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Houston Probate & Estate Administration Law Blog

The formalities of a valid will in Texas

Most of us understand the importance of having a valid will, but very few understand the requirements upon which a will's validity depends. A will must satisfy two kinds of criteria to be valid. First, the will must satisfy the formal requirements of execution and being witnessed. Second, a will must satisfy the requirements relating to the testator's state of mind at the time that the will is signed.

Texas statutes specify the formal requirements for a will to be valid. First, the will must be signed by the testator or a representative acting at the testator's direction and in the presence of the testator. Second, the signing of the will must be witnessed by two or more credible and competent witnesses who sign the will in the presence of the testator. A will may be made "self-proving" if the testator executes an affidavit that complies with the applicable statute. Self-proving wills have the advantage of being provable in court without the appearance of either of the witnesses.

Living together has legal risks as a couple ages

More and more Texas couples are choosing to live together without getting married, especially if one or both partners are over the age of 50. This choice has many reasons, but according to several studies, the most prevalent reason is the memory of a difficult divorce and a wish to avoid repeating this experience. Living together has an appeal for many people who want to emphasize the emotional connection and avoid the restrictive formalities of marriage. However, living together has a number of legal risks that should be explored before beginning co-habitation.

Perhaps, the most important risk is the possibility of one partner suffering a debilitating illness or injury. In a marriage, the healthy spouse automatically has legal authority to make medical and financial decisions, but if the couple is not married, the healthy spouse has no legal right to participate in the partner's health care or financial management. This awkward problem can be avoided by both parties executing a living will and a health care power of attorney. By executing these documents, both partners can ensure that their affairs will be managed by the other partner. The two partners can also ensure that their financial affairs will be managed by the other partner by executing a financial power of attorney.

Decanting a trust in Texas

Many residents of Houston understand the meaning of "decanting" when the subject is fine wine. Decanting involves pouring a wine that has sufficiently aged into a bottle that allows the wine's sediment to separate from the wine. Decanting also adds oxygen to the aged wine to improve its flavor. The same word -- decanting -- is now being used to describe a technique for managing the assets in irrevocable trusts.

The purpose of decanting a trust is not unlike the purpose behind decanting wine: all or some of the assets in the trust are transferred to another trust to take advantage of a change in the law or in the avoid loss if the trust's investments may lose their value. The Texas legislature enacted a statutory provision allowing the decanting of irrevocable trusts in 2013.

What should you consider when considering guardian candidates?

Although no parent likes the idea of not being around or being able to care for his or her children, it is a real possibility. You may never want to consider a time when a sudden accident, illness or other event takes you out of your child's life, but it could happen to you or anyone. As a result, you undoubtedly want to prepare as best as possible.

Preparation does not mean avoiding any activity that could potentially put you in harm's way. Constantly dwelling on the possibility of death and its repercussions is not good for anyone. Still, you may want to take the time to create an estate plan and use your will to name a guardian for your child in the event that one is needed.

Johnny Cash's estate sues to stop use of famous names

In our last post, we wrote about the general fiduciary duties of executors and administrators in dealing with the assets of the decedent. Now, two of the most famous names in American show business are involved in an estate lawsuit brought by the trustee of a family trust that is intended to prohibit the use of those names. While the bar in question is located in Illinois, the names of the two singing stars involved in this lawsuit are known throughout Texas, and the legal basis of the lawsuit is based on laws that are the same in Texas as in Illinois.

The bar is called Johnny & June's, an obvious reference to country singer Johnny Cash and his wife, June Carter Cash. The lawsuit has been commenced by the John R. Cash Revocable Trust against the bar and its owners to prevent the bar's owners from using the famous names and images of the couple to promote their business without first having obtained permission of the John R. Cash Revocable Trust. The complaint also alleges that the bar is using images of Cash and Carter without the trust's permission. Both Cash and Carter died four months apart in 2003.

Understanding the fiduciary duty of a personal representative

When a resident of Texas dies, the property of the decedent must be distributed to the decedent's heirs and beneficiaries according to state law. If the person dies with a will, the person who oversees the collection and distribution of the decedent's estate is called an executor. If a person dies without a will, the state will appoint a person called an administrator to oversee the liquidation of the decedent's estate. In both cases, the person who is put in charge of handling the estate is called a "personal representative," and that person owes a fiduciary duty to the estate and to the decedent's heirs and beneficiaries. But, what, exactly, is entailed in that fiduciary duty?

A person who owes another person or entity a fiduciary duty is required to act in a trustworthy fashion. The precise extent of the fiduciary duty depends upon the relationship. A fiduciary duty with respect to a decedent's estate means that the personal representative must collect and distribute the decedent's assets, pay creditors and applicable taxes. The personal representative cannot make false statements or conceal assets or financial records from heirs and beneficiaries.

Debts and settling an estate

Many people who become executors are unpleasantly surprised to learn that creditors can continue to seek repayment after a person's death. It is not quite as bad as it might, however. Some debts will simply go unpaid after the debtor dies. Any outstanding debts that must be paid will be paid from the estate. If there are insufficient funds in the estate to pay off all the debt, the debt collectors typically cannot get all their money back.

Executors, heirs and relatives are generally not on the hook for these debts. In fact, surviving relatives have rights under the Fair Debt Collection Practices Act, protecting them from unfair or abusive acts by debt collectors. Sometimes, debt collectors press surviving relatives, hoping to get their money back through intimidation or deception. If this happens, the relatives should talk to a lawyer right away.

What is a transfer-on-death deed?

Many Houston couples reside in a house or condominium that is owned by only one of them. In most cases, the person who owns the real estate wants to ensure that title to the property passes to the other member of the couple, if the owner should be the first to die.

In earlier decades, the preferred method of accomplishing this end was for the owner to transfer the real estate to a third person (often called a, "straw man") who then re-conveys the property to the couple jointly with a right of survivorship. A right of survivorship entitles the surviving member of the couple to automatically take title to the house upon the filing of a death certificate for the deceased member.

Where do your debts go after you pass away?

Your loved ones may be expecting to inherit certain items from your estate. Perhaps you have antiques, real estate or other valuables that you hope to leave to your children to ease their burdens after you are gone. However, without careful planning, you may be leaving them your debt as well.

The fact is that over 70% of adults leave behind thousands in debt when they die. Those who do not have a mortgage may still carry nearly $13,000 in debt, and a mortgage can hike that amount to more than $61,000. Even if your debt is manageable now, you may want to take steps to prepare for your passing to avoid leaving that burden for your loved ones to carry.

Choosing an executor for a Texas estate

Making a will can be a complex tax. The maker of the will must give considerable thought to who will be beneficiaries under the will, specific bequests of property, charitable donations and similar issues. One of the most important decisions is choosing an executor to carry out the instructions in the will. Many Texans wonder if there are rules or guidelines for choosing an executor. The answers to these questions depend in a large part on the nature of the estate.

Texas has no specific rules for choosing an executor, although minor children, a convicted felon or a non-U.S. citizen are specifically prohibited from serving as an executor. An examination of the executor's duties provides significant guidance. Executors have four principal tasks: gathering the testator's assets, paying bills, distributing the assets of the estate according to the testator's instructions and paying the expenses of administration. The executor may also be required to hire professionals, such as attorneys or accountants, to assist in administering the will. For small estates, the duties of the executor are not extensive. The most difficult task is the distribution of assets, land even that job may not be too complex. Larger estates may require far more attention.