Some of the gifts were easier to classify than others. The court found, for example, that a 1993 Buick had been given by the father only to Gina, and not for the use of both husband and wife. Four different gifts of $10,000 each from the father, made to qualify for the annual gift tax exemption, had clearly been made to one or the other of the parties, making it easy for the court to put each such gift in Gina’s or Edward’s column. When considering that Gina’s father had paid off a credit card debt of $12,500, the court treated the payoff as a gift to both parties because Gina and Edward had both purchased items with the credit card, so that payment of the debt benefited both of them.

As to one gift from Gina’s father, you could say that one critical word (or contraction) made the court regard the gift as having been made to both parties. Gina’s father had given $15,000 towards bricking the jointly owned house and garage. This obviously enhanced the value of the marital home and benefited both Gina and Edward. More than that, there was evidence that when Gina’s father made that particular gift, he had said it was for “ya’ll.” Some outside the South think that “ya’ll” is used below the Mason-Dixon line to refer to one person or more than one. In this instance, though, as in most cases, “ya’ll” was a plural pronoun referring to both Gina and Edward, thus supporting a ruling that the gift had been to them both.

My point in this week’s column is that when dealing with real property or gifts through an estate, it should be done in writing with the help of a professional.  In this case, had an attorney to document the gift in writing, then the father’s intent would have been clear.

When drafting legal documents, you should hire an attorney.  The assistance they provide you will make the matter much easier and clarify the details properly.  In today’s world of chat gbt and AI, there are way too many options to choose from.  If you want certainty that your document properly transfers the property in accordance with your wishes, then an attorney familiar with your jurisdictions laws, customs and requirements is invaluable.

The post “Y’all” Means Marital Property appeared first on Moak & Moak, P.C. -Attorneys At Law.

Not only do I write Wills, I also see a lot of homemade Wills.  All Wills are not the same and while there are some similarities, each situation requires thought and detail in the way their affairs are handled.  Homemade or Will forms can cause many issues, so I thought I would present you with a “homemade” Will that I was asked to probate.  The names have been changed to protect the individuals involved.  The following is a rendition of the Will:

            “I am writing of my will mineself that dam lawyir want he should have too much money, he ask too many answers about the family.  First thing I want I don’t want mine brother Oscar get a G    D     thing I got.  He is a mumser he done me out of forty dollars fourteen years since.

            I want it that mine sister hilda get the North Sixtie Akers of at where I am homing it now, I bet she don’t get that gonoph husband of hers to brake twenty akers next plowing.  She can’t have it if she lets Oscar live on it, I want I should have it back if she does.

            Tell Mamma that six hundret dollars she been looking for ten years is buried from the backhouse behind about ten feet down.  She better let little Frederich do the digging and count it when he come up.

            Pastor Luchnitz can have three hundret dollars if he kisses the book he won’t preach no more dumhead talk about politiks, He should a roof put on the meeting house with and the elders should the bills look at.

            Mamma should the rest get, but I want it so mine brother Adolph should tell here what not she should do so no more slick irishers sell her vakom cleaners.  They noise like hell and a broom don’t cost so much.

            I want it that mine brother Adolph be my execter and I want it that the judge please make Adolph plenty bond put up and watch him like hell.  Adolph is a good bisness man but only a dumkopf would trust him with a busted pfennig.

            I want dam sure that schliemiel Oscar don’t nothing get, tell Adolph he can have a hundret dollars if he proves judge, Oscar don’t nothing get.  That dam sure fix Oscar.

            Signed: Herman Oberweiss”

Probating Mr. Oberweiss’ “will”, unfortunately, was difficult if not impossible because it has several problems.

To be a valid Will in Texas a Will must show testamentary intent.  However, Mr. Oberweiss states in paragraph two of his Will that “if she lets Oscar live on it, I want I should have it back if she does.”  This seems to indicate Mr. Oberweiss would still be alive.

Texas law also requires two witnesses subscribe their names to the Will in the testator’s presence.  Mr. Oberweiss’ Will lacks the signature of any witnesses.

Another problem area for Mr. Oberweiss is his failure to adequately identify his heirs.  Who are “Oscar”, “hilda”, “Mamma”, “Little Frederich” and “Adolph?”  They appear to be family but we do not have their last names and so identifying them is difficult.  For example, while Mr. Oberweiss is familiar with who “Mamma” is, we do not know from the Will.  Several “Mammas” could appear claiming to be the one referred to in the Will.

