Blogs from 2018

Scam alert! Land recordings are public record. When you buy property or transfer it, the deed is recorded with the county clerk. You are able to get the recorded deeds for your property from the county clerk for a few dollars. However, sometimes homeowners receive a letter from a company that charges a fee to get your deed for you. (They usually ask for about $85.) If you look carefully, it will usually say that they are not actually a government organization, but the private company will deceptively make it look like you owe money to the government. It will usually say that you you’re not required to pay the money (somewhere in small print), but they will try to make it look like a bill from the county.

Our trust packages include the transfer of your real property (houses and/or land) into your trust. We will create the document that properly transfers your property into your trust, ensure that you properly execute it, and then file it in the appropriate county clerk’s records. Once it is recorded with the county clerk, we will send you a copy of the deed. There is no need to pay these shady companies to do it for you. Unfortunately, these companies aren’t acting “illegally”. They’re just shady. Have questions? Contact us!

Texas takes its constitution very seriously including safeguarding the residential homestead exemption. In fact, the Texas Tax Code implies that as long as you hold your property, you have the right to be there, and that no person or government can take it from you. With that in mind, realize that even when it comes to property taxes, the state is lenient on who qualifies for the homestead exemption.

Q: Will I lose my homestead exemption if I transfer my primary residence into a RLT?

A: No. Texas Tax Code mirrors the IRS language when stating that homestead exemptions are transferable into a “Qualifying Trust”. Each Warranty Deed created by Crain & Wooley is in compliance with the Texas Tax Code and even references the appropriate section to avoid any complications.

Sec. 11.13. RESIDENCE HOMESTEAD

(j)  For purposes of this section:

(1)  “Residence homestead” means a structure (including a mobile home) or a separately secured and occupied portion of a structure (together with the land, not to exceed 20 acres, and improvements used in the residential occupancy of the structure, if the structure and the land and improvements have identical ownership) that:

(A)  is owned by one or more individuals, either directly or through a beneficial interest in a qualifying trust;

(B)  is designed or adapted for human residence;

(C)  is used as a residence; and

As you can see, utilizing a RLT as an estate planning tool does not impact your ability to avail yourself of Texas’ homestead exemption. In fact, a Revocable Living Trust is one of the most flexible AND comprehensive estate planning options available. Learn more about Revocable Living Trusts by attending one of Crain & Wooley’s educational seminars. 

If a loved one dies and does not have an organized, comprehensive estate plan in place, you may not know whether or not your loved one had life insurance. So what can you do if a loved one dies and you are unsure about their life insurance policy?

If you think a life insurance policy was in effect when your loved one died but you can’t find the policy or the name of the company, you can use a policy locator service like the one provided by MIB. MIB can only search companies listed in its database for policies written in the last 11 years, but the $75 charge per search may be worth it if the result is that you find an otherwise lost policy. For older policies, or those not in their database, it is possible you will never know whether a policy existed or who it was with.

If you want to ensure that your loved ones can avoid a situation where they are unsure of your wishes and whether you have insurance or not, the better approach is to have a comprehensive estate plan in place that addresses all of your wishes and organizes your assets, including your life insurance, into one easy-to-understand plan accessible to those who survive you.

For more information on how Crain & Wooley can help you to have a comprehensive plan in place, schedule your free, 1-hour consult today!

Crain & Wooley does not endorse MIB. MIB is cited as an example of one life insurance locator provider.

Intellectual property refers to ideas, creations, inventions, and artistic works. You may have protected your works with a copyright, patent, or trademark, but have you considered what happens to those works when you die? How do you leave your works to those that you intend to have them?

There are multiple ways that your intellectual property can transfer to others:

• Don’t leave any instructions. Leaving no instructions at all means that you will die intestate. This means you did not prepare any legal documents with direction as to who should receive your intellectual property at your death. In this instance, the court will decide who gets legal title to your works through a process called intestate succession. The court often divides your property differently than you would have had you left your own instructions as to your wishes (for example, a surviving spouse will not automatically inherit all of your assets under intestate succession).
• Write a Last Will and Testament. You can write a Last Will and Testament and your intellectual property will be transferred through the court process called Probate. It is important that your will be written with the correct language required to gift intellectual property to the specific people that you want to receive those assets. If written incorrectly, your intellectual property may become part of your residuary estate and could be divided among your beneficiaries generally instead of according to your specific wishes.
• Transfer your works while alive. You can sell or gift your intellectual property while you are living. To successfully transfer your works, you must properly document the assignment, grant, or transfer using the required legal language. You should also consider recording the transfer with the appropriate government office (e.g., the United States Copyright Office) to establish a public record of the contents and the transfer of the property. It is important to consider the tax consequences of gifting or selling assets while you are living versus transferring them in death by other means.
• Utilize Trust Planning. You can assign your intellectual property to a trust that allows you to retain control of the assets while you are living and that specifies who will receive the benefit and ownership of your works after you die. The trust can avoid the need for court involvement in the future because the provisions of the trust agreement are already in place during your lifetime that provide the authority and direction that the courts would otherwise have to facilitate had you left no instructions at all or had you used a Last Will and Testament instead.

