beneficiaries may let a number of shady dealings go on simply because they don’t know their rights as a beneficiary of that trust. As a beneficiary, a slice of that trust is yours by right, so knowing your rights as one can make sure that you know what should be expected of your trust administrator.

The Rights of Trust Beneficiaries

  • You have the right to a copy of the trust if requested. By right, if you request a copy of the trust, then the trustee should provide one for you. However, if they do not, you can demand one from the court. Typically, if the trust is created as the result of someone’s death, you should receive a copy of the trust at the time that it is created.
  • You are entitled to your share of assets. While trusts can often have a number of stipulations that come with receiving your share, if you meet them, no one can keep you from your share of assets. However, even though a trust may terminate at a certain time, there may be a period for the trustee to “wind up” or close out the trust.  During that time, you may not receive the assets to which you are entitled, but you will receive them once the winding up period has concluded.
  • You have the right to see the accounting. As a beneficiary, you have the right to see what assets are in the trust, what income is received, and what expenses are being taken out.  You have the right to receive an accounting of the trust at least once a year, but the trust agreement may provide for more frequent accountings.  Likewise, some trust agreements require the trustee to automatically account, but others do not require an accounting unless you request it in writing.  To ensure that you receive an accounting regularly, you should request the accounting in writing.

In most trust litigation, it is a breach of these fundamental rights that causes conflicts. If you believe that any of your rights as a beneficiary are being impeded, contact us today.

More Tips To Pass on the Family Farm : Part II

Farm families are known to work together. They start the children young, hoping that eventually they will grow up and want to take over. This happens but so does the opposite. Many children move away instead of working on the farm.

As you age, you may be thinking of you and your children’s future, as well as what will happen to the farm. Even if you end up continuing to work, your children will start taking over.

Here are some more tips to passing on the family farm.

Have the discussion in a neutral place. Though many discussions occur around the dining room table, which is usually the only place everyone is at the same time, that is not the place for this one. Because some emotions may get tested, it might be more helpful to talk about this in the presence of a lawyer.

You may also want to include your farm’s accountant in this discussion because you are going to be talking about how well the farm is doing, what it spends on a yearly basis, how much money it brings in, and much more. By having both of these people included, it can become more of a discussion of the future of the farm. Together, you can decide who is going to be making most of the decisions, who is going to do what work, and much more.

This plan needs to be put in writing as soon as possible. Even if everyone seems to be happy, it can all change after your death. Siblings who have always gotten along may start to fight. One might want to sell the farm while others want to keep it. For this reason, it needs to be written down so you (and your family’s) wishes are carried out the way that you want.

Review it often (especially with changes that may occur to the family). Things change. While one may be interested in the farm today, they might find that they would rather do something else. Divorce, marriage, death, and even the birth of new children and grandchildren can change everything. Make sure you (and the whole family) update the plan for the farm regularly.

Once you have a plan in place, don’t forget to review it often and make changes as necessary. Your children may marry and have grandchildren. They may decide that they want to move away. You may lose someone in the family, making it necessary to make changes to the business plan for the farm.

Contact us to help you keep the farm in the family.

Estate Planning: Tips To Pass on the Family Farm

Most farm families work together through the years. Children start helping out around the farm young. Some parents hope that their children will grow up and want to take over. Some may move away but others may stay.

As you get older, you might want to think about passing the farm onto your children. Even if you stick around and help out for a few more years, you may want to give them more of the heavy lifting so you can take the breaks that you need as you age.

Here are some tips to passing on the family farm.

Decide that you are going to make a succession plan. The first step in the process is deciding that everyone involved wants to come up with a plan of passing the farm on and then putting it on paper!

Involve everyone in the family. Even if you have a child who is not interested in the farm, he or she should be involved in the discussion. You can’t just hand over the farm without giving your other children something. That is simply not fair. Everyone needs to be happy with the results, especially those who are not going to get the farm.

Make it a discussion about the long-term goals of the farm, not just about giving the children the farm. Many older farmers continue to farm long into their retirement years. For this reason, they may not be completely giving up the farm. Instead, they are thinking about working together and giving the children more responsibilities. Some children may start to take over, asking their parents for help when needed instead of the other way around.

Passing down the family farm might be the dream but it comes with some challenges. It is important to get everyone on board and sit down and talk about the farm. It often helps to make the discussion more about where the farm is heading and what the plan is, instead of just handing it over. You should involve your lawyer and accountant so you can truly discuss how the business is doing and where you want it to go.

Contact us to help you keep the farm in the family.

Not Every State Handles Guardianships as Well as Texas

Guardianship laws exist to ensure our loved ones and their property receive proper protection and care when they are no longer able to care for themselves (we call them “wards”). The legal process, however, can be overwhelming and intimidating. Fortunately for Texans, we have a streamlined and sophisticated guardianship system that provides the utmost protection for potential wards.

This month’s New Yorker Magazine exposes serious problems with guardianships in the State of Nevada. Sadly, in Nevada, guardianships were unnecessarily and easily imposed on many individuals, without notification or representation by an attorney. Unscrupulous people took advantage of Nevada’s relaxed guardianship laws and successfully applied to be guardians over people who were strangers, and who did not need be in a guardianship. This was happening with essentially no legal protection afforded to the wards or their families. Nevada has reportedly passed legislation to eliminate this tragic trend.

In Texas, the guardianship laws are vastly more protective, and a proposed ward’s constitutional right to due process is protected. Amongst numerous other protections, the Texas Legislature requires that close relatives of a proposed ward are notified of proceedings, and the court must appoint an attorney to protect the legal interests of all potential wards in every guardianship case in Texas.

Ford + Bergner LLP’s guardianship law experts focus on complex guardianship issues every day, and we have helped hundreds of guardianship clients. The attorneys at Ford + Bergner LLP can answer any question you may have concerning guardianships in Texas.