Houston Probate & Estate Administration Attorneys Blog

Estate planning: don't forget social media presence

2012-05-18T13:15:03Z

With the proliferation of social media websites such as Facebook, it seems that nearly everyone in Texas and elsewhere has an online life. The increase in use of these types of online sites has created a new area of consideration for those thinking about estate planning. In fact, authorities note that nearly 500,000 people with accounts on Facebook died during 2011.

When estate planning, many in Texas look to tools such as a will or a trust. These instruments are designed in a large part to direct heirs and beneficiaries in the distribution of an estate after the death of the person who created the estate plan. These documents can include specific instructions as to the distribution of many of the assets that remain after a person's death, but what about his or her Facebook page and other social media profiles?

]]> With the case of individual social media pages, there may be some question as to the wishes of the deceased person. Until recently, estate planning tools did not address a person's password-protected accounts, which became a major problem since the average person has 25 accounts that require a password to access. Now many authorities suggest that detailed information regarding passwords or other desires related to social media pages be included in estate planning documents like wills and trusts.

A social media will is a new tool in estate planning. This document can detail the wishes of a deceased person as to what to do with open online accounts. In some cases the deceased may have expressed a wish for their executor or trustee to create a memorial page for online friends to see. In other cases, the pages may be closed immediately following the death of an individual. Considering your online presence is now an important part of estate planning, so be sure to address it as you create or update an estate plan.

Source: The Atlantic, "The Government Would Like You to Write a 'Social Media Will'," Rebecca J. Rosen, May 3, 2012

Estate planning may include faith-based language

2012-05-09T18:34:11Z

When considering creating an estate plan, many in Texas and elsewhere work hard to ensure that the assets they own at the time of their deaths go to the heirs and beneficiaries of their choice. Using estate planning documents and tools, people can detail their wishes for those who survive them. In some cases, those wishes may also include religious values.

Estate planning experts note that an increasing number of people are including religious stipulations in their estate planning documents. In one recent case, a man left his estate to his grandchildren, but they could only collect it if they married within their faith. When some did not, the grandchildren did not receive their inheritances. After the man died, litigation ensued to determine the validity of the clause regarding religion. A court held that the clause was valid, and other courts have approved similar language so long as it was not seen as encouraging divorce.

]]> Estate planning authorities suggest that if a person is interested in restricting beneficiaries' inheritances based on religion, it may be wise to use an estate planning tool such as a trust. With a trust, the Texas person planning an estate can direct a trustee to distribute assets according to their wishes. However, clauses can be placed in the trust that allow the trustee some freedom to distribute assets in situations that may not have been considered by the decedent. This flexibility may limit the familial battles that can occur after the death of an individual.

There are many tools that can be used to create an estate plan. Ultimately, being comprehensive and detailed is extremely important if you hope to have your wishes followed precisely after your death.

Source: Wall Street Journal, "Joining Church and Estate," Rachel Emma Silverman, April 30, 2012

How failing to update a will nearly cost a cat its life

2012-05-03T19:45:45Z

Once an estate plan is created in Texas and elsewhere, often people forget about making changes to it as their lives change. Estate planning documents can quickly become outdated if a person does not act to make changes for life situations such as marriage, asset acquisition or a change of heart as to certain directives in an estate plan. This can cause confusion or upset for some beneficiaries after a person dies.

When a person creates estate planning documents such as a will and then does not look at it for 20-plus years, it may not adequately reflect his or her current wishes. Such may have been the case recently when an elderly lady passed away. In her will, the lady had directed that any animal owned by her at the time of her death should be euthanized. However, the woman's will was created in 1988 and hadn't been changed since.

]]> At the time of her passing, the woman owned an 11-year-old cat. The cat had been well cared for by both the lady and her neighbors up until the woman's death. Additionally, the woman had spent much of her life supporting animal-related causes. She was a regular donor to animal charities and had included bequests to many in her estate planning documents.

Because of this evidence, the trustee of her estate balked at the idea of putting the cat to death. Feeling that the lady's wishes may have changed over the course of her life, the trustee asked the court to allow the cat to live. The court heard testimony, reviewed all of the evidence and decided to overrule the will and allow the cat to be placed in a new home.

Because changes were not made to reflect the lady's new decision regarding her animals, it was necessary for the trustee to petition the court to save the cat. Although this turned out to be good news for the cat in this instance, often the court must act as directed by the will. Those in Texas may do well to be mindful of their evolving desires as they create and maintain estate planning documents.

