Despite this inability for trusts to hold title, property in Texas is regularly conveyed to trusts instead of trustees.  This mistake is likely made through a combination of the parties’ desire to remain anonymous and ignorance of Texas law.  It is a common practice by title companies and attorneys to correct the grantee from the trust to the trustee with a correction deed.  However, in a recent case out of the Federal District Court for the Southern District of Texas, this practice was questioned.  In Fugedi v. United Rentals, the Court held that a deed conveying property into a trust instead of the trustee is void.  The Court further held that such a conveyance cannot be corrected with a correction instrument.  Fugedi appealed to the 5^th Circuit.

The 5^th Circuit reversed, holding that Texas law allows the grantee to be inferred when none is listed.  The Court futher held that even if Texas courts would not allow a grantee to be inferrd under the facts of this case, Fugedi effectively corrected the mistake with a non-material correction instrument.

While the 5^th Circuit seems to have corrected this potentially industry uusetting decision out of the District Court, som ambiguity remains on the issue of conveyances to trusts and how to correct them.  So, the 88^th Texas legislature resolved these ambiguities with House Bill 4284 which amended the Texas Property Code §114.087 to state that the trustee of a trust is considered for all purposes to be the named party to an instrument that names the trust as a party to the instrument in any capacity.  It also states that the trustee of the trust may file a correction instrument.

If you have a trust or are thinking of a creating a trust that will hold real property, then you should consult an attorney to be sure that the property is titled properly and how it may effect title insurance on the property.

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I have discussed voting with many people and I am always amazed at how many people do not take advantage of their right to vote.  Considering the extreme sacrifices our ancestors endured to obtain and protect this right, it baffles me that voter turn out is so low.

To underline the importance of voting, this week I thought I would provide some of the most famous events in the voting history of the United States.

• The passage of the U.S. Constitution in 1787 gave white male property owners age 21 and over the right to vote.
• Series of acts from 1807 through 1843 changed voting requirements so that all white men 21 and older could vote.
• The 15^thAmendment, passed in 1870, guaranteed the right to vote to all men that were 21 or older regardless of race or ethnic background.
• The 19^thAmendment, passed in 1920, gave women age 21 and older the right to vote.
• The 24^thAmendment, passed in 1964, made it illegal for states to charge poll tax to voters.
• The Voting Rights Act authorized the federal government to take over registration of voters in areas where state officials had regularly prevented blacks and other minorities from registering to vote or cast their ballots through usage of literacy tests, grandfather clauses, and intimidation tactics. This Act enforced provisions previously guaranteed in the 13^th, 14^th, and 15^thAmendments of almost a century earlier.
• The 26^thAmendment, passed in 1971, lowered the voting age across the nation to 18.
• The Voting Rights Act Amendments of 1982 extended right to vote guarantees given in the 1965 legislation. Further provisions for Americans with disabilities, voters not able to read and write, and those not fluent in English were added to insure their freedoms.
• The National Voter Registration Act (Motor Voter) of 1993 expanded the opportunity for convenient voter registration for every person of voting age by increasing the number of active government agencies serving as registries.

The departments of Safety, Health, Human Services, Mental Health and Retardation, and Veteran’s Affairs are required to include voter registration applications with their own department’s forms. Other government offices such as libraries, post offices, county clerk offices, and the Registrar of Deeds will also have voter forms available to the public.

According to a study done by Dr. Michael McDonald, Department of Public and International Affairs at George Mason University on voter turnout, 28% of the eligible voters in Texas actually voted in our 2008 Presidential Primary.  This was up from 2000 (11%) and 2004 (15%).  However, I still feel this low turnout is very sad.

Many times I am given the excuse “one vote does not matter.”  So I thought I would provide you with some examples of where one vote did matter.

