Who pays the bills in your house?  If your house is like most, there is probably one person who handles most of the financial matters. Would you or your spouse be prepared to assume the role of managing the household finances if something happened to the other spouse?  Too often, clients have gone through the process of ensuring their estate plan is in order, just to realize that, when one passes away, the other does not have the information they need to pick up where the other left off.

Consider the checklist below when organizing your household finances.

1. Organize your financial documents and personal information. Leaving behind an organized filing system including everything from account information to contact numbers will help your spouse or children when they need to sort through that information. Imagine the frustration of having to dig through scattered envelopes and stacks of papers to find account information after the recent loss of a loved one. Make sure your spouse knows the location of where personal information is kept, including Wills, Trust documents, insurance information, social security cards, birth certificates, medical records, tax return information, etc. Write the names and contact information of family members, friends, and other emergency contacts. Include the contact information for the professionals you use, such as your doctors, lawyers, attorneys, CPAs, financial planners, insurance agents, etc.

2. Make a list of all of your assets and liabilities. Your assets should include bank accounts, brokerage accounts, safety deposit boxes, properties, etc. Your liabilities should include credit cards, mortgages, car payments, etc.  For each item, list the location, the names on the accounts, the account numbers, and any website login information including usernames, passwords, and security questions. If you were to pass away, this would help your spouse identify what and where all of your assets are.

3. Identify all sources of income and expenses.  This will give your spouse a checklist to follow so they can understand what inflows to expect as well as what bills need to be paid. Indicate whether you pay each bill by paper or online.  If online, be sure to include the usernames, passwords, and security information to access the websites.

4. Document any other miscellaneous information that your spouse might need to run the household.  This part of the planning is not always financial, but still very important.  For example, does your spouse know where you keep the spare keys to your house, or any keys to gates, sheds, lock boxes, or safes?  Make an effort while you are going through your daily routine to think of things that are obvious to you, but may not be as obvious to your spouse or children. Include a list of passwords for social media and other online accounts, passwords for tablets and other electronic devices, locations of flash drives or CDs with old family pictures, and even a basic household maintenance checklist.

Sometimes it is the intimate details of a family’s situation that can be hardest to plan for, but detailed planning will result in the peace of mind that the spouse and family will be taken care of in the event of death or incapacitation.  Sit down with a trusted attorney if you need assistance with planning for these and other life events.

The post COMMUNICATE DETAILS appeared first on Moak & Moak, P.C. -Attorneys At Law.

To start, let’s basic difference between a Will and a Trust in simple terms, so you can get a basic idea of what’s out there.

Wills executed in Texas can be relatively easy to probate. If the will contains proper language appointing an “independent executor” and contains “self-proving affidavits” from 2 witnesses over the age of 14, then your estate should be in an out of probate in a jiffy. If you do not have a will, or it does not appoint an independent executor, or is not self-proving, in that event THE LAWYERS WILL GET ALL THE MONEY.

An independent executor need only make application to the court for admission of the Will to probate, and do an inventory and appraisement. If no debts or taxes are due, the estate may then be distributed to the devisees (devisee is a fancy lawyer word for “heir”). Technically heirs and devisees are different, but you will have to pay me to explain all that.   Another term is beneficiary (another fancy lawyer word for who benefits from the Will).  The benefit to not having debt is that only the beneficiaries see the inventory.

Thus, an estate driven by a Will does not require a great deal of management, allows the individual to maintain ownership of assets until death, can be simple, private and relatively inexpensive.

Generally, a trust is a legal instrument that transfers  title to designated property from the owner, called the settlor, donor or grantor (settlor), to a trustee, who holds the property for the beneficiaries of the trust.  The settlor can also serve as the trustee, thereby enhancing control over the trust during the life of the settlor.  In such a case, a successor trustee is usually named in case the grantor dies or is incapacitated.  Depending on the size or complexity of

the trust, the trustee, or cotrustee, might

be an institution, so as to bring more expertise to the position.

