TECHNOLOGY AND OUR “SEASONED” LOVED ONES
“THE LEGAL CORNER”
By Sam A. Moak
Technology and our “Seasoned” Loved Ones
The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.
There is a common complaint among Baby Boomers when it comes to aging parents and grandparents: It’s hard to keep in touch with them. Most communication among the middle and younger generations now takes place on the computer—e-mail, Facebook, electronic photo-sharing and more. Very rarely do we pick up the phone for a good old-fashioned chat; and, when we do, it’s usually on the go, in the form of a quick call or text message from our cell phones. Unfortunately, where all this technology helps us to be more connected to friends and family who also use these technologies, it may end up leaving our “seasoned” loved ones out of the conversation.
We do not have to leave our non-technological loved ones out. The key to getting these relatives involved in high-tech communication is to look at it from their point of view. For technology to become attractive to grandma and grandpa, we have to get into their heads and understand what would make them think this is fun. The bells and whistles that might attract us are often too counterintuitive for them.
The younger, tech-savvy generations tend to look for high-tech devices that do everything, but that’s not necessarily what’s going to be appealing to grandma or grandpa. Perhaps a single purpose gadget, designed solely for email or sharing photos, would be more appealing to them.
New high-tech devices may be harder for parents or grandparents to use and honestly they can be for me too. However, being able to connect with their loved ones can be a huge motivating factor. Being able to communicate with family makes our elderly parents and grandparents happy, but it also helps keep them safe. Adult children who communicate with their parents on a regular basis are better able to recognize and respond when mom or dad suddenly have trouble caring for themselves.
Many of you may not be fortunate enough to live close to your parents or grandparents and technology can provide a way to keep tabs on them. Technologies exist that allow for the movements of our loved ones to be monitored by sensors and relayed by computer if help is necessary. Studies conducted by the AARP Foundation and the Center for Aging Services Technologies (CAST) of the American Association of Homes and Services for the Aging both show a willingness of seniors to use these technological types of equipment if it allows them to stay in their home. I guess instead of Big Brother Watching it is Son or Daughter.
While these monitoring systems in varying configurations have been used in long-term care and assisted-living communities, their move into private residences is more recent. Some home health agencies are offering them as part of their service.
These new systems go way beyond the simple push-button “I’ve Fallen and I Can’t Get Up” alerts to monitor movements, change in behaviors, and even health status such as blood pressure and weight. Systems vary in cost, monthly fees, and technical assistance. Some you rent, others you buy outright. If you are in an apartment or considering a move in the near future, portability may be an issue to consider as well.
Daily interaction with others, particularly family, and a non-intrusive daily check on your loved one’s well being can greatly increase their quality of life. So, technology can be a great benefit to you and your loved ones, if embraced properly.
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.
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ESTATE PLANNING WITH BUSINESS ENTITIES
“THE LEGAL CORNER”
By Sam A. Moak
Estate Planning with Business Entities
The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstance.
When people think of estate planning, the first ideas that typically come to mind are of wills, trusts, powers of attorney, and guardianship arrangements. Traditionally, those instruments have been closely associated with estate planning simply because they are legal tools exclusively dedicated to helping people pass on their assets or otherwise ensure that loved ones are cared for.
While the traditional tools work very well at accomplishing their designated tasks, you might be surprised to learn that they are not the only tools available for estate planning. Depending on your particular assets and desires, then the use of a limited partnership, limited liability company, corporation may be right for the situation.
All of the business entities mentioned above are common when a business is owned by different individuals. While the primary purpose for forming one of these business entities is for liability protection, they also provide for a means to manage the business and eventually shift ownership.
Limited partnerships have general and limited partners, the general partner(s) are responsible for management and decision making. The limited partners are investors or owners with no management or decision making authority.
Limited liability companies and corporations have either membership holders or shareholders. Typically the membership/shareholder(s) elect the officers who are responsible for management or decision making. Thus, the membership/shareholder(s) with the greater number of membership interests or shares control.