• In 1645, one vote gave Oliver Cromwell control of England.
• In 1776, one vote gave America the English language instead of German.
• In 1868, one vote saved President Andrew Jackson from impeachment.
• In 1875, One vote changed France from a monarchy to a republic.
• In 1876, one vote gave Rutherford B. Hayes the Presidency of the United States of America.
• In 1923, one vote gave Adolf Hitler leadership of the Nazi Party.
• In 1941, one vote saved the Selective Service – just weeks before Pearl Harbor was attacked.
• In 1990, one vote decided a state House race in Oakland County, Michigan.
• In 2008 the first African American was elected President of the United States.
• In 2016, in what many thought was an upset, Donald J. Trump was elected President of the United States.
• In 2020, in what can best be described as chaos, Joe Biden was elected.
• This year, 2024, we have an opportunity to elect our State Representative and they could be right here from Huntsville.  Who better is plugged into our needs!

In his Gettysburg Address, Abraham Lincoln said: “It is rather for us to be here dedicated to the great task remaining before us — that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion — that we here highly resolve that these dead shall not have died in vain — that this nation, under God, shall have a new birth of freedom — and that government of the people, by the people, for the people, shall not perish from the earth.”

Early voting opens Tuesday, March 5, take advantage of your right to vote.  No matter who your personal choice is, the key is that you exercise this right paid for so dearly by our ancestors.  So, be a part of history, VOTE!

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The statistics are staggering: most parents do not have Wills or other documents naming guardians for their children if something happens to the parents. Fewer than 50-75% of parents have named guardians for their minor children.

Why? One reason is likely lack of knowledge – some parents might understand that a Will is the traditional place to name guardians for children (and the thought of planning for death doesn’t thrill them), but haven’t considered that a Will only applies at death. With medical advances that keep people alive longer, it is more likely that an accident or illness will result in an individual’s incapacity, not death. A stand-alone guardian nomination is an additional document that addresses this modern reality by naming guardians for children whenever the parents are “unavailable,” whether by short-term, long-term or indefinite incapacity, or by death.

Another common reason parents do not do designate guardians for their children is that they might think “Well, I just assumed my kids would be with my mother,” or “Wouldn’t my kids automatically go to my brother?” Assuming that a certain family member would take over automatically might work if there are no other blood  relatives of either parent, or both parents’ extended families never disagree.  If that is not the case, however, you don’t want to take a chance on leaving your children in the middle of a dispute (litigation) about whom can best care for them.

The biggest reason parents do not  designate guardians for their children is that “no one feels right” to take their place. They start going through the obvious options and think, “this person isn’t perfect because A, that person isn’t perfect because B,” and so on. Or, in discussing the trade-offs, the spouses disagree on who to name.

First, think of people – there is no rule that guardians must be relatives – that are capable of fulfilling the role.  For a guardian, start with people that have the health, stamina, and patience necessary to care for your children. An older grandparent who is slightly physically impaired (e.g., uses a cane) could work for one mild-mannered 15 year old, but probably not for rambunctious two year old twins.  If your child is very involved in his school, sports, community activities, and/or religious organization and moving to where your sister (in-law) and family live would be an additional trauma for him, the family of his best friend might be a better choice if their child-rearing values are similar to yours.

Second, think about what you value most for your children – Family? Location? Religious observance? Lifestyle? Then, evaluate which people on the list best embody what you value most for your children.  If you are truly stuck, think of the worst person who could be named by a court to take care of your children. Thinking about who you don’t want, and why, can help you articulate what you do want.

Lastly, realize no one is going to be able to “take your place”.  In fact, the kind of planning we do keeps you in your place by providing instructions and guidance about what you want for your kids to the guardians, to the trustees managing how your money is spent on your kids’ behalf, and directly to your kids. By planning, you will be able to provide guidance to a less than ideal individual – a much better situation than having no plan and possibly family arguments or even foster care.

If you are part of the minority who has done their planning but it’s been some time since your documents were put in place, are the people still right?  Or have situations changed caused by marriage, separation, divorce, births, deaths, change in location, level of trust, type of relationship, etc.? If so, does it affect their ability to serve in the role for which you have named them?

As a lawyer my job is to give counsel to  clients on the choices the client has based on the law and the client’s circumstances.  If you are having a hard time deciding who to name as guardian for your children, or any of your other fiduciaries (trustee, health care power of attorney), I can counsel you.  Moreover, as a third party I can help spouses bridge their differences about who is the right person to be named guardian of their children.

If you’d like to learn more about naming guardians and estate planning, call our office today to schedule a time for us to sit down and talk.