When utilizing a trust for your estate plan there are several considerations.  Once created, all property belonging to the settlor must be transferred into the trust.  This includes real estate, financial accounts, vehicles and any other property.  Over time, as property is sold and/or acquired, the trust must be utilized and the property placed in the trust name.

If you are seeking tax relief from the trust, then you will not be able to act as the trustee.  Additionally, you may not be able to amend the trust.  Many folks are not comfortable giving up control of their assets.

Another consideration are the homestead, disability or over 65 exemptions effecting your property.  In order to maintain these exemptions, the trust will need to contain specific language.  It may not be possible to maintain all these exemptions.

Trust are popular in many states because of different property and tax law.  However, what works in one state, may not be the best in your state (Texas).

There are many different types of trust and one might be appropriate in your plan, but there is lots of misconceptions about trust.

If you considering an estate plan, you should sit down with an attorney experienced in estate planning to assist you in making sure which estate plan is correct for your needs.  We have the experience and would be glad to help you in this regard.

The post Will or Trust? appeared first on Moak & Moak, P.C. -Attorneys At Law.

It is important to discuss your employment plans with your spouse. Your job may provide you and your spouse with health insurance and income, but it can also take up a significant amount of your time.

If you or your spouse are currently working, it’s important to talk about what you both want to do in the future. If one or both of you plan to retire or stop working soon, you need to consider how it will affect your lifestyle and future plans. Additionally, if you both have different aspirations for retirement, it’s important to discuss how you can compromise and find activities that you can enjoy together.

As a married couple, it’s important to discuss your retirement plans and make sure your financial future is secure. Retirement means the loss of one type of income and many people rely on their retirement accounts to provide a significant portion of their retirement income. However, this requires advanced planning and open communication between spouses.

When discussing retirement, it’s important to consider when you plan to retire and whether you can afford to stop receiving a paycheck. If you are unsure, meeting with a financial planner can help ensure your finances are in order. Additionally, you should consider whether there will be a period of time when both of you will be retired or not working, and whether you will have enough money from other sources to support your lifestyle during this time.

Another important topic to discuss is when you plan to withdraw the required minimum distributions from your retirement accounts. A financial advisor can help you determine the best strategy given your current account balances and your desires for the future. Finally, if there is a significant age difference between you and your spouse, it’s important to discuss whether the younger spouse is anticipating using the retirement funds from the older spouse for their lifetime as well, and whether there will be enough money to support both of you.

Creating an estate plan is important because it ensures that your loved ones are taken care of when you die. Without an estate plan, Texas law will determine how your money and property will be distributed, and who will make decisions for you if you are unable to make them for yourself.  When reviewing or creating your estate plan, there are several important things to consider.

Firstly, you need to decide who will serve as your trusted decision-makers, such as your executor, successor trustee, agent under a financial power of attorney, and agent under a medical power of attorney. Because of the age difference between you and your spouse, it is advisable to name alternates to these positions in case your first choice is unable to act on your behalf. If you have children from a previous relationship, you should also consider if and in what order you want to name them to one of these important decision-making roles.

Secondly, you need to decide who you want to receive your property and money after you die. If your spouse is your beneficiary, you need to consider whether you want them to receive the inheritance outright or in trust. If you plan to leave an inheritance to your children, you need to decide whether they will receive it immediately after your death or after your surviving spouse’s death.

Lastly, if you have children from your current marriage and previous relationships, you need to consider if  you want them to be treated the same when it comes to inheritance or if you want to give preferential treatment to one group. These are some of the important issues to think about when creating your estate plan.

An estate planning attorney can help explain any estate planning documents you need, including Wills, trusts, powers of attorney and beneficiary designations, and help you create these documents for your current situation.

The post Estate Planning with an Age Difference appeared first on Moak & Moak, P.C. -Attorneys At Law.

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 most important functions a person can perform for their loved one is to act as their executor. This is an honor and privilege that is bestowed upon someone because of the person’s trust, faith and confidence in them.