Would you like to talk about your specific intellectual property and learn how best to protect it? Schedule an appointment with Crain & Wooley.

On June 26, 2015, the U.S. Supreme Court’s decision in Obergefell v. Hodges confirmed that same-sex couples have the same right to marry as opposite-sex couples. So that means that same-sex couples’ estates will be treated the same by the courts, right?

Well, unfortunately, it’s not that simple yet.

Courts have not explicitly ruled on whether or not same-sex civil unions (or what some people think of as “common law marriages”) will be retroactive for the purposes of classifying community and separate property in the marital estate.

What does that mean?

Let’s say Abby and Brandy have been in a relationship since 1990 and moved in together at that time. In 1995, they had a ceremony in front of their friends and family in which they exchanged rings and committed to stay together forever. From then on, they introduce each other as “my wife” and told everyone that they will get married as soon as the law allowed. In 1997, they bought a house together in Dallas and opened a checking account in both of their names. Then Abby bought a new car in her name only, and Brandy installed a pool in their back yard that she financed in her name only and paid for with her salary.

Fast forward to June 27, 2015, when Abby and Brandy are finally, legally married at the courthouse . . .

If either Abby or Brandy dies without an estate plan in place, what would happen with the house, the checking account balance, the car, and the improvements on the house?

No one knows, for sure. If the law decides that their “common law marriage” can be retroactive (for the sake of classifying their assets), all of those things could be considered community property to be distributed to the surviving spouse. If their marriage isn’t retroactive back to 1995, the courts will be very unpredictable as to how they will handle the division of assets. Of course, this potential distribution of assets to the surviving spouse supposes no familial disagreements or arguments necessitating additional court hearings.

What should same-sex couples do?

The best thing for same-sex couples to do is work with an experienced attorney to put their exact wishes in writing ensuring specific instructions are carried out. It is also recommended that any other “non-traditional” families (like opposite-sex couples who have been together for a long time but never married, married couples with blended families including children from previous relationships, or any other family that might need special instructions in lieu of the common law rules of distribution) work with an attorney to protect their legacy.

In addition to crafting an estate plan that will distribute your assets according to your requests, our total estate plan packages include power of attorney documents that will help avoid problems with other institutions that don’t recognize your partner’s authority to handle your financial and medical decisions.

Schedule a free, one-hour consultation today so that we can give you, your partner, and the family that you’ve built an equally solid plan for your future.

Many of us know someone who suffers with a form Dementia, the most common being Alzheimer’s Disease. Dementia in all its forms slowly rips independence away from those who suffer its ravages. While no amount of planning can eliminate the emotional pain encountered when a family member slips away, proper financial and legal planning can assist caregivers with the daily practicalities of life thereby alleviating a portion of stress and anxiety.

Caring for a person with dementia can last years, and there are few outside resources to help pay for this kind of care.

• Health insurance does not cover assisted living or nursing home facilities, or help with activities of daily living.
• Medicare covers some in-home health care and a limited number of days of skilled nursing home care, but not long-term care.
• Medicaid, which does cover long-term care, has very strict eligibility requirements; the person’s assets must be spent down to almost nothing to qualify.
• VA benefits for Aid & Attendance will help pay for some care, including assisted living and nursing home facilities, for veterans and their spouses who qualify.
• Those who have significant assets can pay as they go. Home equity and retirement savings can also be a source of funds.
• Long-term care insurance may also be an option, but many people wait until they are not eligible or the cost is prohibitive.

However, for the most part, families are not prepared to pay these extraordinary costs, especially if they go on for years. As a result, family members are often required to provide the care for as long as possible.

What Can Be Done to Support the Patient and the Family?

1. PLAN NOW! Having options—additional caregivers, alternate sources of funds, respite care for the caregiver—can help relieve many stressors. In addition, there are many legal options to help families protect hard-earned assets from the rising costs of long term care and to access funds to help pay for that care.
2. Watch for early signs of dementia. The Alzheimer’s Association (www.alz.org) has prepared a list of signs and symptoms that can help individuals and family members recognize the beginnings of dementia.
3. Seek assistance. Find out what resources might be available. We can prepare necessary legal documents that help maximize income, retirement savings and long-time care insurance as well as apply for VA or Medicaid benefits.
4. Take good care of the caregiver. Caregivers need support and time off to take care of themselves. Arrange for relief from outside caregivers or other family members.

Waiting too long to plan for the need for long-term care, especially for dementia, can throw a family into confusion about what Mom or Dad would want, what options are available, what resources can help pay for care and who is best-suited to help provide hands-on care, if needed. Having the courage to discuss the possibility of incapacity and/or dementia before it happens can go a long way toward being prepared should that time come.

We help families who may need long term care by creating an asset protection plan that will provide peace of mind to all. If we can be of assistance, please contact us!

So, do you have to hire an attorney to navigate the probate court process in Texas? Most of the time, yes.

