Estate Planning

Love and Affection: As Seen Through the Eyes of Justice

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...

Community Property Survivorship Agreements: This Tool Deserves Another Look

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...

Being Escheated Out of Your Inheritance – Abandoned Property Laws

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,...

The Millennial Reality Check

Millennials and Gen X, listen up. Estate planning is not merely for the elderly.  Covid has taught us that, if nothing else. Consider that one-fourth of the 800,000 Covid deaths have been people younger than 65. Many more young adults have had Covid, survived, and are now dealing with the long-term effects. There were 8.7 million diagnosed cases for adults aged 18 to 29, and over 12 million for adults aged...

The Smaldino Case: Tax Court Opinion Leads to Estate Planning Angst

Just in time for Christmas, the tax court has handed down an opinion that gives us abject lessons in gifting, blended families, entity formalities, trusts and estate planning.  That should be a tip-off that the taxpayer did not fare well.  The Smaldino Case The case involved gift taxes, specifically on a gift of LLC interests to a dynasty trust. The interests were first funneled from the husband’s trust to his wife, who...

Acting By the Rules Crucial for Agents

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...

Intentional Gifting – Making Your Life Count

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...

Moving to Texas? Estate Planning Update is a Must

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...

Homestead Property Tax Exemptions

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...

Deadlines Loom for the Recently Widowed

Dear New Widow(er): Your friends here at the federal government join me in sending condolences for your loss. We want you to know we are here for you.  To help get things started, we have structured a few special tax deadlines that you really do not want to miss. No wasted time grieving here! One deadline that may seem a bit silly, given that the estate tax exemption of $11.7 million, is...

The Art of the Claim: Arduous Probate Process Unfriendly for Creditors

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...

How Financial Institutions Can Sabotage Your Estate Plan

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...
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