Source: Petside, "Saving a Senior Pet: The Story of Boots," Charlotte Reed, April 16, 2012

How to handle a large inheritance

2012-04-26T20:29:05Z

Many in Texas who work to create an estate plan understandably do so with their heirs in mind. Typically hoping to make a difference in the lives of their beneficiaries, estate planners create documents that often arrange for the transfer of large sums of money to beneficiaries. But these large bequests, welcome as they may be, can create financial issues that deserve careful consideration.

Reportedly, more than $41 trillion in assets will be transferred to heirs in America over the next 50 years. These inheritances may truly be life-changing for some. For others who have already built up personal wealth, the transfers may result in larger emergency funds or money to apply toward college tuition payments or other expenses.

]]> Experts suggest that beneficiaries who inherit large sums should first take time to consider what to do with the money. Set it aside in a money market fund for a year or so while you decide what to do with it. Tax consequences and investment strategies are both important things to consider after receiving a big inheritance.

When an individual finds that he or she has inherited a large amount of money, it is important to understand the many ways this money can be handled. These options can include investments and paying off of bills, as well as funds for vacations and other opportunities. Careful planning can help beneficiaries make plans for long-term benefits that will allow them to enjoy the inheritance for many years to come.

Source: USA Today, "How to get the most from an unexpected inheritance," Sandra Block, April 9, 2012

Estate planning in Texas merits periodic review

2012-04-18T20:56:03Z

Updating an estate plan can assist Texas residents in making sure that their wishes for property distribution are followed after their deaths. A periodic review may benefit heirs as well as the individual engaged in estate planning. Additionally, making sure that an estate plan is up to date will avoid any surprises for beneficiaries when it comes time to settle an estate.

One of the areas to review concerns the distribution of assets. Life changes such as a new marriage, a divorce and the birth of a child are just a few of the circumstances that could alter a person's estate planning wishes. In some cases, a trust may be appropriate.

]]> Trusts can be beneficial in many circumstances, but sometimes they may need alterations. For example, in some instances, it may be apparent that a particular child is less in need of assets because they have already accumulated a substantial amount on their own. Consequently, it may be appropriate to consider creating a generation-skipping trust to benefit grandchildren for educational or other purposes.

Changes in estate planning tax laws are important for Texans to consider. Under current law, the estate tax exemption is $5 million. Without congressional intervention, though, the exemption will drop to $1 million at the beginning of 2013. Following these proposed changes may benefit heirs and estate planners who could be surprised by an estate tax that had not been planned for prior to death.

A schedule of assets is often created as a part of estate planning documents. This list is subject to change as a person acquires new property over a lifetime. An update to this list will ensure that property is added to trusts that may exist and otherwise act as a guide for beneficiaries and those charged with settling an estate.

Reviewing estate planning documents can benefit both the creator and potential beneficiaries. Estate planning should be important to every person and making sure that your is up to date is the best way to ensure your wishes are followed.

Source: LifeHealthPro, "5 Important Steps to Update Estate Plans," Michael S. Fischer, April 9, 2012

The importance of choosing the right trustee in Texas

2012-04-11T21:25:30Z

As many Texas residents know, trusts and wills are just two of the many estate planning tools available today. These documents, however, can control the distribution of assets after death and may be the only instructions available to your family and the court. When deciding the terms of these estate planning instruments, there are many factors to consider, including who will be best fit to manage them after your death.

A will is used in estate planning to designate a person or organization who will be the executor of the estate and also to detail the wishes of the deceased regarding the distribution of assets. A will can also be used to create a trust during the probate process. A testamentary trust may be used to pour all or some of the assets of an estate into a trust that is controlled by a designated trustee. The trustee is responsible for administering and distributing the trust as directed in the estate planning documents.

]]> The trustee has many duties to the beneficiaries of the trust. Acting in good faith and in the best interests of the beneficiaries are just a few of the duties. The trustee also must act to represent the trust in any legal matters and enforce the claims of the trust when appropriate.

When a trust is created for the benefit of minor children, the assets are not always dispersed all at once. A person considering estate planning may wish to have the assets distributed at age 18 or may decide to disperse a portion of the assets at different ages. In either case, the trustee will be in charge of the disbursement and of maintaining the assets of the trust.

Choosing a trustee is an important part of estate planning in Texas. A person considering such a selection should review all of the duties of a trustee as they consider whether to choose a relative, another individual or an institution, such as a bank, that specializes in trust administration. Knowing the duties expected of the trustee will assist in making the best choice for your assets and for your beneficiaries.

Source: The Missourian, "Common Estate Planning Mistakes Failure to Use Testamentary Trusts," Walter A. Murray Jr., March 28, 2012

How can you avoid trust issues before they arise?