Mr. Oberweiss would like “Mamma” to get at least six hundred dollars, that she has been trying to find for ten years, however, we do not have an adequate description of where the money really is.  It is apparently buried behind what Mr. Oberweiss calls the “backhouse,” but where is the backhouse ?

Further, it is Mr. Oberweiss’ desire “helda” get the “North Sixtie Akers.” How do we know where the “North Sixtie Akers” is?  Apparently it is where he was “homing” at the time he wrote the Will.  But what does “homing” mean?  Where he lived is a good guess, but we really do not know that is what he meant.  What if Mr. Oberweiss was no longer “homing” the property he refers to when he died?   What then ?

It is clear Mr. Oberweiss belonged to a congregation led by a “pastor.”  While several denominations use this term, Mr. Oberweiss was obviously German and therefore would have probably been Lutheran or, possibly, Roman Catholic.  But would a member of either denomination (or several others who use the term “pastor”) have referred to his church as a “meeting house?”  Neither Lutherans nor Roman Catholics have “elders” at the congregational level.  Presbyterians do, and, on occasion, a Presbyterian minister is addressed as “pastor.”  But “meeting house?”  The term is commonly associated with the Society of Friends, who have no “pastors.”  Even more to the point, however – Mr. Oberweiss had a “pastor” and therefore could hardly have been Jewish.  Yet don’t you wonder why a well to do farmer of German descent, living in East Texas, would use Yiddish words of execration is speaking of Oscar and Hilda’s husband?

I must confess Herman Oberweiss, nor his family, really exist.  He was the creation of Will Sears.  Mr. Sears was an attorney in Houston who created Herman Oberweiss’ Will for a Law School Banquet.  Mr. Sears passed away in December of 1990.  This was one of my father’s favorite articles, so thinking of him this Thanksgiving, I decided to publish it again.

While Herman Oberweiss does not exist, this Will does afford me the opportunity to caution you on the hazards of writing your own Will using a form from the Internet or Do-It-Yourself Will kit.  You may save a few dollars, as did Herman, but in the long run the goal of a Will is to make sure your last wishes are accomplished.  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.  THAT will damn sure fix Oscar.

The post The Danger of Homemade Wills appeared first on Moak & Moak, P.C. -Attorneys At Law.

Probate is the process a person goes through in court when a person dies leaving 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 and with rights 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.

Vehicles, farm equipment, recreational vehicles and guns are another example of assets that could pass outside of probate, if structured properly.

Yet 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.

Many people set up accounts with one of their children.  Thinking this will make it easier for the child to pay bills.  However, this could open the parent up to liabilities the child has.  Another potential problem is they feel the selected child can then gift the account equally to their siblings.  However, there is no legal requirement they do so, and if they do equally divide the account with their siblings, there are possible tax consequences.

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.  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.

The post WHAT ARE NONPROBATE ASSETS? appeared first on Moak & Moak, P.C. -Attorneys At Law.

Most of us have adjusted to balancing children, work and finding some time for ourselves.  But when we add caring for an aging parent(s), it often becomes too much.  And usually it’s the “me” part that is sacrificed…until you hit burn out.

Here are some ways to leverage your time and resources so you can also take care of yourself.

Enlist Your Kids

Even the smallest child can spend charming one-on-one time with a grandparent.  If your parent lives with or near you, they can spend time together in person.  If your parent is not near you, they can Skype on the computer, use FaceTime or play multi-player online games.  Your children, no matter what their ages, will benefit from spending time with Grandma or Grandpa, they will see how you value and care for aging family members—and you will get some extra time to return phone calls, make dinner, or even catch a quick nap!

Ask About Options at Work

Check with your employer’s human resources department about resources that might be available to you. Depending on how long you expect to be caring for your parent, there may be a multitude of options available to you, including elder care research and referral services, flex time, even working from home options.  The Family and Medical Leave Act (FMLA) calls for eligible employees to receive 12 weeks of unpaid job-protected leave. (Private employers with less than 50 employees are exempt.)

Seek Assistance

There are legal and community resources that can help you make the best care and financial decisions for your parent.  A local Elder Care attorney can prepare the necessary legal documents and help you maximize your parent’s income, long-term care insurance and retirement savings, and qualify for VA or Medicaid benefits, if applicable.  He/she will also be familiar with various living communities in the area and in-home care agencies. You can also hire someone to review and verify/dispute insurance claims and medical billing.

