Blogs from 2019

In 2019, Crain & Wooley has served more than 400 individuals and families with best-in-class estate planning services. Part of our commitment to our clients and our community is to share relevant and applicable education that will help our neighbors plan in advance and keep estate plans up to date with life’s changing circumstances. 

Here are a few of our most popular articles:

• I Move Around A Lot. What Type of Estate Plan Is Best For Me?
• How Do I Update My Trust When I Move?
• What’s The Hold Up? The Probate Process 

We are dedicated to empowering you with practical information so you and your loved ones have peace of mind knowing we are here for you!

Call us or email us with your questions!

This year’s legislative session brought some changes to the Estates Code. Not all of these updates apply to each of our clients; however, sharing the most up-to-date information will allow you to be ready should a friend or loved one experience a unique situation. 

Number of Disinterested Witnesses in an Heirship (Sec. 202.151)

This change requires two disinterested and credible witnesses in an heirship proceeding unless the court is satisfied that only one can be found. This section does not require that any of the witnesses personally knew the decedent. A genealogist who never met the decedent could be a disinterested witness who proves up the heirship solely by documentation found by the witness. 

Note: As a 2019 Crain & Wooley client, your family and loved ones will not be subject to heirship proceedings because you have a valid will or trust in place. However, for those individuals who die without an estate plan, heirship proceedings must happen prior to the disbursement of assets.  

Ability to Delegate Appointment of Administrator (Secs. 254.006, 256.051, 301.051, 301.052, and 304.001)

New Sec. 254.006 allows a testator to grant to a named executor or other person designated by name, office, or function the authority to name one or more persons to serve as administrator. By default, the designee(s) would act only if all named successors were unable or unwilling to act, but the will could provide otherwise (i.e., the person with the designation power could be given the ability to override the default order of succession). Unless the will or designation provides otherwise, the designee would have the same rights, powers, and duties of any named executor. The designee would still need to offer the normal proof to the court that the designee is qualified to act, not disqualified, etc.

Note: As a 2019 Crain & Wooley client, you have support to change your estate plan should those named no longer be able or willing to fulfill administrative functions. If you need to change an executor, trustee or other agent, please contact our office as soon as possible.

Waiver of Bond Where Will Doesn’t Waive Bond (Sec. 401.005)

This change allows the distributees (beneficiaries) to waive bond for an executor or administrator where the will doesn’t automatically waive it. 

Note: As a 2019 Crain & Wooley client, your documents include language either allowing or disallowing waiver of bond per your wishes. This 2019 law change allows for beneficiaries to waive bond if the estate plan does not include language to this effect.

Recording of Non-English Foreign Wills (Sec. 503.002)

When an authenticated copy of a foreign will and its probate is recorded in the deed records, if any portion is not in English, it must be accompanied by an English translation, the accuracy of which is sworn to.

Online Notice by Publication (Secs. 51.054, 51.103, 1051.054, & 1051.153; C.P. & R. Code Sec. 17.032).

In addition to publication in a newspaper of general circulation, notice will be required to be posted on a public information website created and maintained by the Office of Court Administration. Exceptions to newspaper publications are provided based on inability to afford payment, the newspaper’s publication cost (> $200 each week, adjusted for inflation), or lack of a circulated newspaper in the county of publication. The specific amendments to Estates Code Secs. 51.054 and 1051.054 provide that the date of service is the earlier of the date published in the newspaper or posted on the public information website. Proof of service will consist of the publisher’s affidavit and an affidavit obtained from the OCA. The option for posting a notice at the courthouse where there is not a newspaper is repealed.

Note: If you have a trust and have funded it properly, your estate will forgo the probate process which includes online and traditional notice by publications.

Medical Power of Attorney (MPOA)

The Medical Power of Attorney is required to be in the state-mandated format effective January 1, 2018. There were attempts this last congressional session to change this so there would be no required language, but those attempts failed. The current requirements were successfully defended by the Texas Medical Association and the Texas Hospital Association. Using standard language does simplify medical professionals’ ability to interpret people’s legal wishes.

Note: As a 2019 Crain & Wooley client, your MPOA is written in the correct format. We would urge to you encourage your friends and family to update their MPOA to the required format as soon as possible.

Do you have questions about how the legislative changes may impact you and your family? Contact Crain & Wooley today.

Have you noticed that life keeps getting more and more complicated? Things that we thought we knew and understood seem to not be as simple as they once were. An area of law that is often misunderstood in this manner is community property.

In Texas, community property means that each person owns a certain percentage of assets. The most common analogy is a married couple: spouse #1 owns 50% of assets acquired after marriage and spouse # 2 owns the remaining 50%. Simple enough, right? Well, that is where the simplicity ends. Complexity and misunderstanding arise when talking about distributing community property assets in cases of death (let alone with disability – which is a whole other topic). 

A common misunderstanding surrounds the distribution of title assets like real estate. A normal, yet mistaken, thought process goes something like this: “I am married, and we are both residents of Texas. Since Texas is a community property state when I die all my property will automatically transfer to my spouse.” On face value, this sounds right. However, it is simply an incorrect assumption and the truth surrounding community property surprises many people – often during times of personal loss and tragedy. 