2012-04-04T16:08:54Z

When Texas residents undertake the task of estate planning, the creation of trusts may become a vital part of the process. However, a successful trust may be more difficult to create than one may think. Avoiding the pitfalls of estate planning can come with some simple suggestions that can make the necessary steps easier and ensure that trusts properly prepare a person's heirs to handle their estate.

Difficulties within the family are a common pitfall when creating a trust. Feuds between family members can unnecessarily complicate sensitive matters, so it is important to ensure that whoever manages the trust possess attributes of loyalty, impartiality and prudence. Being a trustee requires wearing many hats and can sometimes lead to making difficult decisions. Ensuring that the right trustee is selected can ensure that your last wishes become a reality.

]]> Attempt to avoid arguments during the estate and trust administration process. Although with any family this is sometimes not always possible, but trust litigation cases are on the rise, so titling of assets, documenting intentions and the use of independent trustees may be utilized in order to prevent some of these problems. Unrest within the family can be common but having a strong estate plan and trustworthy administrators is important.

The most important assets in an estate are the family. Yet history is full of stories where riches have disappeared after poor communication between the family, failure to educate the next generation of heirs and mismanagement of the estate. Discussing estate matters now is better than letting it slide into disrepute later.

It's also important to plan for the possibility of beneficiaries squandering their assets. Although it's unfortunate, it can and does happen. Establish a spendthrift provision for the spouse and keep assets for children in trusts. Although conflicts may arise, estate planning is ensuring that your heirs are taken care of when you're gone. Texas citizens who are in the estate planning process should continue to plan for the future in order to continue benefit their loved ones after their passing.

Source: Reno Gazette-Journal, "How to avoid some of the common trust pitfalls," Brian Loy, April 1, 2012

Beneficiaries: early estate planning in blended families

2012-03-28T22:25:12Z

Blended families are now part of the landscape here in Texas and across the country. In fact, a recent report suggests that more than 40 percent of American adults have a step-relative of some sort. As folks live longer and more marriages end in divorce, the list of possible beneficiaries for an estate continues to expand.

As the population of the country ages, the way that funds earmarked for inheritance are dispersed changes. Older people are dipping into funds that beneficiaries may have expected to inherit in order to pay for things like medical treatments and the increased cost of housing.

]]> Estate planning documents may aid an individual in planning inheritances for their chosen beneficiaries. When a family is blended, without proper foresight, a new spouse may inherit what the children of a first marriage thought was theirs. This can lead to strained relationships and even expensive and divisive litigation.

To avoid these sometimes-touchy situations, Texas residents may benefit from early estate planning. Additionally, it makes good sense to plan to update documents to reflect changing family dynamics as marriages end and new ones begin. This may offer comfort to adult children concerned about a potential inheritance.

There are many estate-planning tools to be considered as a person works to protect their beneficiaries in the context of a blended family. In some situations, estate plans can stipulate that a new spouse be permitted to remain in a home after the owner is deceased. Then, any remaining value in the home could be left to the adult children as beneficiaries upon the death of the spouse.

This sometimes complicated process is different for each situation. A careful review of personal relationships, assets and debts is an important first step in planning an estate. The effort will likely be worth it for the chosen beneficiaries when they receive their inheritance.

Source: USA Today, "With more blended families, estate planning gets ugly," Haya El Nasser, March 14, 2012

Mega gift may limit taxes for beneficiaries

2012-03-22T21:27:53Z

Texas residents may be unaware that there are many strategies in estate planning designed to limit the amount of tax due at the time of death. These strategies can include trusts, wills and mega gifts. Early estate planning can help a person maximize the potential for tax benefits to an estate and its beneficiaries.

Estate planning experts suggest that one of the tools to consider is the mega gift. In situations where large amount of assets exist, it may benefit a person to give a gift in an amount less than $5 million to beneficiaries. Under the current combined gift and estate tax, a liability will not be triggered under that large amount.

]]> At the end of this calendar year, officials report that the law may change in regards to the gift and estate tax. Though there are conversations in government regarding the upcoming change, under the current law the combined limit will drop to $1 million. This would mean that tax liabilities could arise in estates that have not planned for the upcoming limit adjustment.

As a Texas resident considers estate planning, a review of all available tools would be well advised. Many people find that a combination of estate planning strategies best satisfies their needs. This affords them the opportunity to make gifts both while alive and after death.

The value trigger for tax liability is something to consider as people review the assets in their estates. Homes, investments and insurance policies are just a few of the assets that many people hold. It would do well for a person to become familiar with current laws and possible changes for the near future as they work to create estate plans that best fit the intentions of the individuals as well as accomplish the goals set for bequests to beneficiaries.