Find Your “Me” Time

Stress is your biggest enemy and you have to find ways to reduce it.  Joining a caregiver group, in person or online, will let you share your questions and frustrations, and learn how other caregivers are coping.  Don’t be afraid to ask favors of friends and other relatives, such as picking up your kids while you go to the doctor with your parent.  You could also learn to order in dinner every now and then without feeling guilty. Learn what you need to maintain your stamina, energy and positive outlook. That may include regular exercise (a yoga class, walk or run), a weekly outing with friends, or time to read or simply watch TV.

The post How to Take Care of Yourself as You Take Care of Others appeared first on Moak & Moak, P.C. -Attorneys At Law.

Chances are, even in a small town, that judge won’t know you. They won’t know your children. And they won’t know the values, routines, or love that define your family. They’ll do their best, of course, but that choice could be a complete stranger—or even someone you wouldn’t have wanted anywhere near your kids.

The truth is, no one can replace you. But someone can carry out your wishes and provide stability, love, and guidance to your children. Your job is to choose that person now, while you can.

There’s no one-size-fits-all answer when it comes to choosing a guardian. Every family is unique, and the “right” choice for you may not be obvious at first. That’s why we help parents walk through the decision carefully—thinking not only about who can take care of your kids, but who should.

There are some of the factors worth considering:

– Relationship and Bond: Does your child already know and feel comfortable with this person?

– Parenting Style: Are their values, beliefs, and approach to discipline similar to yours?

– Location: Would your child need to move away from their school, friends, and community?

– Health and Age: Are they physically and emotionally able to care for your child long-term?

– Lifestyle and Availability: Are they raising children of their own? Do they have the time and energy to take this on?

I advise my clients it is best to name at least one backup guardian, in case your first choice becomes unable or unwilling to serve.

Raising a child is expensive, you already know this, but it shouldn’t be your chosen guardian’s burden. Ideally, you’ll leave enough financial support to cover the costs of education, healthcare, housing, and general needs. Life insurance, savings, and trusts are often used to provide for your child’s future.

The person you trust to raise your child may not be the same person you trust to manage their money. And that’s okay.  Many parents choose to name:

– A guardian to care for the child day-to-day, and

– A trustee to manage the financial side of things—paying for the child’s expenses and ensuring that funds are used appropriately.

Of course, some families choose to keep those roles combined for simplicity. But it’s important to weigh the pros and cons. The right setup is the one that gives you peace of mind.

Also, this isn’t a one-and-done decision. Your children will grow, relationships may change, and someone who isn’t the right fit now might become a great option later on.

The key is to make a decision today. Once you’ve named a guardian, it’s easy to update your plan down the road if things shift. But until you have that legal paperwork in place, the risk remains.

You don’t have to figure this out alone, and you don’t have to leave your children’s future up to chance. By creating a legally sound estate plan, you can name a trusted guardian who will care for your children if something happens to you.  You can establish financial provisions to ensure your children are provided for without burdening others, appoint a trustee to manage assets wisely and in line with your wishes, and avoid court battles and confusion during what would already be a difficult time for your family.

An estate planning attorney can make this process straightforward and personalized. They should be able to guide you through each decision, carefully, compassionately, and without overwhelming legal jargon, so you can feel confident knowing your children are protected.

This is one of those steps that most people put off, but wish they had taken care of earlier. Don’t let uncertainty or discomfort stop you. Estate planning gives you the power to protect your children with clarity and love, no matter what the future brings.

The post Choosing Your Child’s Guardian appeared first on Moak & Moak, P.C. -Attorneys At Law.

If you’re planning a vacation, sending kids off to camp, or just enjoying a slower season at work, now is the perfect time to get your legal and financial life in order. There are a few reasons why summer estate planning makes sense.

You’re Already in Planning Mode for Summer Activities.  Whether you’re organizing a family road trip or coordinating childcare while school is out, summer naturally puts you in the mindset of preparation.

That makes it easier to shift gears and think about your estate planning checklist:

            – Who would care for your children in an emergency?

            – Who would make decisions if you became seriously ill or injured?

            – What happens to your assets if something unexpected occurs?

Estate planning answers all of these questions, so your loved ones aren’t left guessing during a crisis.

Travel Season Highlights the Need to Update Your Estate Plan.  Before you pack your bags and board that flight, take a moment to ask: If something happened to me while I was away, would my family know what to do?