Bottom line: upon the death of one partner, the surviving spouse will be able to keep his or her 50% of assets. The decedent’s 50% of assets transfer according to legal documents such as wills, trusts, and contracts. When a spouse dies without a will, trust or contract in place, he or she dies intestate (without instructions) making it difficult and expensive for the survivor to sell, refinance, or distribute title assets.

If you own a home, have CDs, mineral interests…ANYTHING WITH A TITLE, it is imperative that your assets be included in a legally binding will, trust or contract. Please, don’t let urban legends and general misunderstanding about community property stop you from creating a comprehensive estate plan.

Have questions about community property contact us today.

The process of getting a divorce touches literally every part of your life – including your estate plan. How would you feel if after your divorce was over and you thought everything had been taken care of, your ex-spouse was still involved with the disbursement of your assets simply because you forgot to update your estate documents? 

Getting divorced is difficult and involves a lot of change in your life. If you want to ensure that an ex-spouse cannot be involved in your life in cases of disability or death, you would be well-advised to create or update legal documents during or as soon after your divorce as possible. 

What documents should be created or updated to reflect your divorce? Consider the following at a minimum:

• New Powers of Attorney and Medical Powers of Attorney (who can sign your name and who can talk to your physician);
• New Declarations of Guardian in Advance;
• If you have minor children, update your Guardian Declarations for Minor Children;
• Update beneficiary designations of all kinds;
• New Last Will and Testament
• New Trust(s)

Despite current law attempting to address the situation where spouses divorce yet fail to update estate documents before death or disability, the enforcement of these legal provisions can be extremely costly, time-consuming and still may not result in your actual wishes being carried out.

Crain and Wooley has assisted in numerous cases in which a spouse was married to one person, named them as beneficiary in multiple documents, divorced spouse number 1 and remarried a second person. However, at death and/or disability the estate was tied up in contested proceedings between current spouses and ex-spouses due to documents never being updating to reflect the updated familial structure and current wishes. 

Start this new chapter of your life off right by updating or creating your estate plan. Contact Crain & Wooley today.

When a person creates a trust, it is important for them to change ownership of assets out of their individual name and into the name of a trust. For example, a home originally owned by John Doe would be changed to show that John Doe, Trustee of the John Doe Revocable Trust, owns the property. The process of changing ownership to a trust sometimes brings up the question, “won’t a revocable trust change my tax status?” Short answer? No. 

When thinking about creating a trust, many Texans become concerned that they might lose their 65 and older exemption or lose their homestead exemption; and others wonder if they might be taxed at a higher tax bracket for their trust assets because they have heard of some type of “trust tax rate”. 

The good news is that when a person creates a trust that they are in charge of (like a revocable living trust) that holds assets that were theirs to begin with, the IRS will disregard their trust for tax purposes. The IRS calls this a Grantor Trust. The IRS defines a Grantor Trust as follows:

 “Grantor trust” is a term used in the Internal Revenue Code to describe any trust over which the grantor or other owner retains the power to control or direct the trust’s income or assets. If a grantor retains certain powers over or benefits in a trust, the income of the trust will be taxed to the grantor, rather than to the trust. (Examples, the power to decide who receives income, the power to vote or to direct the vote of the stock held by the trust or to control the investment of the trust funds, the power to revoke the trust, etc.) All “revocable trusts” are by definition grantor trusts. An “irrevocable trust” can be treated as a grantor trust if any of the grantor trust definitions contained in Internal Code §§ 671, 673, 674, 675, 676, or 677 are met. If a trust is a grantor trust, then the grantor is treated as the owner of the assets, the trust is disregarded as a separate tax entity, and all income is taxed to the grantor.

Even more good news for Texas citizens — assets in this type of trust also retain their property tax exemptions because a revocable trust is a qualifying trust as defined by the Texas Tax Code and the Texas Property Code. 

Bottom line: You can create a revocable living trust while maintaining your real property exemptions and without negatively affecting your tax situation.

Working with estate planning experts like Crain & Wooley makes sure that all of your goals are accomplished, and all tax laws are followed. Contact us with any questions!

You want to help others. You like the idea of leaving a legacy. You want to make sure that your hard-earned assets are utilized with your charitable goals in mind. You want to make sure that nothing is wasted in bureaucratic nonsense.

Just saying, “I give $25,000 to St. Jude Children’s Research Hospital” will more than likely be sufficient to get a donation where it needs to go. However, estate planning attorneys and charitable giving directors at your favorite charity can help plan so that your wishes are coordinated with their needs in the most efficient way possible.

I’ve been working closely with the charitable giving team at the University of North Texas on behalf of a client who wanted to leave a very specific kind of scholarship gift. Our clients wanted to leave money to fund a scholarship to benefit a very narrow class of students. However, after working with the client and UNT, we were able to put a reference in the client’s trust to a Memorandum of Understanding (“MOU”).

