Estate Planning

Stop Inheritance Feuds Before They Start

Posted by on Apr 25, 2014 in Estate Planning, Uncategorized | 0 comments

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“THE LEGAL CORNER”

By Sam A. Moak

STOP INHERITANCE FEUDS BEFORE THEY START

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.

Family members routinely fight over cash, stocks and other large assets after a relative dies. But some of the most bitter fights are over trinkets. More than half of lawsuits over inheritances involve items worth less than 10 percent of a person’s estate, according to an article on dailyfinance.com. That’s because they have emotional not financial value. One family fought over their mother’s passport, even though it had no financial worth.

 To avoid such fights, conversations should be started early. Either the older or the younger generation may initiate this talk, but the idea is to get an idea of who wants what. To assist in this you should make an inventory of your possessions to discuss with your attorney. Share the list with family members.

 It is also a good idea to have your property appraised. You can use the local appraisal district’s valuation for real estate, but understand it may not be accurate. Personal property items, other than automobiles, may be difficult to assign values to, so seek help. If there is a great disparity in value of items, then you might consider selling them. Cash is always easier to divide among heirs.

You know your family better than anyone else. If you know they do not see eye to eye, do not rely on them being able to work together to divide assets. You will have to divide them or give your executor the ability to do so. However, please make every effort not to burden your executor with refereeing family disputes.

You might consider including a list of personal property in your Will. However, be aware your Will becomes a public record and the whole world will be able to see the list. Talk to your attorney about alternatives to listing items in your Will.

The best way to avoid a fight or conflict is through careful planning, done way ahead of time. Do not put off until tomorrow what needs to be done today. Seek the guidance and advice of an attorney who handles estate planning. There is a good chance he or she will have experience with “sticky” matters and how to best avoid them.

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.

www.moakandmoak.com

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What are Nonprobate Assets?

Posted by on Apr 11, 2014 in Estate Planning | 0 comments

“THE LEGAL CORNER”

By Sam A. Moak

WHAT ARE NONPROBATE ASSETS

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.

 One of the more common complaints about attorneys is their use of too much legalese. Unfortunately legalese is all too common in real estate and estate planning practice. This week I will try and clarify one of these areas.

Probate is the legal process of administering a deceased person’s Will or the estate of a person who dies without a Will. Remember, just because someone dies with a Will does not automatically mean they must go through the probate process. This depends on what type of property they owned at their death and how well their Will was drafted. If someone passed away and left a Will, be sure to check with an attorney skilled in this area to determine if there is a need to probate the Will.

Only property owned by the decedent at death can be disposed of by a Will. A Will cannot dispose of “nonprobate assets.” What are nonprobate assets ? They are assets which pass at death other than by Will or intestacy. The principal types of nonprobate assets include property passing by contract, property passing by survivorship, and property held in trust.

 Property passing by contract includes life insurance proceeds, IRAs and employee benefit plan proceeds, such as the proceeds payable under a pension, profit-sharing, or employee retirement plan. These assets pass outside the Will to the persons named by the decedent in the appropriate beneficiary designations. Thus, it is important to periodically review the beneficiary designations with respect to these types of assets and to update them as necessary.

 Property held by the decedent and another person as joint tenants with right of survivorship passes outside the Will directly to the survivor. Survivorship assets typically include certain types of bank accounts, certificates of deposit, stocks and bonds, and certain savings bonds issued by the United States Government, such as Series EE savings bonds. If these are not addressed when you prepare your Will, then all your careful estate planning could be for naught.

 Another category of property that passes outside of probate is property held in trust for the benefit of the decedent. The trust may have been created by the decedent during his or her lifetime for property management purposes or by someone else, such as a parent of the decedent. Trust assets pass under the terms of the trust rather than under the terms of the decedent’s Will.

 It is important to determine the extent of one’s nonprobate assets when planning the disposition of one’s property at death. If a substantial portion of the assets are nonprobate assets that do not pass under the Will, even a well-drafted Will may be insufficient to carry out the testator’s intent in disposing of his or her property. If you intend for life insurance proceeds, IRAs and employee benefit plan proceeds or bank accounts, certificates of deposit, stocks and bonds, and certain savings bonds to pass under your Will, these beneficiary and joint tenancy designations should be carefully examined. Therefore, be sure to provide your attorney with information regarding all of your possessions so that he may be sure to address them when discussing your Will.

