Does Your House Get Taken Out of a Trust If You Refinance?

In Texas, the use of revocable living trusts is not as usual as in other states.  However, when a Texan owns real estate in another state, then it can be advantageous to place that real estate in a revocable living trust.  If you own a vacation house or other real estate outside of Texas and decide to put that property into a trust, consider that life is long and you may end up refinancing your house, but if you do, does it get taken out of the trust?

Typically when you refinance a house held in a living trust, the lender will require the owners to take it out of the trust in order to get the new loan. After the loan, you can then transfer it back in. Most often this is the case because the loan officers want to check your individual credit ratings, but it depends on the lender. Some lenders are willing to give a new loan without the living trust shuffle being necessary. However, if you are refinancing, you should expect to have to create and record the deed transferring out of the trust in order to qualify for that loan.

Frequently, owners forget to close the loop on this process by executing the deed after the refinancing to place the house back in the trust.  Because placing your vacation home into trust can allow you to avoid probate outside of Texas, it is important to remember to take this final step.

If you have held off putting your vacation house in your living trust because you think you might need to refinance someday – Don’t. Taking a house out and putting it back in is actually a relatively painless process, and a good lawyer can help walking you through the process. If you need to set up or manage a trust, contact us today.

3 Reasons Why Estate Planning Is Necessary Even If You Have No Children

If you don’t have any children, you may think that it’s not as important to make a plan for your estate. However, estate planning is important even for couples without children. Here are a few reasons why you should get in touch with an estate planning attorney right away and not push it off.

Designate Power of Attorney

It’s important to give someone you trust your power of attorney. Do this for both your financial and medical needs; it does not have to be the same person for both. Doing this will ensure that if you are incapacitated and unable to make medical or financial decisions for yourself, someone you know and trust will be able to make and carry out the right decisions for your healthcare needs and financial assets.

Designate Beneficiaries

Who will get your assets when you pass away? You may want to give them away to friends, extended relatives, or charity.  If you don’t write a Will, the court will be the one who ends up deciding what to do with your assets, and many times the extended family will fight over how best to divide your assets.

Include Your Partner

Writing a Will is especially important if you are not legally married but have a relationship with a significant person whom you would like to benefit under your Will.  If there is no legal relationship, then they won’t get access to your assets unless you include them in your will. They may not even be able to visit you in the hospital if you are incapacitated. There are many ways to include someone with whom you have a significant relationship in your estate.  A professional estate planning lawyer will be able to examine your situation and help you out.

Contact us today for all of your estate planning needs.

3 Tips for Preventing Financial Power of Attorney Abuse

It’s important to designate someone with power of attorney over your financial assets so that they can take care of your estate if you are incapacitated. One of the most common reasons people push off doing so is because of the fear of financial abuse. However, taking a few simple precautions will help prevent that.

Choose Your Agent Carefully

Sometimes people choose the person they give power of attorney to for the wrong reasons. Do not choose someone just because they are your oldest child or because they may feel hurt. It doesn’t have to be a relative, and it doesn’t have to be the same person who’s getting your medical power of attorney for healthcare decisions. Choose someone who you can absolutely trust.

Implement Oversight

You can stipulate that the one who is taking care of your estate must notify your other relatives of their decisions. Giving other relatives the power to oversee your agent’s decisions will go a long way to prevent abuse. Another thing you might want to consider doing is appointing two people to be co-agents at once. Both of these options significantly decrease the chances of abuse.

Implement Limitations

You don’t have to give someone absolute power over your estate. You may want to put in some limitations, such as not allowing them to alter the beneficiaries of your life insurance. You may also want to limit when they get control of your estate — make it clear what qualifies as being incapacitated.

Need help with estate planning? Contact us today!

What Can a Custodial Account Be Used For?

On occasion, our loved ones pass away too soon and we find ourselves in the care of a minor with a custodial account left to them by their caretaker. Typically these custodial accounts include life insurance policies, pensions, and other inheritance. Until they come of age, custodians are able to access the account in order to use that money for their care. However, how exactly can they use that money?

One common question that custodians ask is if they can use the money from that custodial account to cover funeral expenses. The unfortunate answer is no. The best rule of thumb for what you can and can’t do with a custodial account is does it benefit the minor? Paying for a funeral, even for the parent of a minor, doesn’t benefit them. Paying for their school tuition, on the other hand, does benefit them. So if you are considering what you can and can’t do with the funds in the account of a minor in your care, typically you need to ask yourself if it truly does benefit them. If you are discovered using the funds frivolously, there can be serious consequences for it.