We all hope nothing ever happens, of course, but travel brings a natural reminder that life is unpredictable. Putting basic documents in place can offer huge peace of mind while you’re away:

–  Will: Directs distribution of your assets

– Power of Attorney: Authorizes someone to handle financial matters

–  Healthcare directives: Ensures your medical wishes are followed

Summer Is Ideal for Estate Planning Updates and Reviews.  Already have an estate plan? Summer estate planning season is perfect for essential updates:

–  Review your beneficiaries after major life changes

–  Check your guardianship designations as children grow older

–  Make updates after marriage, divorce, a new child, or a move

–  Verify account information and contact details

Your estate plan should grow with your life. Regular reviews ensure it still reflects your current wishes and circumstances.  A good rule of thumb is review these plans every 5 to 10 years.

Flexible Summer Schedules Make Estate Planning Easier.  Many people find it easier to attend meetings or complete paperwork during summer’s slower pace—especially if you work in education, have summer Fridays, or are taking some time off.

Creating or updating your estate plan doesn’t take as long as you might think. Most estate planning checklists can be completed in a meeting with your attorney, making summer the perfect time to tackle this important task.

Complete Your Estate Planning Before Fall Gets Busy.  We all know how fast the fall can fill up, back-to-school preparations, sports seasons, and holiday planning. Taking care of your summer estate planning now means you can step into the busy season with one major task already accomplished.

Don’t let another year pass without proper estate planning protection for your family.  ©

The post Summertime is a Good Time for Estate Planning appeared first on Moak & Moak, P.C. -Attorneys At Law.

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.

Estate administration involves the following steps:

1. Collection of the decedent’s assets;
2. Payment of debts and claims against the estate;
3. Payment of estate taxes, if any;
4. Determination of heirs, if the decedent died without a Will; and
5. Distribution of the remainder of the estate to those entitled to it.

In Texas, there are several different methods of administering an estate, some of the more common of which are discussed below.

Dying without a Will:

Many people may assume that if they are married and die without a Will in Texas, their surviving spouse will inherit their entire estate. This is not always the case. How their property is divided depends on whether it is characterized as community property or separate property.  Whether the children of the deceased person are also children of their spouse comes into the distribution as well.  This often results in a lawsuit to determine heirship and appointment of an Administrator.  Dying without a Will is the least desired result.

Standard Probate of Wills:

Whether you have a handwritten or typewritten Will, its validity must be proved in court.  This procedure is known as probate, and it generally must take place within four years after death.

A Will that is not proved in court is denied probate.  In this event, the decedent’s property passes to his or her heirs as if he or she died without a Will.  Again, this further emphasizes how important it is to execute a Will which meets all legal requirements so that property will pass as the decedent wished.  After proving the validity of a Will, the next step in the probate process is the administration of the estate.

Independent Administration:

Texas is one of the states that provides for independent administration – administration free of court supervision.  This means that after an independent executor or administrator is approved and an inventory of estate assets is filed with the court, the executor or administrator can simply take care of the administration of the estate without any further court involvement or supervision.  The independent executor or administrator is free to settle with creditors, set aside the homestead and other exempt property, manage the property of the estate, sell assets for payment of debts or taxes, and distribute the remaining estate to those entitled to it.  Thus, independent administration avoids the costs and delays associated with a court-supervised estate administration in which the executor or administrator must seek court approval before performing any of these acts.

Muniment of Title:

If there is no need for the appointment of an executor or administrator and the only reason for probating a Will is to clear title to property, a Will can be admitted to probate as a muniment of title.  Under this procedure, there is no executor or administrator appointed.  It is a somewhat more simplified method of probating a will than the traditional formal administration.  It is generally used only when there are no debts of the estate to be paid and no other actions that require the appointment of an executor or administrator.

Informal Family Settlements:

Informal family settlements are permissible where the estate is small and consists only of personal property, such as personal effects and household furnishings, but generally not where the estate includes real estate, bank accounts, stocks, and bonds.  If a motor vehicle is involved, a new certificate of title may be applied for by filing an affidavit of heirship with the Texas Department of Public Safety.

The transfer of property after a person’s death does not have to be scary or expensive.  However, the more organized information you have regarding the person’s estate the better.  Information on property, finances, family members, assets and key contacts are essential.  This information , together with cooperating with your attorney’s questions and providing information and answers, the quicker the process will be and it should help reduce the cost.

As always, check with your attorney to decide which method of estate administration is right in your particular circumstance.  Be sure to have gathered and organized information on the decedent’s estate and assets as well. It could save you time and money.  ©

The post Probate in Texas and Tips to Save Money appeared first on Moak & Moak, P.C. -Attorneys At Law.