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.

www.moakandmoak.com

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HOW TO AVOID A CONTESTED PROBATE

Posted by on Feb 21, 2014 in Elder Care Law, Estate Planning | 0 comments

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“THE LEGAL CORNER”

By Sam A. Moak

How to Avoid a Contested Probate

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.

I, like many elder law attorneys, spend a large part of my practice engaged in preventive law. Preventive law is a law practice that seeks to anticipate and prevent legal problems and litigation. It is an approach found in several other areas of law besides elder law and estate planning. Many of us who practice elder law already use counseling techniques and many of the documents we prepare with the goal of avoiding litigation (such as an expensive trip to probate court or other legal or financial harm that might have been avoided with appropriate planning).

The conduct of an attorney would of course vary with the situation and depend on the unique circumstances of the case or conflict. With that said, there are some behaviors that would distinguish the peacemaking mindset, and which would be designed to obtain win-win outcomes. These include a willingness to (1) agree to stipulations as to facts and the admission of evidence along with other requests to hasten the proceeding; (2) accommodate requests from opposing party or counsel for schedule changes due to illness, family, or work responsibilities; and (3) avoid the “gotcha” strategy when a mistake is made by an opposing party or counsel; and (4) abstain from negative personal or otherwise disparaging comments. This list is not meant to be exclusive or exhaustive – the bottom line for all these “indicia” of the avoiding conflict mindset is that the attorney acting as a peacemaker is an erstwhile advocate for family or intergenerational healing and that this restorative approach can be consistent with the interests of the client.

 When elder law attorneys act as probate peacemakers or as elder/probate mediators, they bring their substantive knowledge of and familiarity with these preventive steps and techniques. This combination of substantive experience and the preventive approach to a problem or set of problems combine in a way that can help predict how a client and members of a family or another interested group might behave in the future. That can mean that an attorney serving as a peacemaker or as counsel to a disputing party can help ensure that the client has the benefit of strategic advice before future problems or troubles appear on the horizon. To the extent that a dispute is not definitively resolved by some process, or if related issues crop up, a peacemaker can be enlisted to draft an agreement that can guide the parties toward productive management of anticipated future disputes.

 If it is your desire that your final wishes be carried out without conflict or litigation, then you should seek the assistance of an attorney experienced in Probate, Estate Planning and Elder Law matters. He or she can guide you with regard to decisions and language that will make the transfer of your assets a peaceful experience instead of a stressful one.

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.

www.moakandmoak.com

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Learning From Celebrity Mistakes

Posted by on Feb 14, 2014 in Estate Planning | 0 comments

“THE LEGAL CORNER”

By Sam A. Moak 

Learning From Celebrity Mistakes

 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.

 Normally, I would never tell anyone to look to a celebrity for guidance. However, in this instance perhaps we can learn from their mistakes. What do Princess Di, Marlon Brando, Heath Ledger, Jimi Hendrix and former Supreme Court Justice Warren Burger have in common? They all flubbed their estate planning, costing intended heirs money and/or grief.

 The mistakes these folks made run the gamut. Jimi Hendrix died without a Will, leaving his close brother Leon with nothing. Supreme Court Chief Justice Warren Burger wrote his own Will, which at 176 words left out basic tax clauses that could have saved $450,000.00 in estate taxes. Princess Di relied on a “letter of wishes” to give away belongings, and her godchildren got shortchanged.

 However, take Paul Walker, star of the Fast & Furious movies. Paul Walker’s Will was signed in August of 2001, when he was only 28 years old. This is the same year his first Fast & Furious movie was released. Walker is to be commended for preparing a Will and Trust at a young age, before he was a well known movie star. Far too many adults in this country wait until “someday” to prepare even a basic Will. No one should ever procrastinate with estate planning! Walker certainly didn’t plan to die in a car accident.

A Will is not a static instrument. To serve its purposes, it must keep current with life changes, including an individual’s financial circumstances, and with some external factors, such as tax laws. With the help of a professional, you should periodically review your Will, staying alert to new or different circumstances that might call for updates.