Source: Forbes, "Should Threat of Clawback Discourage 2012 Mega Gifts?" Peter J. Reilly, March 13, 2012

Estate planning is important for all Texas residents

2012-03-16T14:48:03Z

A large number of the residents of Texas, along with other Americans, do not have proper estate planning documents, a new report says. The numbers are surprising, showing that up to 92 percent of those under the age of 35 do not even have a basic will, let alone full estate planning provisions. This can leave a person's assets unprotected and may result in a long and costly probate process when the person dies.

Many Texas residents believe that a will is unnecessary because their assets will pass directly to their spouse or children when they die. However, without this vital estate planning document, the estate of a deceased person is subject to state laws. This fact can result in assets going to beneficiaries other than what the deceased may have intended.

]]> A will is not the only estate planning document that may be helpful. A healthcare representative appointed in a healthcare directive has the responsibility to make decisions regarding the health of a person should that individual no longer be able to make those decisions, including those about life-sustaining medical care. Similarly, a durable power of attorney provides for a person to manage the finances and care of a person should they become incapacitated.

There are many documents that can make up an estate plan. Each situation is understandably different, and there are many considerations that include the value of the estate and the wishes of the person creating the plan. It would be well advised for any person considering creating an estate plan to periodically review all elements of their estate to ensure that changing laws and personal circumstances have not made prior estate planning provisions obsolete.

Source: Chicago Tribune, "What Type of Estate and Tax Planning Do I Need to Do?: Without a will, your assets could be held in probate court and distributed according to state law," Susan Johnston, Feb. 28, 2012

Take advantage of estate tax laws before they change

2012-03-08T17:03:12Z

With so many changes to estate taxes and how they are structured, it may be difficult for many Texas residents to keep it all straight. That is where estate planning comes in. By working with a dedicated professional, it may be possible to create a plan that maximizes the size of the estate while minimizing the impact of taxes.

In that vein, readers may be interested to hear of possible changes to estate taxes at the end of this year. For example, under current law, there is an estate tax exclusion of up to $5 million. Any amount inherited beyond this figure is taxed at a rate of up to 35 percent. However, in 2013, the exclusion will drop to $1 million if Congress takes no action, and amounts beyond this will be taxed at a rate of up to 55 percent.

]]> While even an estate tax exclusion of $1 million may seem large, many Texas residents may be surprised at how quickly they can reach that figure. The size of one's estate includes not only bank and stock accounts, but also personal property, a residence and any other real property that one owns. Failing to distribute this property in a tax-efficient manner could cause the heirs of the estate to have to pay more in taxes than they should.

But that is not the only provision that may change. Additionally, the lifetime gift-tax exclusion may drop from $5 million for individuals to just $1 million in 2013. With so many regulations set to change, it is important to take the time to conduct estate planning on a regular basis.

Source: Minuteman News Center, "What you need to know about estate tax laws," Feb. 29, 2012

Houston estate planning involves categorizing prized possessions

2012-03-01T16:07:29Z

People can become attached to their possessions and collections that have been amassed over the years, often making it difficult to let go of them. For Houston residents, strong estate planning involves taking those collections and making sure that they are well taken care of, whether that means selling them or placing them in trusts.

There have been several instances of people who have left their prized possessions to heirs, only for them later to be sold outright with little realization of their actual monetary value. Estate planning may facilitate in getting those valuable possessions appraised and perhaps having a frank discussion with children about what the items may mean, emotionally and financially.

]]> A fear by some planning their estates is that their heirs will not be as emotionally attached to an item as they are. An open discussion with heirs may help, and compiling the items into a "good, better and best" collection will allow heirs to know which items are dispensable, which items should only be sold under financial duress and which items should never be sold. This can avoid hurt feelings and misunderstandings in the future.

Ensuring that your items are passed down through family members is also a good way to keep collections intact, although it can sometimes be costly. The IRS mandates that the estate tax be paid within nine months after a death. By choosing to implement the annual gift tax exclusion of $13,000 per person, one can give important pieces of a collection to heirs and avoid any potential tax implications. For the most important items in a collection, trusts may be an option to protect those items from potential creditors.

Money may be easy to leave behind. But when it comes to a lifetime worth of items collected that have brought someone great joy, the decision about how to divide them can sometimes be agonizing. Proper estate planning in Houston can ensure that one's wishes are followed.