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This week’s column is not a cautionary tale about a family who put off their planning and regretted it, this week’s column is about the peace and relief that forethought and planning brings not just to your family, but to you as the person making the plan.

In a recent article in Market Watch, Chuck Jaffe tells the moving story of his brother Rob, who insisted 2 years ago on creating an estate plan even though he and his wife were both healthy. As Jaffe puts it, “While not pleasant subject matter, it was not morbid… you’d rather be drinking lemonade on the veranda, but it wasn’t a sharp stick in the eye.” However, when Rob became unexpectedly ill in May of last year the estate plan turned out to be a comfort to Rob and his family—such a comfort, according to Jaffe, that Rob “made me [Chuck] promise that I would write about him… when his time was up, because his story would help others.”

“People need to understand… how big a blessing it is to know — when their time comes — that they have everything in order, that they don’t need to stress or worry about how things they worked their whole life for are going to turn out. I would not want to waste a minute of my life now having to do estate planning or worrying that I live long enough to get documents filed or whatever garbage comes with it. Focusing on death and dying while you are living, that’s easy; having to focus on death when you are dying, that would be unimaginable.”

In my business I frequently see how much easier it is for people to create a plan when they’re healthy, as opposed to the stress that comes with creating a plan when they are sick. Thank you Mr. Jaffe for sharing your brother’s moving story. I hope that your (and your brother’s) words will help motivate others to take comfort in planning ahead.

If your family has been putting off the necessary discussion of estate planning, I hope Mr. Jaffe’s story motivates you to work on it.   When you’re ready, call our office. We can help your family with the practical details and legal aspect of creating your estate plan and you’ll have the comfort of knowing it is done correctly and will work when the time comes.

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I am not talking about the diet you vowed to follow in your New Year’s Resolution, or trying to look good in that new bathing suit this summer; what I am talking about is your annual checkup—taking stock of your health with your primary care physician and making sure you are both on the same page with your instructions for health care and your advanced healthcare directive or living will.

When clients come into our office for an estate plan, we ensure that their healthcare instructions are completed as well.  But the job doesn’t end when the document is signed. We tell our clients their health care providers need to be aware of their wishes as well. The best way to ensure that they know and understand your wishes is to take a copy of your advanced healthcare directive or living will with you to your next check up and talk to your physician about it, then ask them to keep the copy on file.

A rule of thumb with healthcare wishes is to give a copy of your Medical Power of Attorney and your Directive to Physicians and Family to each of your primary care physicians, give copies to each of the healthcare agents you’ve nominated, AND keep a copy or two on file to take with you if you ever need to go to the hospital. Of course, keep the signed original in a safe place with the rest of your estate planning documents.

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, or your health care directives, etc. we can help!  We look forward to hearing from you and assisting you with any and all elder law and estate planning needs.

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Probate or 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 or establishing heirship if they did not.  The formal process of probate in Texas is normally very simple and quick.  However, what can take a great deal of time is the transfer of the decedent’s assets if they have not properly planned ahead.  Family dynamics can also complicate or delay matters, particularly if a child predeceases a parent or it is a blended marriage with children from prior relationships.

Probate may not be required when the decedent’s estate is very small, but is required in most  circumstances.  In fact in a fairly 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.  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, the Texas Estates Code controls disposition of the estate.  This process can be complicated, involve contacting many heirs, and take a great deal of time.  If the deceased spouse has children from outside the current marriage, those children also will  have rights to the property.  In the scenario just mentioned, the children of the deceased spouse end up owning a portion of the property along with the living spouse.  However, neither can sell the property without each other’s approval.  This is a very common issue and can often lead to conflict.

Please note that there are limitations as to which form of probate may be used depending on the situation, and no Will shall be admitted to probate after the lapse of four years from the date of death. You should not delay seeking the advice of your attorney to decide which method of estate administration is right in your particular circumstance. Having a well written and current Will, particularly with a blended family,  could save you time and money.

The post Do I Probate My Spouse’s Will? appeared first on Moak & Moak, P.C. -Attorneys At Law.