 While Walker gets kudos for planning ahead, he loses points for failing to update his estate planning documents before he died. His death was more than twelve years after he signed his Will. There are too many changes in life over the course of twelve years, especially when Walker’s net worth grew so much during that time, to rely on the same old documents. Perhaps Walker would not have wanted his young daughter to inherit his total wealth. Perhaps he would have wanted his girlfriend of 7 years, Jasmine Pilchard Gosnell, or his parents to have a portion of his large estate; or, perhaps there were charities he would have benefitted. What if Walker’s parents were not physically able to act as executor or guardian? These are all reasons to revisit and update estate planning documents.

 Letter of Instruction

Even the best-drafted Will is not likely to cover everything needed for a smooth disposition of your estate. To supplement the Will, consider executing a letter of instruction. It generally is not legally binding, but it can go a long way to expedite the process and provide information not to be found in the Will.

Some items appropriate for a letter of instruction include a list of bank, brokerage, and mutual fund accounts; directions on where to find important documents or personal property; user names, PIN numbers, and passwords necessary for access to electronic records; and contact information for legal and financial advisors. Be sure to list any life insurance policies, as beneficiaries will collect on those policies outside of the Will. Any advance plans for the funeral and burial also should be mentioned in the letter of instruction.

 Hiring an attorney to write your Will can help you ensure that the technical formalities of Texas law are followed and that your gifts are clear and easily understood. Spending a few dollars now will save your family and loved ones from spending more later. Not to mention the confusion and grief that will be avoided.

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.

www.moakandmoak.com

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Pets ARE Family

Posted by on Nov 8, 2013 in Estate Planning | 0 comments

“THE LEGAL CORNER”

By Sam A. Moak

Pets ARE Family

The information in this column is not intended as legal advice but to provide a general understanding of the law.  Some of the information in this column was provided by the Humane Society of the United States.  Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

Many of you have probably read or heard about Leona Helmsley creating a $12 million dollar trust for her pet dog.  Well, right here in Huntsville, I have helped many who want to make special provisions for their pet family.  A few years ago I did some research and found the Humane Society has some very good information in this area.

Pet trusts have become increasingly popular in recent years as older pet owners are looking for ways to ensure their pets will be well cared for when they’re no longer able to do the caring.  Therefore, this week’s column deals with things you should know when considering your pets in estate planning.

Most wills deal with providing for loved ones upon the death of the person writing the will.  However, “loved ones” usually is limited to spouses, children and other relatives.  If your house is like mine, your family also includes your pets.  We talk to them like family, feed them and care for them like family, and, when a pet dies, we grieve for them like family.  However, when planning for the future we often overlook our furry friends.

 Should an unexpected illness, accident or death occur, it is a good idea to have in mind a family friend or neighbor who is familiar with your pet that can act as an emergency caretaker.  Carrying an “alert card” in your wallet that lists the names and phone numbers of your emergency pet caretakers would be a good idea, also.  Post removable “in case of emergency” signs on your doors or windows telling how many and what type of pets you have.  These notices will alert emergency response personnel during a fire or other home emergency.

 The best way to make sure your wishes are fulfilled is to make formal arrangements that specifically cover the care of your pet.  It is not enough that long ago a friend verbally promised to take care of your pet.

 A Will takes effect only upon death, and may not be probated and formally recognized by a court for days or even weeks.  This does not mean you should not include a provision in your Will for you pet.  It just means you should explore creating additional documents that compensate for the Will’s limitations.

 Unlike a Will, a trust can provide for your pet immediately and can apply not only if you die, but also if you become ill or incapacitated.  When you create a trust for your pet, you set aside money to be used for its care and you specify a trustee to control the funds.  However, trusts can be expensive and complicated.

 A power of attorney may be more suited to your situation.  Powers of attorney authorize someone else to conduct some or all of your affairs for you while you are alive.  Powers of attorney have become standard planning devices.  Such documents can be written to take effect after you become incapacitated.  They are simpler than trusts and do not create a legal entity that needs to be maintained by formal means.  Provisions can be inserted in powers of attorney authorizing your attorney-in-fact (i.e., the person designated to handle your affairs) to take care of your pets, expend money to do so, and even to place your pets with permanent caretakers if necessary.

 I will not mention any names, but I have been asked in the past if a person could request a pet be euthanized after their death.   A similar clause would prevent the remarriage of the surviving spouse.  Thank goodness these of type provisions would probably be ruled invalid.