Most of us have adjusted to balancing children, work and finding some time for ourselves.  But when we add caring for aging parents, it often becomes too much.  And usually it’s the “me” part that is sacrificed…until you hit burn out.

Here are some ways to leverage your time and resources so you can also take care of yourself.

Enlist Your Kids

Even the smallest child can spend charming one-on-one time with a grandparent.  If your parent lives with or near you, they can spend time together in person.  If your parent is not near you, they can Skype on the computer, use FaceTime or play multi-player online games.  Your children, no matter what their ages, will benefit from spending time with Grandma or Grandpa, they will see how you value and care for aging family members—and you will get some extra time to return phone calls, make dinner, or even catch a quick nap!

Ask About Options at Work

Check with your employer’s human resources department about resources that might be available to you. Depending on how long you expect to be caring for your parent, there may be a multitude of options available to you, including elder care research and referral services, flex time, even working from home options.  The Family and Medical Leave Act (FMLA) calls for eligible employees to receive 12 weeks of unpaid job-protected leave. (Private employers with less than 50 employees are exempt.)

Seek Assistance

There are legal and community resources that can help you make the best care and financial decisions for your parent.  A local Elder Care attorney can prepare the necessary legal documents and help you maximize your parent’s income, long-term care insurance and retirement savings, and qualify for VA or Medicaid benefits, if applicable.  He or she will also be familiar with various living communities in the area and in-home care agencies. You can also hire someone to review and verify or dispute insurance claims and medical billing.

Find Your “Me” Time

Stress is your biggest enemy and you have to find ways to reduce it.  Joining a caregiver group, in person or online, will let you share your questions and frustrations, and learn how other caregivers are coping.  Don’t be afraid to ask favors of friends and relatives, such as picking up your kids while you go to the doctor with your parent.  You could also learn to order in dinner every now and then without feeling guilty. Learn what you need to maintain your stamina, energy and positive outlook. That may include regular exercise (a yoga class, walk or run), a weekly outing with friends, or time to read or simply watch TV.

The post The Sandwich Generation appeared first on Moak & Moak, P.C. -Attorneys At Law.

A comprehensive estate plan often includes writing a Last Will and Testament to transfer your assets to your beneficiaries.  Once you’ve passed away, the executor of your Will shepherds the Will through the probate process.  However, you may have things you’d like to communicate to your loved ones and beneficiaries that you don’t want to include in the Will itself. Often, these are informal instructions that will help your executor carry out your wishes. It might also include such informal elements as opinions about your funeral, the values you’d like to be remembered for or a list of personal items designated for individuals.

Sometimes known as a letter of intent, a list of personal items designated to certain individuals is a document that provides specific information regarding your preferences as to who gets certain personal items, family heirlooms, sports memorabilia, jewelry, guns or a clock.  The letter of intent should clearly identify the individual and accurately describe the item you wish for them to have.  Labeling the item(s) helps as well. The Will contains a paragraph that specifically references this letter of intent or list so that personal items do not have to be made public record, but the executor knows who gets what item.

Another similar item is a letter of instruction on anything from key contacts, account information, family information, medical care, or your funeral wishes.  A letter of instruction isn’t legally binding in any way, unlike a Will.  Rather, it’s meant to be something of a crib sheet for the executor of your Will or your loved ones. You can use plain English to communicate anything you want regarding your affairs as a reference once you are no longer able to communicate this information personally.

Because there is no legal aspect to this document, you are free to also include messages to your family if you wish, and you can touch on matters that you may not be able to include in something like a Will or an advance directive.

What Should You Include in Your Letter of Instruction?

What you decide to include in your letter of instruction is completely up to you.  There’s no one piece of information that will qualify or disqualify your letter.  Your attorney should provide you with guidance in this matter and may even have a form.  That said, there are a handful of things that will make your executor’s life easier when she’s working to probate your estate. This information includes:

• A list of all your assets;

• The location of any assets that may not be readily accessible;
• All of your account information, including passwords, PIN numbers and account numbers, for any bank accounts or retirement accounts you have;
• Contact information for anyone who helps you with your finances, including attorneys, brokers, bankers and financial advisors;
• Informal directions about how you would like the executor to disperse some of your assets, typically heirlooms or other sentimental possessions;
• If you’d prefer people to make donations in lieu of flowers at your funeral, information about which charities you prefer;
• Where your executor can find your most recent tax returns, Social Security statements, birth certificate and other important documents;
• Similarly, where your executor can find any real estate titles/deeds or oil and gas leases, etc.;
• Your Social Security number;
• Any divorce and/or citizenship papers, or applications thereof;
• Contact information of any creditors (mortgage, car, etc.) and any insurance companies, particularly if you have a life insurance policy;
• If you have pets who will need a home, where you would like your executor to send them.