Source: The New York Times, "Making Plans for Prized Collections, Heartstrings Included," Paul Sullivan, Feb. 24, 2012

Whitney Houston's estate expected to grow as administration begins

2012-02-24T15:18:24Z

In Texas and across the country, estate administration can be challenging when a wealthy person dies. In those instances where the deceased is a celebrity, opportunities may exist for the estate to earn substantial income from the sale of products related to the individual. Nowhere is this more true than with a music icon. We have seen it over the last three years with Michael Jackson, and we may soon see it again with the estate of Whitney Houston.

Speculation indicates that Houston left a last will and testament and that estate planning and estate administration details have been ongoing. It is believed that the singer's 18-year-old daughter, Bobbi Kristina Brown, is the primary beneficiary of her mother's estate. Since her untimely death, sales of Houston's music have soared and are expected to increase in the coming months.

]]> While no one expects the Houston estate to realize gains equal to that of Michael Jackson, her greatest hits album sold 50,000 copies in one day following her death. It is anticipated that artist royalties could earn the estate as much as $10 million over the next year. Moreover, a Sony TriStar Pictures film, "Sparkle," is due for release this fall. The estate is positioned to reap substantial rewards from the film.

Texas readers will be watching in the days and months ahead as details of Houston's estate emerge and estate administration takes center stage. Important decisions will be on tap for those charged with guiding the estate to take full advantage of income opportunities. The goal now is to organize the estate for maximum benefit and long-standing profits as her family and fans continue to seek ways to remember a unique person and her timeless music.

Source: ABC News, "Whitney Houston's Estate Expected to Get Boost After Death, But Less Than Michael Jackson," Susanna Kim, Feb. 14, 2012

Estate plan important for disposition of land

2012-02-16T18:21:32Z

Real property purchased by a party during their lifetime often becomes a part of their estate after they pass away. An estate plan created while the person is alive can direct the actions that an estate, through an executor, will take after the person dies. The options for property distribution are varied and can involve trusts or long-term asset distribution to beneficiaries. State laws, including those here in Texas, govern much of the distribution of an estate.

When an estate owns real property, the executor or their assigns may have the responsibility to maintain the land or even make decisions regarding its sale. The decisions of the executor are governed by the will left by the deceased party. This document can be very powerful and is a facet of a strong estate plan.

]]> In a case that may be of interest to Texas residents, a woman purchased a property by the seashore in Ocean County more than 50 years ago. At the time of the purchase, the property was considered unbuildable due to flooding issues. However, the land became more valuable after a project to raise it approximately 10 feet was completed in 1992. When the woman passed away in 1998, the land became a part of her estate.

After her death, her estate, through its representatives, applied for a permit to build a family home on the improved property. Initially the permit was denied and the estate sued in 2008. Then, an intent to permit was issued by the state's Department of Environmental Protection, and a 30-day review period began.

The county is currently exploring the possibility of applying for grants and other funding in order to purchase the property from the estate. The potential purchasers intend to restrict building on the land if they are able to consummate a transaction. They apparently want to halt the proposed family home construction project or other structures in the future.

Important to this matter is that the executor or their representatives must act for the benefit of the estate and its beneficiaries. This may be influenced by directions left by the deceased woman in her estate plan prior to her death. A carefully drafted estate-planning document can detail the wishes of the landowner for the benefit of one's heirs.

Source: Ocean City Gazette, "Council to consider asking for Green Acres funding for Schilling Estate," Claire Lowe, Feb. 10, 2012.

As land values rise, estate planning is essential for farmers

2012-02-08T18:28:32Z

The family farm has long been held as an ideal in the United States. Many states, including Texas, have a large number of family farms and farmers, and estate planning is often an important thing for them to take under consideration. This may be particularly true as of late because of the rapidly rising land values of farms. Over the past few years, farmland values have increased significantly, even while other property has lost equity.

The estate tax rate has been operating at a reduced rate since the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 set the tax rate at 35 percent with an exclusion rate of $5 million. The act is set to expire at the end of this year. Although Congress will debate extending the current estate tax rates during the upcoming year, the rates could return to the pre-2001 level of 55 percent, with a $1 million exclusion if the act is allowed to expire.

]]> With rising land values and the potential increase in assets associated with equipment purchases and additional land acquisitions, farmers are likely to find it relatively easy to reach a $1 million estate asset value. Creating an estate plan that will address the current assets in a family farm will help to protect much of what a farmer has worked to provide for their family. The estate plan should also be updated periodically as circumstances change, including childbirth, marriage and large asset increases. Though it is unclear if the act will be allowed to expire, there are many important reasons to consider an estate plan.

Source: Iowa Farmer Today, "Estate plan review should not wait," Zoe Martin, Feb. 2, 2012