The interests in all of these forms of business entities are something that can be transferred over time, therefore making a perfect vehicle for parents or grandparents to maintain control over assets owned by the business entity until they pass away or are ready to shift the majority of the ownership over to the next generation for control. An additional benefit is that the family also has liability protection. So, using a family owned ranch/farm for example, if one family member is sued or found liable in some accident, then the assets of the other family members in ranching/farming business with them are not susceptible to being taken. Another benefit is that incidents such as incapacity, death or divorce, can be addressed in the governing documents. This means that should one of these events occur, there is a plan for how the property owned by the business entity is transferred.
If you are thinking of working on your estate plan, then perhaps one of these business entities is right for you. Or maybe you are a candidate for a more traditional plan. In either case, you should sit down with an attorney familiar with traditional plans and business entities to find out what estate plan is best for your needs.
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.
DO I HAVE TO PROBATE THIS WILL?
“THE LEGAL CORNER”
By Sam A. Moak
Do I have to Probate this Will?
The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.
A common question I am asked is what is probate and do I need to probate this Will? Estate administration is the management and settlement of a deceased person’s estate by a personal representative approved by the court. Estate administration does not require a Will. Probate is the formal process of administering a person’s estate when they had a Will. Probate may not be necessary when the decedent’s estate is so small that no action is necessary to distribute the property to the beneficiaries or heirs.
However, probate is required in most other circumstances. In fact in a recent case the court ruled a Will not admitted to probate is not effective for the purpose of proving title to real estate. Ratcliff vs. Polk County Title, Inc., No. 09-04-124-CV, 2004 WL 1925447 (Tex. App.-Beaumont. Aug.31,2004, pet.denied). In this case a title company was sued for defamation after the title company issued a title report (i.e., Commitment) that included a statement that Mrs. Ratcliff, a deceased owner of real property, died intestate. Mr. Elijah Ratcliff, Mrs. Ratcliff’s son and named executor in Mrs. Ratcliff’s Will, sued the title company on the grounds that Mrs. Ratcliff did, in fact, have a Will and, therefore, the title report was defamatory. The District Court rejected Mr. Ratcliff’s theory. The Appellate Court affirmed the District Court’s ruling and pointed out that although Mr. Ratcliff had previously filed an application to probate Mrs. Ratcliff’s Will, the Will was never presented for action in the Court. Citing Texas Probate Code Section 94, the Appellate Court ruled that until a Will has been admitted to probate, it is not effective for the purpose of proving title to real property; thus, in that context, the title report was not defamatory.
In Texas, there are several different methods of administering an estate, some of the more common are Independent Administration, Probating the Will as a Muniment of Title, filing a Small Estate Affidavit, and filing an Informal Family Settlement.
If the decedent owned real property at their death, then something must be done to properly transfer the property. Usually this is not discovered until the family of the decedent decides to use, sell, or partition the property. It could also arise if there is a dispute as to payment of expenses or taxes on the property. Without a Will this process can be complicated, involve contacting many heirs, and take a great deal of time.
Please note there are limitations as to which form of probate may be used depending on the situation. Therefore, check with your attorney to decide which method of estate administration is right in your particular circumstance. It could save you time and money.
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.
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All Estate Plans Are Not Necessarily Equal
“THE LEGAL CORNER”
By Sam A. Moak
All Estate Plans are not Necessarily Equal
The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstance.
We’re all about equality, but the fact is that women have different estate planning needs than men. Whether they’re single or married, have children or no children, women have different things to think about when it comes to estate planning. This means that women need to be involved in the planning process: express their own wishes, voice their own concerns, and ask their own questions. Here are three of the ways that women are different from men—and how it affects their estate planning.
Women live longer than men.
Among the senior citizen population (65 and older) more than three times as many women as men are widowed. This longer life expectancy means two things; first of all it means that women are the ones who will likely have to deal with taxes. When a married person dies their assets can transfer to their spouse tax free. This doesn’t avoid taxes. It merely delays them, and the surviving spouse (the woman) will have to be the one to minimize the tax burden on the children. Second of all, women have to worry more about their retirement savings lasting them to the end. Estate planning is partially about distribution of your remaining assets when you die—it takes careful planning to ensure that you’ll have remaining assets after a long and active life.
Women are the caregivers.
