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Why Houston estate planning documents should be revised annually

Estate planning is a very important step for people to ensure that their wishes are understood in the unfortunate event of their death. Estate planning helps Houston residents prepare for the future and protect their assets and property. On April 18, in a post titled 'Estate planning in Texas merits periodic review' we brought you some helpful information about updating estate plans.

In a more recent high-asset case, a mother passed away leaving a $100 million estate for her husband and three children. Two of the children have sued, bringing new considerations to light. Just days before she died, the mother revised her wishes and signed documents entitling the funds to go directly into the marital trust rather than the bypass trust, which left her husband as the only direct heir. The daughters are now claiming that the revised document was signed under 'undue influence' and that their mother wanted them to have the maximum available inheritance.

Instead of their receiving their inheritance upon their mother's death, they must wait until their father's death because the money will be passed into a marital trust for his living expenses. Generally, wills and trusts are set up where a portion of the inheritance, which should be equal to the estate tax, will pass into a trust so that children or heirs can access it directly. In 2010, a year with no estate tax, the children would have gained access to all funds in the estate. The children will still gain access to their inheritance upon their father's death, and because their mother died in 2010, they will not be subject to estate taxes. Essentially, the daughters are suing their father for money that they are entitled to at a later date.

Cases such as this show how quickly disputes can arise out of estate planning issues. In this case, the written wishes of the mother were honored by the court; however, the daughters are still unsatisfied and believe misconduct may have played a part in their mother's decision. Individuals in Houston who have already drafted estate planning documents may take this case as an example of the importance of revising it to consider annual law changes. Doing so may help avoid family quarrels when it comes time to execute the decedent's wishes.

Source: financial-planning.com, "Family Feud Illustrates Importance of Revising Estate Plans Annually," Ann Marsh, July 20, 2012

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