If someone close to you asked you to be the executor, you should feel honored, but at the same time you may be quite unsure of your responsibilities. What do you need to do, when does it need to be done and how much time will it take?

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.

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

The post DUTIES OF AN EXECUTOR appeared first on Moak & Moak, P.C. -Attorneys At Law.

Write down your goals. You may have a number of intertwined goals for your estate plan (this is especially true for blended and multigenerational families), or one simple-but-important goal such as “ensure my minor children have a place to go” or “keep the family business intact.” Knowing your goals from the outset will make all subsequent decisions much easier.

Make a list of the people you trust. Throughout your estate plan you’ll be nominating people to take over financial, healthcare, and guardianship responsibilities if something happens to you. Have a rough list of people you would trust in these roles. Begin with your initial goal and go from there. For example, if your initial goal was guardianship of minors, make a list of people you would trust with the care your child(ren), and move from there to financial and healthcare decision-makers.

Make a list of people you don’t trust. If you’re having trouble coming up with people for the list above, it sometimes helps to consider the people you would NOT want to be responsible for your child, your finances, or your healthcare. Write down those people and work backward from there. If your kids must be kept from crazy Uncle Joe at all costs, would your cousin Emily be an acceptable alternative, even if she does have a different parenting style?

Know your assets. Make a list of all your assets and their approximate values. This will help your estate planner determine what kind of asset protection you need in your plan. Assets include:
• Your Home
• Investment/Vacation Property
• Bank Accounts
• Savings/Investment Accounts
• Retirement Accounts
• Life Insurance
• Family Owned Business
• Farm/Ranch Property or equipment
• Art, Jewelry and other personal property of significant value

Bring In the Professionals. Estate planning is a very technical process, and the laws may frequently change, so you’ll definitely want professional help with the details of the process. The good news is that now that you’ve completed the beginning steps, the follow-through with your chosen professional advisor will be a snap! If you already have a relationship with a trusted attorney, insurance agent, financial advisor or CPA you’ll want to start there. Let that person know your goals and that you’re ready to begin planning in earnest. He or she will be able to guide you onto the next steps or give you the name of an estate planning professional who will help you build your ideal plan.

Although it looks overwhelming from the outset, estate planning is really just a series of small steps, each of which leads you to the achievement of your ultimate goal: Preserving your assets and protecting your loved ones. Now that you know it’s so easy… what are you waiting for?
—
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.

The post A Guide for Getting Started on Your Estate Planning appeared first on Moak & Moak, P.C. -Attorneys At Law.

Fortunately, Texas now allows Irrevocable Trusts to be amended, even without court involvement. “Decanting” and “nonjudicial reformation” are legally acceptable ways to amend provisions without court approval that otherwise would be set in stone. Typically, you need the consent of the Grantor, Trustees, and beneficiaries to comply with state law.

The dilemma is whether these changes could jeopardize the estate tax advantages the client desired and obtained at the creation of the Trust. The good estate tax news is that the IRS has issued a number of Private Letter Rulings that indicate estate and generation skipping tax advantages will still apply even if an Irrevocable Trust is modified. Of course, the devil is in the details, in determining what types of changes are appropriate and the method in which the changes can be done under state law. But at least in the estate tax world, what is irrevocable may be irrevocable only in part.

While a trust is appropriate for some people, the cost of creating, funding and administering a trust outweighs the benefits for many people. The real question is whether the anticipated reduction in future probate costs will be offset by the immediate cost of creating, funding and administering the trust during the remainder of the person’s lifetime. In some limited instances, such as owning property out of state, true tax savings (unnecessary unless you have more than $10.6 million) or a person’s inability to manage their assets, a trust is warranted. But, it is important to decide what your needs are before creating a trust.
If you find yourself with a living trust or irrevocable trust, it is a good idea to have it reviewed periodically to make sure it still meets your goals. If you are not sure whether the trust has been properly funded or maintained or perhaps if it is an irrevocable trust and you want to make changes, then you should defiantly seek an attorney who is trained and familiar with estate planning and probate. The advice they provide will assist you in making sure your plan meets your goals.
—
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.