This includes taking care of young children and elderly parents. Statistically, women are the ones who will initiate the estate planning process—mainly because they are concerned about the guardianship of young children. Women are also the ones who will eventually have most need of a caregiver agreement or help navigating the Medicaid application process when they’re caring for their older relatives.
Women need to be most concerned about loss of primary income.
Because men are still generally the primary breadwinners in a family, women are the ones most often left out in the cold when their spouse passes away and they lose that income stream. Women need not only to make sure they and their partner both have adequate insurance policies, they need to plan to keep those insurance proceeds and to avoid heavy taxes upon death.
It’s easy to see, when creating an estate plan, how important it is to protect and pass on your assets, but a good estate planner knows that a Will or a trust is not all about assets. In fact, for all of the technical and financial language you may find in your Will or trust, the most important part of the document is if—and how—it reflects your values.
You may think that values are something you’re more likely to discuss with your spiritual advisor than your estate planner, but we know you’ve worked hard to give your children and grandchildren a foundation of knowledge and belief to serve them when you’re not there. We want to help you create a thoughtful and comprehensive estate plan to help you continue doing just that.
There are a few ways in which you can use your estate plan to pass on your values:
You can impress upon your children or grandchildren the importance of education by leaving an inheritance to them in an educational trust.
Help your children or grandchildren learn to follow their dreams by earmarking part of the trust principal to be distributed should they want to start their own business.
Pass on your belief in the value of family by creating a special trust to support stay-at-home parents.
Teach fiscal responsibility by choosing to have distributions made gradually, helping your beneficiaries learn how to handle their finances responsibly and with maturity.
With the help of a caring and attentive attorney, you can leave a deeper legacy than mere money; you can impart your closely held values for generations to come.
All of these things can be discussed and planned for with your estate planning attorney—and it doesn’t take away from your spouse or children. In fact, having your own plan in order actually helps the important people in your life. So don’t wait any longer, plan to protect yourself today and in the future.
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.
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ORGANIZE YOUR ESTATE PLANNING DOCUMENTS
“THE LEGAL CORNER”
By Sam A. Moak
ORGANIZE YOUR ESTATE PLANNING DOCUMENTS
The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstance.
I am commonly asked, “how long will the probate process take?” My patent response is, “that depends a great deal on how organized your loved one was.” If, like so many, you are prone to disorder in the keeping of important documents, assuming that you keep them at all, you may be well past due for a makeover of your estate plan and your end-of-life instructions. It is not just a matter of maintaining tidiness for its own sake; a lot of money and time could be saved by making your estate plan organized and accessible and then keeping it that way.
Yes, it is easier said than done, but consider a quick fact if you doubt the importance of this undertaking: According to some sources that study such things, state treasurers now hold over $32 billion (not million) dollars in unclaimed bank accounts and other such assets. Could your heirs find all of your assets?
Then there is the prevalent problem of some large insurance companies failing to pay out unclaimed life insurance policies to beneficiaries, claiming that under the insurance contracts they are obligated to do so only when the beneficiaries come forward. When the beneficiaries are not even aware of the existence of the policies, obviously they do not come forward, and years of premiums may have been paid for nothing.
The take-away lesson is that it is just as important to keep estate planning documents well organized and in a safe place, known to and accessible by your heirs, as it is to properly execute the documents in the first place. Any virtue can become a vice if taken to extremes, so this does not mean holding on to every scrap of paper that could conceivably be of interest to those you leave behind. Nonetheless, to possibly save your heirs a significant amount of money, time, and stress, at least the essential documents should be kept together, such as in a safe-deposit box, and/or at home in a fireproof safe that someone can access when the time comes. Instructions on how to dispose of your estate will not mean much if you have not left instructions on how to find the controlling documents.
Essential Documents to Organize:
So what are these essential documents that you should have well organized and accessible? Individual circumstances vary, but the first document for most people is an original Will. Dying without a Will means leaving the determination up to the state as to how your assets will be distributed, and if there is some writing, but not an original document, probate proceedings could become needlessly contentious and drawn out.