I talked to UNT about what my clients’ goals were and why they wanted to establish a scholarship as part of their trust plan. I found out that there was already a well-established program focused on my clients’ interests. They told me that sometimes, when a donor has a very specific interest and wants to leave a scholarship for a very specific kind of student, that specific student can’t be located and the school has to waste resources trying to figure out the next closest thing. Conversely, when donors leave an overly broad gift, the school has to waste resources trying to figure out which department the gift should go to. I worked with UNT to create an MOU for my clients that would leave a gift to that already-established program, but with a preference for it going to a very specific scholarship, if a student that fits the criteria can be found. 

The other great thing about creating a MOU is that it can be broadly referenced in the trust, so that the specifics of the gift can be changed without having to amend the entire trust: “I give 10% of the residue of my estate to The Humane Society of North Texas according to our Memorandum of Understanding.” That way, if you originally wanted your gift to support a grant of adoption fees but later want to change it to specifically fund medical care for animals, you can easily do it by just changing the MOU rather than amending your trust.

There are other ways of planning for giving charitable gifts that an estate planner can discuss with you to maximize your impact and minimize tax consequences.

Contact us today so that we can help facilitate your charitable giving.

Probate, estate, and property law are very state-specific. While all American probate, estate, and property law is deeply rooted in old, feudal, English law, there are idiosyncrasies from state-to-state that could have a big impact on your estate planning. This begs the question, what type of estate plan is best for a person or family who anticipates moving?

Almost any estate planning document you write must be created under the laws in which you are domiciled at the time you create it. A will eventually has to go to a probate court to be proved as valid in front of a judge, so a will is generally written with a specific state’s probate court requirements in mind. A will written in a different state could very well be valid in a state other than the one in which it was written. However, it might not have all the requirements required in the new state’s probate court, and not having all the state’s requirements could lengthen the probate process. And a lengthy probate process could be an expensive probate process . . .

A trust, however, is more like a contract than a property transfer, believe it or not. A revocable living trust is created to give instructions on what should happen to your stuff after you die—just like a will—but a well-written trust is also created to avoid having to go to court. If you transfer all of your titled assets into a trust while you’re still alive, then a court doesn’t have to be involved in the transfer of property. If you don’t have to go to court, then you don’t have to worry about that state’s probate laws!

If you’ve recently moved to Texas and aren’t sure if your current will or trust should be updated, make an appointment with one of our attorneys so that we can review it and advise you on what updates, if any, should be made. 

First and foremost, congratulations! If someone named you as a trustee or successor trustee, that person must have thought that you are smart, trustworthy, and organized. Being chosen as a trustee is a pretty big compliment.

But, just like Uncle Ben told Spiderman: “With great power comes great responsibility.” (I think Voltaire said it first, but that’s neither here nor there.)

Your first step as a trustee is to get your hands on the trust. The trust will give specific instructions on what your powers are, what limitations you have, and who the beneficiaries are. A well-written trust is a set of rules for what is given to whom and how. 

A lot of trusts, but not all, will instruct you to liquidate and combine all assets of the person who made the trust (the “Settlor”).  The super important part here is that you should keep everything in a separate bank account for the trust and absolutely do not mix trust monies in with your own personal bank accounts, even if you have a separate ledger for it. The trust assets need their own account. Sometimes, you might have to create multiple trust accounts if, for example, you have to retain part of the trust money for someone who is a minor.

If a beneficiary of the trust is over 18 years old, but the trust says that he or she cannot have the money until a later age, you have to be able to give an accounting of the trust assets within a reasonable time after that person asks for it. You might also have to give an accounting to the Settlor if you’re acting as trustee because the Settlor is incapacitated.

If you get a little (or a lot) overwhelmed by any of this, most trusts not only allow but will pay for you to get some professional help from a lawyer, accountant, or investment advisor. If you’ve been named as a trustee or successor trustee and you’re feeling a little overwhelmed right now, give us a call or set up an online appointment. 

Death avoidance permeates our culture. More than 50% of our neighbors don’t have an estate plan in place detailing distribution of assets let alone any written funeral and/or burial instructions. We, as a culture, hate to admit that we are getting older and do NOT want to talk about what to do when we pass away. This avoidance leaves a heavy burden on the shoulders of those who survive us. 

I have seen many grieving loved ones be overwhelmed with the practicalities of planning a memorial service or funeral. Part of Crain & Wooley’s comprehensive estate planning approach is to provide you with the tools needed to communicate very detailed instructions on how to celebrate your life. Leaving these guideposts allows your friends and family to share memories and comfort one another rather than bickering about where to hold the service and what flowers to purchase (if any!).

Because so few people leave instructions, there is a growing sector of the economy focusing on end-of-life events. The event planning industry is stepping in to fill the gap left by those who pass away without an estate plan in place. Learn from professional planners by reading Life lessons From an End-of-Life Event Planner.

Partnering with a skilled estate planning attorney allows you to not only craft a plan that distributes assets but shares your desires on how to be remembered.