1. They try to lure you with a cheap product and a process that takes less than half an hour to complete.
2. They try to assure you with testimonials of customers professing that their product has given them “peace of mind.”
3. They provide you with a portal that gives you a “general understanding of the law” even though the information it contains  is “not guaranteed to be correct, complete or up-to-date.”
4. They suggest that the document you get from their company will be just as effective as one an attorney creates by garnering endorsements from famous lawyers like Robert Shapiro, a lawyer known for a criminal trial that had nothing to do with Wills or estate planning.

In short, despite a disclaimer that their document preparation services are not a substitute for the advice of an attorney, they try to convince you that the advice of an attorney is simply not necessary.

Do-it-yourself wills provide a false sense of security

As part of an experiment, Minnesota attorney, Gregory Luce, who is currently the Practice Development Director at the Minnesota State Bar Association, agreed to buy a Will though LegalZoom.  He has recorded his progress doing so in a series on his Practice Blawg and plans to compare the service and Will he obtains from LegalZoom with the process of getting a will prepared by an attorney.

Greg is married, and has two children: one from a previous marriage and the other from his current marriage. Even though he does not practice estate planning, he is a licensed attorney. His experience provides a glimpse at how even an educated consumer may be lulled into “peace of mind” by a document with significant flaws.

Is the advice of an attorney necessary in the preparation of a will?

Greg posted a video on his blog that documents his experience of obtaining a will through LegalZoom. Although it’s somewhat lengthy, I’d encourage you to watch it because it demonstrates how easy it is for even an attorney to make significant mistakes.  One thing that stunned me as I watched the video was the following highlighted statement:

On the top left-hand corner of the page, LegalZoom reveals that 80 percent of people who fill in blank forms to create legal documents do so incorrectly. Despite this disclaimer, LegalZoom tries to reassure its customers that professionals are there to help; that customers can have “peace of mind” knowing that LegalZoom professionals will customize their will based on their legal decisions.  But LegalZoom is not a law firm.  It is not permitted to review your answers for legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation.

Consequently, LegalZoom resorts to providing only general information on legal issues commonly encountered and offers guidance in some instances by indicating that a majority of its customers have answered a question a certain way.  The problem is that everyone’s situation is unique.  Just because the majority of customers have answered a question a certain way, for example, does not necessarily make it right for your individual circumstances.

So if serious legal mistakes are made, you’ll never know because they will not become apparent until you die.  And the people left to deal with the mistakes are the people you are probably trying to protect by creating your Will.

Do it yourself Wills are just not worth the risk.  Attorneys do more than draft a document.  They advise you, based on years of experience and thousands of real life situations, on the best way to protect your family and preserve and distribute your assets according to your wishes.  Additionally, LegalZoom and homemade Wills cost more to probate in most circumstances.

While the advice of an attorney costs more, you have peace of mind that your loved ones will benefit in the manner you desire without adding headaches and problems to an already stressful time.

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Since an institution involved in a reverse mortgage is advancing money without knowing for sure when it will be repaid, there are high up-front costs for commercial reverse mortgages. Fees can be as much as 5% of a home’s value and required mortgage insurance premiums can range from 0.1% for loans with a low payout to 2% for those with a higher payout.

As an alternative to commercial lenders, some families set up private reverse mortgages. A private reverse mortgage is basically a private loan to the homeowner, usually from a family member, that is secured by a mortgage on the senior’s house.

For the senior homeowner, a private reverse mortgage can have these advantages:

The costs of having an attorney set up the mortgage should be reasonable and a lot less than the costs of a conventional reverse mortgage with a bank, and there are no ongoing mortgage insurance costs. Also, the interest rate, set each month by the IRS, should be less than the rate on a commercial mortgage.

Since there is no limit on the percentage of the home equity that can be borrowed, the owner can tap into more of that equity and put farther off the day when he or she has to move for financial reasons.

A private reverse mortgage need not be paid back until the house is sold, leaving open the option of the owner’s moving to a nursing home but keeping the house.

The owner can continue to receive payments on the mortgage if needed to maintain the house or to pay for extra care at a nursing home.

For the lending family members, the arrangement can have these advantages over a reverse mortgage with a financial institution:

The financial benefits for the senior family member carry forward to the whole family, because savings on mortgage costs should translate into a bigger estate ultimately passing on to surviving family members.