In addition to a Will (and any trust documents), what follows is a nonexhaustive, but reasonably comprehensive, list of other important documents, the existence and location of which should be known to your heirs:
Marriage license—A surviving spouse is likely to need it to prove that he or she was married to the deceased before being able to claim anything based on the marriage;
Divorce papers;
Durable health-care power of attorney (for health-care decisions if you are incapacitated), a Directive to Physicians, any do-not-resuscitate order, and an authorization to release health-care information;
Durable financial power of attorney (for financial decisions if you are incapacitated);
Documentation of ownership of property, including housing, land, cemetery plots, vehicles, stocks, bonds, etc.;
Proof of loans made and debts owed;
List of bank and brokerage accounts, with account numbers, and any safe-deposit boxes with the location of corresponding keys;
Tax returns for the most recent three years;
Life insurance policies and 401(k), pension, annuity, and IRA documents; and,
List of user names and passwords for Internet accounts.
With a little bit of foresight and planning, you can greatly reduce the administrative burden on your family and heirs after you pass, not to mention saving them time from having to discover and understand your affairs.
If you have a question regarding Elder Law, Estate Planning, Living Trusts or Probate in the Huntsville area, please contact us at 936-295-6394 or visit our website. Call today and we will connect you with an experienced Elder Law and Probate Attorney. We can schedule you a face to face appointment to discuss your circumstances. If you have questions or are considering any aspect of your estate plan, probate, your health care directives, etc. we can help! Call us now at 936-295-6394 . We look forward to hearing from you and assisting you with any and all elder law and estate planning needs
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.
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Having “That” talk with your Parents…About Estate Planning
“THE LEGAL CORNER”
By Sam A. Moak
The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstance.
Talking to parents can be very difficult. In fact, it can be more difficult to have a deep conversation if you’re really close to your parents, because frequent communication and closeness means that important subjects often get placed on the back burner. Personal experience has taught me that none of us knows what will happen tomorrow. Before something happens to you or your parents, make it a point to discuss their estate plans.
A few months ago the New York Times ran an article about an attorney in Seattle who had never even thought about forming an estate plan until the issue was forced upon him by life circumstances. At that point, the decision to formulate a plan involved a great deal of input from the attorney’s daughter—a woman who would certainly be influenced by the plan. The moral of the story is that it’s incredibly easy to fail to plan . . . even for attorneys who are trained and understand the importance of establishing a comprehensive plan.
How can insurance companies get away without paying the proceeds of life insurance policies? The answer is simply that many beneficiaries don’t know they are named as beneficiaries and, therefore, don’t demand payment from the insurance companies. Many, many times I have been asked to help clients locate insurance companies listed in old policies they have found in their parents’ home. This is one reason why you need to know (i) if your parents have an estate plan, and (ii) what that plan looks like. Your parents worked hard to pay premiums and create real wealth. It would be a shame for that wealth to go somewhere other than where your parents intend it.
A sad but true fact is that more than $32 billion of unclaimed property is currently held by state treasurers. The property consists largely of cash held in bank accounts, and sooner or later, it’s likely that the cash will end up belonging to the state. You don’t want that to happen to your property, nor do your parents.
Estate planning attorneys often talk about the importance of Wills and trusts. While those documents are critical, what is often overlooked, however, is a discussion of how your parents would want to be cared for in the event of a major debilitating illness. Without the properly drawn legal documents, you may not be able to assist your parents in this time of need.
There can be serious pitfalls and tax implications to adding a child’s name to a bank account or deeding them property while you are still living. A well written power of attorney can avoid these pitfalls. Additionally, all documents are not created equal and finding out the document you are relying on is difficult to use or out dated at a time when your parents need you most just adds to the stressful situation.
Your parents worked hard to acquire their assets, and they should be made aware of the consequences of failing to plan adequately. It’s not a matter of selfishness on your part to mention estate planning to them. However, you should understand it is their choice. I often tell clients, “It’s your property, if you want to take it all out back and burn it, that is your choice.” The point is it is your parents’ decision. You can not make their plans for them.
Making estate planning decisions is not something that should be done from a sick bed. You can encourage your parents to plan sooner rather than later and to let you know your role in that plan.
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.
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