No matter whether you were left with the care of a minor and their money or just want to consider planning the estate for your family after you are gone, contact us today. Ford + Bergner LLP is dedicated to making sure that your wills and trusts are carried out in the best regard to the wishes of the deceased.

What to Consider When Developing an Estate Plan After Having a Baby

Many believe estate planning is only for those who are older, and it is certainly one of the last things they are thinking about after starting your family. However, estate planning is for people of any age, and there is actually no more important time to consider your estate planning than after you have had a child.

However, while young families may think their estate plan is as simple as your spouse then your child gets everything, it is just ever so much more involved. For instance, what if your spouse passes away too and your child is still a minor? Who will take care of your child as well as their custodial account until they come of age? Will you pick a family member to care for them and the money or just the child and leave money management up to an outside party?

Typically the best thing for young families to do, just in case, is to create a trust under their Wills that will allow a trustee to manage the child’s assets until a designated age.  Many parents leave the same person in charge of both the personal and financial decisions for their minor children, while others prefer to split the responsibilities.

If you have recently started your new family and your thoughts are turning to the future, contact us today. Ford + Bergner LLP is dedicated to making sure families are taken care of.

WSJ: Wills prevent protracted legal battles.

It’s not uncommon for emotions to run high when family members make wrongful claims to a loved one’s estate. Quibbling over who really was to get that jewelry case or the heirloom chairs can be solved by giving specific instructions in a simple will—Written instructions and witnesses are important!

But even vague language in the will may prove a headache when it comes to deciphering intentions, such as using the phrase “as they may decide” instead of providing a list of items for each beneficiary, as noted in a Wall Street Journal overview on estate planning and wills.

The article notes that parents should not dismiss the human tendency to quibble over the family possessions, even when the Will clearly spells out the disposition of assets. Often forgotten, or downplayed by parents, is the “emotional attachment” a ring, for example, may have to one sibling—even though it’s actual economic value is minimal.

When it comes to appointing an executor(s), parents should realistically evaluate the potential problems with selecting two siblings who have never gotten along, particularly if the Will does not spell out who-gets-what. If hot disputes are anticipated, then the Will should include a ‘no contest’ clause:

“…it provides that anyone who contests the will forfeits the bequest he or she has been provided…(and) there has to be enough incentive for the potential contestant to accept the bequest under the will, rather than lose everything if the contest is unsuccessful.” Sharon Klein, managing director of family office services / Wilmington Trust in New York.

 If you are looking for advice in making tough decisions for your estate plan, please contact Ford + Bergner LLP to assist you in making those decisions.

Contact us for a consultation.

Can You Appeal a Probate Decision?

Appealing a probate decision is, in many ways, very different from appealing decisions in ordinary civil cases.  In most civil cases, there is generally only one order or judgment of the court that is subject to appeal.  In probate and guardianships, however, there are numerous orders and judgments that are subject to review by the appeals court.

In the 10 largest counties in Texas, we have specialized probate courts, which generally have judges with specialized training in probate.   The specialized nature of these judges helps to ensure that their rulings are generally more well-reasoned and less likely to be overturned by the appellate court.  In the other 244 counties in Texas, the judges are not specialists in probate and guardianships.  As a result, they more often make mistakes that might lead to review by the Court of appeals.

In cases of unfavorable rulings, or worse, incorrect applications of probate law, you have the right to appeal it. However, it is always important to remember that the filing period is short. In many cases, an appeal must be filed within 20 days after the judgement was signed. Failure to file within the time limit means your case may be dismissed. From here, several factors will be key in your success including the issues presented during the original probate hearing, the nature of the testimony, and the evidence presented during the trial. However, in many cases, victory may depend on the outcomes of prior appeals on similar issues.

The ultimate tool for success, however, is to hire an attorney that can represent you to the best of their abilities. Ford + Bergner LLP has a whole team of appellate lawyers who handle appeals of probate and guardianship cases.  This team is lead by a senior attorney who is Board Certified in Civil Appellate Law and has been involved in numerous appeals of probate and guardianship cases.  If you have a probate or guardianship to challenge, will contest, probate administration contest, removal action, surcharge action, or trust dispute that you need help with, contact us today so we can help you get the best possible outcome.