The flexibility to tap into more equity in the home could give family members the option to hire more paid caregivers or even to pay themselves for providing such care.

Even though interest rates for private reverse mortgages set by the IRS are pretty low, they still return more than can be earned in money market accounts or certificates of deposit. In other words, it beats having money just sitting in a bank.

There are some cautionary aspects to private reverse mortgages. Lending family members need to anticipate that the money they advance may not come back to them for a long time. It is also prudent to consider that there is some risk that the entire loan may not be paid back, if the ultimate proceeds from the sale of the home are insufficient to pay off the loan, with interest. Of course, these and any other concerns should be fully aired and taken into account when the private reverse mortgage is being contemplated in the first place and when its terms are set. Certain family dynamics may not allow a private reverse mortgage to work either.

If you are thinking of a reverse mortgage as a way to obtain cash or looking for ways to transfer assets in your estate, you should sit down with an attorney familiar with real estate and estate planning to find out what will work best for you.

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One side of the capacity equation involves the person’s abilities, which may change from day to day (or even during the day), depending on the course of the illness, stroke, fatigue and the effects of medication. On the other side, greater understanding is required for some legal activities than for others. For instance, the capacity required for entering into a contract is higher than that required to execute a Will.

The standard definition of capacity for Wills has been aptly summed up by the following:

Testamentary capacity requires ability on the part of the testator to understand and carry in mind, in a general way, the nature and situation of his property and his relations to those persons who would naturally have some claim to his remembrance. It requires freedom from delusion which is the effect of disease or weakness and which might influence the disposition of his property. And it requires ability at the time of execution of the alleged Will to comprehend the nature of the act of making a Will.

This is a relatively “low threshold,” meaning that signing a Will does not require a great deal of capacity. The fact that the next day the testator does not remember the Will signing and is not sufficiently “with it” to execute a Will then does not invalidate the Will if he understood it when he signed it.

The standard of capacity with respect to durable powers of attorney varies from jurisdiction to jurisdiction. Some courts and practitioners argue that this threshold can be quite low. The client need only know that he trusts the attorney-in-fact to manage his financial affairs. Others argue that since the attorney-in-fact generally has the right to enter into contracts on behalf of the principal, the principal should have capacity to enter into contracts as well. The threshold for entering into contracts is fairly high.

The standards for entering into a contract are different because the individual must know not only the nature of her property and the person with whom she is dealing, but also the broader context of the market in which she is agreeing to buy or sell services or property. In a Massachusetts Appeals Court case the court reversed the sale of a home by a 90-year-old woman suffering from organic brain disease. The sale was for half of the house’s market value. The court contrasted competency to sell property with the capacity to make a Will, the latter requiring only understanding at the time of executing the Will:

Competency to enter into a contract presupposes something more than a transient surge of lucidity. It requires the ability to comprehend the nature and quality of the transaction, together with an understanding of what is “going on,” but an ability to comprehend the nature and quality of the transaction, together with an understanding of its significance and consequences.

As a practical matter, in assessing a client’s capacity to execute a legal document, attorneys generally ask the question, “Is anyone going to challenge this transaction?” If a client of questionable capacity executes a Will giving her estate to her husband, and then to her children if her husband does not survive her, it’s unlikely to be challenged. If, on the other hand, she executes a Will giving her estate entirely to one daughter with nothing passing to her other children, the attorney must be more certain of being able to prove the client’s capacity.

While the standards may seem clear, applying them to particular clients may be difficult. The fact that a client does not know the year or the name of the President may mean she does not have capacity to enter into a contract, but not necessarily that she can’t execute a Will or durable power of attorney. The determination mixes medical, psychological and legal judgments. It must be made by the attorney (or a judge, in the case of guardianship and conservatorship determinations) based on information gleaned by the attorney in interactions with the client, from other sources such as family members and social workers, and, if necessary, from medical personnel. Doctors and psychiatrists cannot themselves make a determination as to whether an individual has capacity to undertake a legal commitment. But they can provide a professional evaluation of the person that will help an attorney make this decision.

Because you need a third party to assess capacity and because you need to be certain that the formal legal requirements are followed, it can be risky to prepare and execute legal documents on your own without representation by an attorney.

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