From there, you can include any messages or additional preferences that come to you. Some people choose to include a preference for burial or cremation. You might even mention which songs you’d like played at the funeral.

Letter of Instruction vs. Last Will

Although a letter of instruction and a Last Will discuss similar topics, they are distinct documents with several differences. First and foremost, a letter of instruction isn’t a legal document, while a Will has legal force. State law requires that your executor or administrator follow the terms of your Will, whereas no one is required to follow your letter of instruction. In order to prevent any potential conflict as to whether your letter of instruction is a testamentary document or not, you should let you estate planning attorney provide guidance.

Because of this distinction, a letter of instruction can be much more flexible. You’re essentially just writing a message to an executor or a loved one with helpful information. This is why you can choose to include anything you want.

A letter of instruction can’t take the place of a Last Will.  If you pass away without a Will, a court-appointed administrator will distribute your possessions according to state and county law rather than your letter.

While it can’t serve as a substitute for a Last Will, a letter of instruction can be extremely helpful to your loved ones.  You can spell your wishes out in simple terms, and you can leave them a final message without the formality that comes with a legal document.

It is very important to have an estate planning attorney help draft your estate planning documents, and provide guidance with letters of instruction.  It is money well spent to avoid expensive conflicts later.

The post MeMe’s Grandfather Clock appeared first on Moak & Moak, P.C. -Attorneys At Law.

1. Make sure the EIN is being obtained directly from irs.gov.  This seems obvious, but it is helpful to those unfamiliar with the IRS website.  Be aware a Google search of “obtain EIN online” could lead to unwelcome results such as websites of companies that offer to collect your information (and sometimes a fee) to obtain an EIN for you.  An EIN can be obtained from irs.govinstantly and at no cost. There’s no need to pay a fee or disclose personal, identifying information through any other website.
2. Confirm that appropriate legal authority exists before obtaining the EIN. An EIN should not be obtained before an executor or trustee has legal authority with respect to the estate or trust; therefore, the application should be made once the executor has been appointed and qualified as such or once the trustee has formally accepted trusteeship.  To qualify, an executor must take a sworn oath for example.  While the IRS website does not ask for this proof, it is necessary if audited.
3. When applying for an EIN for a trust, note that the IRS currently provides 18 different types of trusts to choose from.  Choosing the right one matters.
4. You will be asked if the estate will use a fiscal or calendar year.  You should select the ending month that will give you the longer tax year.
5. Make sure the name of the decedent matches the probate records. When applying for the EIN of an estate, use the Decedent’s name exactly as stated in probate records. Doing otherwise could cause problems for the executor when the executor attempts to open a bank account in the name of the estate.
6. Make sure the name of a trust matches the name as indicated in the governing instrument.  As with an estate, you will want to make sure the name of the trust you list on the EIN application is consistent with the name of the trust as indicated in the governing document.
7. Be aware that the IRS typically will not give the same responsible party more than one EIN on the same day.  The IRS typically limits the number of EINs a responsible party can obtain on a given day, with the current cap understood to be one.
8. If wires got crossed and two EINs were obtained for the same trust or estate, you must contact the IRS right away.
9. Know when you might need an EIN for a grantor trust.  For many grantor trusts, an EIN will not be needed for the trust while the grantor is still living because the grantor’s social security number will effectively serve as the trust’s EIN, and the trust income will be reportable to the grantor.  This is also true when a grantor trust has two grantors who are married and file their income tax returns jointly, as the trust income is reportable on their joint return.  However, if the trust has two grantors who are not married to each other or who are married to each other but file separate income tax returns, the trust will need its own EIN.
10. Consider who the “responsible party” is. The EIN application will ask who the “responsible party” is for the trust or estate. The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. For an estate, it follows that the responsible party is the executor or administrator.  For trusts, the responsible party is a grantor, owner, or trustor.

Most attorneys who are handling the estate or trust will obtain the EIN and take care of these matters.  However, I believe it is important to understand these points so that you and your etate attorney are on the same page.

While Texas has the best system for transferring your property through your estate planning, it is more than a document.  It is a process process with many moving parts to secure your legacy.

The post EIN Pointers for the Executor or Trustee appeared first on Moak & Moak, P.C. -Attorneys At Law.