Estate Planning

As we prepare to celebrate Valentine’s Day, let’s take a moment to ruminate on how judges through the ages have addressed love and affection. We’ll start with Justice Jackson of the US Supreme Court, who authored a dissenting opinion for a 1942 case involving two people who had left their homes and respective spouses and set up housekeeping as husband and wife. Jackson first lamented that the case involved three...

Texas has a little-known estate planning technique available to spouses – the Community Property Survivorship Agreement.  Here is how it works: both spouses sign a written agreement that all or part of their community property becomes the property of the surviving spouse upon the death of a spouse. When the first spouse dies, the other spouse automatically becomes owner of the community property. Sound simple? It has not always been that...

The State of Texas does not want your inheritance. It may end up with it anyway.   Blame it on Chapter 551, an obscure part of the Estates Code that is unhelpfully named “Payment of Estates into Treasury.”   What is Chapter 551 Under Chapter 551, you have an affirmative obligation to timely claim your inheritance. If you do not, then your inheritance will be turned over to the State of Texas. In legal circles,...

This column is for everyone who has been named or is serving as an agent under a Texas financial power of attorney. The following suggestions may not keep you from being sued or going to jail, but they should lessen the chance. Let’s follow that up with the answer to your first question, which should be “Can I really be sued or go to jail?”   Answer: Yes. You are a fiduciary...

This may come as a shock, but most of us have gotten gifting wrong for years.   The problem is that we associate gifts with traditional celebrations: birthdays, anniversaries, holidays such as Christmas. It is the event, not the recipient, that sends us frantically shopping. Without the event, we likely would not have given a gift to the recipient.     Put that way, traditional gifting sure seems backwards.   It is time to repackage the...

If you moved to Texas from a foreign state – defined as “anywhere but Texas” – then you need to update your estate planning documents. Immediately.  What documents are those? Let’s start with the Magnificent 7.   Will Your will is first up. Every adult needs a will. Texas has some very nice laws that make probating your will a breeze. The trick is to make sure your will is executed with the...

Don't Pay More Than Your Fair Share You may have noticed that your home value has sky-rocketed in the last two years. Know who else has noticed? Your local appraisal district.     That is bad news for your property tax. A higher home value means a higher property tax. You can protest your property valuation once a year. In the meantime, one good way to whittle homestead property taxes down is to...

Had Sun Tzu been a 21st century lawyer rather than an ancient Chinese military strategist, he would have applauded the claims system used in Texas probates.  It is designed to build an almost impenetrable defense for the probate estate assets against a primary aggressor: creditors.  In Sun Tzu’s own words “The supreme art of war is to subdue the enemy without fighting.” By gosh, the Texas Estates Code makes sure...

Beware your financial institution. It can be the downfall of your estate plan. You and your financial institution have a contract. The terms of that contract can be found in your bank account signature card, beneficiary agreement or similar account agreement. You signed it when you opened your account. Financial Institution Restrictions Financial institutions can, through their contracts, impose restrictions on how you style your accounts and name beneficiaries. Those restrictions often...

A trust is simply a contract between a “trustee,” who manages the trust, and a “grantor,” who establishes the trust. It is set up for the benefit of the “beneficiaries.” The trust document sets out the terms.  A trust is often considered the foundation of estate planning. While a trust is frequently characterized as a method to avoid probate, it has many other uses. For example, it can be used...

Trusts can pop up in the darndest places. Take wills, for example. In one case, Sam, a lawyer, drafted a will for his long-time friend and client, Nancy, that stated she was leaving all her property to him “to be distributed in accordance with the specific instructions I have provided him.” The will did not contain the specific instructions. Nancy died, leaving no husband and no children. Her will was probated and...

If you have never served as an executor of a will, then you probably have no idea what your official duties are in the first moments and days following the person’s death.   Executor’s Role Directly After a Death There is a legal answer to that question – you have none. That is because you are not yet the executor.  An executor is a court-created role. You are not an executor until...