 I would also suggest you consider The Stevenson Companion Animal Life-Care Center at Texas A & M University.  Established in 1993, the Center provides a way your beloved pets can be cared for when you are no longer able.  You may find more about the Center at  http://vetmed.tamu.edu/stevenson-center.

 While there is a plethora of information on the internet in this area, I caution you to be careful.  What you find on the internet may not be valid under Texas law.  Therefore, before making formal arrangements to provide for the long-term care of your pet, seek help from an attorney licensed to practice law in Texas, who can guide you in preparing the legal documents necessary to protect your interests and those of your pet.

 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.

www.moakandmoak.com

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An Executor’s Role

Posted by on Oct 25, 2013 in Articles, Estate Planning | 0 comments

last-will-testament

“THE LEGAL CORNER”

By Sam A. Moak

AN EXECUTOR’S ROLE

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.

One of the main components of a Will is the portion where the person making the Will (the Testator) names the Executor.  Who and what is an Executor and what are some of the considerations you should take when selecting one is the topic this week.

The Executor is the person who carries out the instructions in your Will and who pays the estate’s debts and taxes.  Now I do not mean the Executor pays these out of his or her pocket, but instead makes sure these items are paid with the proceeds of the estate.  Because the Executor will have broad responsibilities and powers it is important to choose a competent and trustworthy Executor.

 An Executor can be any person or institution (such as a bank or trust company) you choose.  Here are some tips on what you should consider when choosing an Executor:

  •  Are they experienced and competent in business matters?
  • Are they familiar with your business, finances and property?
  • Are they willing and able to act as your Executor?
  • Are they able to spend the time necessary to perform the duties of an Executor?
  •  Are they able to work with the estate’s attorney and accountant?
  • Are they able to provide for the continuation of your business?

Another important item to consider when selecting an Executor is what would occur if they are unable to act as Executor when the need arises?  It is best to have an alternate Executor and, if possible, a third.  The reason for this is simple.  If you do not select an alternate, then it is up to the court to do so.  The person the court selects may not be someone you would want.

 The Executor’s responsibilities include the following:

  • The first step is the probate of the Will.  In order to do that, an application must be filed with the Probate Court located in the jurisdiction in which the decedent was domiciled at the time of his or her death;
  • Following the probate hearing, the County Clerk will issue Letters Testamentary to the individual or institution designated in the Will as the Executor (after the Executor has signed an Oath of Office);
  • Giving a general notice to unsecured creditors within 30 days of his or her appointment;
  • Within 60 days of the Executor’s appointment, giving notice by certified or registered mail to each secured creditor whose debt is secured by a lien on Texas real property or personal property owned by the estate
  • Collecting the following documents to establish rights for insurance, pensions, Social Security, and ownership: Will, birth and marriage certificates, Social Security number, citizenship papers, insurance policies (life, health, accident, and property), bank books and statements, deeds, leases, care title/registration, income tax returns, veterans discharge certificates, disability claims, unpaid bills, property tax bills, and credit card information;
  • Notify the post office, relatives, friends, employer, insurance agents (life, health, and accident), religious, fraternal, civic, and veterans organizations, and unions of your death;
  • Collecting, preserving, and appraising the personal property of the estate;
  • Securing the residence and reviewing the insurance coverage.
  • Preparing an Inventory, Appraisement and List of Claim’s for your estate.  The Inventory, Appraisement, and List of Claims must list all the decedent’s probate assets and all claims that are owed by third persons to the estate.  (Note that the term “claims” in this context refers not to the decedent’s debts or claims the decedent owes to others, but only to amounts that other people owe to the decedent.)
  • Paying all valid debts including funeral costs, fees and expenses incurred in administration, medical bills, and utilities from your estate account;
  • Applying for Social Security benefits and employer identification number;
  • Determine whether your estate has any tax liability and making sure your final tax return is filed;
  • Distributing the money and property in accordance with the Will.

As you can see, the Executor plays a very important role in the administration of the Testator’s estate.  Usually the attorney handling the probate will assist the Executor with the above duties, but it still requires someone who is familiar with your affairs so that all of the above information can be collected and addressed.

While you can elect to pay the Executor compensation for their time and effort, this is not always the case.  Thus, make sure you have talked over your decision with the person you select to make sure they are up to the task.  And as always, consult with an attorney when making this choice.

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.

www.moakandmoak.com

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