Texas courts usually require an executor to be represented by an attorney in a probate matter because an executor not only represents himself, but also the interests of beneficiaries and creditors. Texas law only allows a licensed attorney to represent the interests of others, therefore, preparing and filing pleadings in a probate matter without the assistance of counsel would constitute the unauthorized practice of law. Although courts allow limited exceptions to this rule, the result is that executors in Texas almost always have to hire an attorney to navigate the probate process.

The following is an example from the Denton County Probate Court’s Local Rules, explaining that the court does NOT allow individuals to represent themselves (also called “Pro Se”) in probate matters before the court:

Schedule your complimentary probate consultation with Justin or Jacob and get your probate questions answered.

Not only do I have some good news, but I have good news coming from our Texas Legislature! In 2017, our representatives chose to clarify the Texas Estates Code regarding power of attorney so that things are easier for both the agent acting with power of attorney and the person accepting the power of attorney (like banks or mortgage companies). House Bill 1974 was signed into law and there are 3 changes that you need to know about.

1. Previously used forms may or may not have had a section that revokes prior agent’s authority when a new power of attorney form is signed. A new section of the law says that you must expressly revoke previous powers of attorney. What does that mean? Let’s say, 10 years ago you gave power of attorney to your brother, Abe. Since then, you changed your mind and decided that you don’t want him to be able to act as your agent, and you signed a new form making your sister, Abby your agent. Abe might still have the power to act for you. Updating your powers of attorney will ensure that the appropriate agent is making decisions on your behalf.
2. There is specific language in the law that gives options for the types of powers that you can give—or specifically not to give—your agent. What does that mean? Let’s say that you want your sister, Abby to be able to change the beneficiaries of your estate. You can now do that more easily! If you want to make sure that your brother, Abe is not allowed to amend your trust, you can do that more easily as well.
3. The experts in Texas probate law meticulously went through the existing law and suggested changes to our legislature so that things would be clearer, more effective, and give better protections for all parties. They suggested language that needs to be in all power of attorney forms beginning September 1, 2017. What does that mean? Let’s say that you are incapacitated, and your sister Abby needs to go to your bank to handle some business for you, and she takes an old power of attorney form that you signed prior to 2017. Legally, the bank has the right to refuse to let Abby act for you if the paperwork is confusing and/or has a certain amount of time to check with their lawyers before denying or accepting her power. However, if you have the new form with all the correct information included, Abby is less likely to run into problems.

This new power of attorney form—as well as other disability forms designed to carry out your wishes—are included in our estate planning packages. Schedule an appointment today so that we can personalize your documents to effectively protect you and your loved ones.

If you have a trust in place, a pour over will is a necessary part of your estate plan. A pour over will directs that assets outside of your trust that are part of your estate should “pour over” into your trust when you die. A pour over will leaves the balance of a person’s estate to their trust and is a standard part of trust planning. Ideally, there should be no need for the will at death when a trust plan is in place because all of a person’s property should pass through their trust or by other contractual means. In fact, the point of many trust plans is to avoid transfers by will. However, if assets are forgotten or have not been made part of the trust during a person’s lifetime, a probate proceeding could be triggered unexpectedly due to that trust funding problem (or for other reasons). In the case that a probate proceeding is triggered, this type of will “pours” the assets that are outside of the trust into the trust.

Situations that could inadvertently lead to a probate include:

• Failure to re-title bank accounts and securities to the trust.
• Failure to re-title real estate to the trust.
• Creating new financial accounts after the trust is established in an individual capacity instead of as trustee.
• Purchasing new real estate after the trust is established and taking title in an individual capacity instead of as trustee.
• Forgetting to retitle real estate to the trustees after conducting a refinancing transaction.
• Funds becoming payable individually to a person with a revocable trust, such as an inheritance, but the person does not collect the funds before death.
• Property that cannot be held in trust or is intentionally not held in trust does not have proper beneficiary designations.

Since the pour over will is a safety-net in the event that there is a problem with trust funding, for example, the majority of legal language concerning a person’s assets who has a trust in place is contained in the trust instead of this type of will (the pour over will). The pour over will should be consistent with the trust it references and may go as far as stating that the specific terms of the trust apply even in an instance where the trust is no longer in force or in the event that the pour over will has to be probated.

This type of will typically names the same person who was designated as trustee of the trust as the executor of the pour over will while additionally mirroring the people named as alternates in the trust as alternate executors of the will as well (although common, this is not required). The reason this is common is because if the trustee of the trust is also the person named as the executor of the pour over will and the pour over will has to be used (in probate for example), then the same person will be the trustee of the trust and the executor of the will and will most easily and efficiently be able to distribute funds and assets to the revocable trust at the end of probate administration.

The pour over will is an important and necessary part of a comprehensive estate plan when using trusts in your planning. Working with an estate planning attorney with experience in trust-based planning will help to ensure that you have not only the proper trust program in place but also the necessary safeguards to ensure that you are protected in the event of unexpected circumstances.