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.