The post Amending the Irrevocable appeared first on Moak & Moak, P.C. -Attorneys At Law.

About a year or so ago, I wrote an article explaining that the best way to avoid a Will contest is to have a well written Will prepared by an attorney who can help you avoid potential conflicts. One aspect of the estate planning process that is very important, the Testator’s signature.A Will must be written in the correct form and executed according to the law to be valid. Most of the cases dealing with improper form or execution/signature of a Will involve documents that were prepared by individuals instead of attorneys. A person may type out a Will on their computer, download a form from the Internet or copy a form from a book. Since the law is very strict about the form and execution of Wills, many of these documents are not considered to be valid because of mistakes in the form or because of improper execution.

A common allegation in a Will contest is that the document was forged. In the Matter of the Estate of Zerboni, 556 S.W.3d 482 (Tex.App.-El Paso 2018, no pet.), the wife probated her husband’s Will. Their daughter later intervened claiming that the signature on the Will was a forgery and thus she would be a beneficiary under a prior Will. The daughter brought forth evidence of a handwriting expert who examined dozens of the husband’s documents and who concluded that the signature on the Will was a forgery. However, the expert’s report or testimony was insufficient because none of the dozens of sample documents used were proved as admissible in court and thus, the expert’s opinion was not proof of forgery. The expert merely said he compared the sample signatures to the Will signature and concluded that the signature on the Will was a forgery. The expert failed to explain the perceived differences between signatures.

The moral to this example is that a Will contest alleging forgery needs to bring forth clear evidence from an expert who explains the reasons for the conclusion that the Will is forged. In another example, Estate of Luce, No. 02-17-00097-CV, 2018 WL 5993577 (Tex.App.-Fort Worth Nov.15, 2018, no pet.), the testator had been severely injured in an accident rendering him a quadriplegic and unable to speak or sign. However, he was able to communicate by responding to “yes” or “no” questions by blinking his eyes. Using this blinking system, the testator’s attorney drafted a Will and the testator directed a notary to sign the Will for him.

After the testator died, his estranged wife attempted to probate an earlier Will and the testator’s sister filed an application to probate the new Will. The trial court admitted the new Will and upon review by the appellate court, this was upheld. The Texas Estates Code §251.051(2)(B) allows a Will to be signed by a proxy in the testator’s presence and by his direction. The court found the blinking system was sufficient to establish the testator’s directions. Additionally, Government Code §406.0165 authorizes a notary to sign a document when directed to do so by a person unable to sign. After examining the evidence, the court determined the testator had testamentary capacity and was not subject to undue influence.

The moral here is that the Will of someone with limited physical ability has an enhanced chance of being contested, and thus, the drafting attorney should take extra precautions to solidify testamentary capacity, testamentary intent and compliance with the Will formalities of proper execution of the Will.

Unless you elect to be proactive, upon your death your loved ones could be entrenched in a long inheritance conflict lasting for years and costing thousands of dollars. However, with careful planning, you can avoid some and hopefully all of the inheritance conflicts among your loved ones. After all, the reason why you plan for your death is not for you, but for those whom you love the most.

A simple hearing over preliminary matters or discovery can take over 3 hours. Thus a family could spend a great deal of money on legal expenses with no resolution in sight. All this could be avoided if the testator hired an attorney to assist with writing the Will. There is no form, no internet document, and no water cooler advice that can replace the skill and knowledge of an experienced attorney in avoiding contest. While there are some issues you can’t avoid, you can draft and execute a Will in such a manner as to deter fights once you are gone. An ounce of prevention could save tens of thousands of dollars.

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

The post Signing a Will is Important appeared first on Moak & Moak, P.C. -Attorneys At Law.

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 mind set, 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 mind set 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. 

The post How to Avoid a Contested Probate appeared first on Moak & Moak, P.C. -Attorneys At Law.