Blogs from March, 2021

If you have children that your spouse doesn’t know about, don’t assume that just because they were adopted by another family that they are no longer an heir of your estate.

TRUE STORY: In late 2020, a surviving spouse came to the office after her husband had died seeking advice on how to handle her deceased husband’s estate. Her husband died with no estate plan in place, and the surviving wife said they had no children together, and he had no children before they were married. The deceased husband had a house and some other assets that he owned as part of his 50% community property and the wife thought that she would have full ownership of the assets as the surviving spouse. To have her deceased husband’s name removed from the assets and her name listed as 100% owner, documents needed to be filed with the court to begin the probate process, which included a required process called a determination of heirship because there was no Last Will and Testament or Living Trust.

During the heirship investigation for this probate case, the court appointed attorney found out that years before the marriage to the surviving spouse that the husband had a son who was given up for adoption soon after birth. That changed everything.

Did you know that an adopted child inherits from their adoptive parents and their natural parents (read section 201.054 of the Texas Estates Code and 161.206 of the Texas Family Code)? The adopted child can inherit from their biological parents unless a court order states otherwise.

STORY CONCLUSION: So, what happened in our client’s case? After the surviving child and surviving spouse were formally recognized in the heirship proceedings, the court applied rules of law stating that in the instance where a person dies with no legal documents directing asset disbursement at death that the deceased spouse’s one-half interest in the community estate passes to the deceased spouse’s separate children. That means that the surviving spouse kept her half of the community property and the other half of the community property (the husband’s half) went to his son who had been given up for adoption. The surviving spouse in this case lost her deceased husband’s 50% interest in the community property to the previously unknown son of her deceased husband.

This is not a result that the deceased husband would have likely intended and certainly was not what the surviving spouse expected. Dying with no legal instructions (dying intestate) often has unexpected and unintended results. These situations can be avoided by intentionally planning and executing important estate documents such as a Last Will and Testament or a Living Trust.

To be blunt, you don’t know what you don’t know which is why working with a qualified estate planning attorney is of paramount importance. Make sure that this does not happen to you – contact us today, to speak with a professional.

It’s common for people to disinherit family members for various reasons. When consulting with clients who want to specifically exclude someone from their estate plan, they ask, “should I give them $1?”

My answer is always an emphatic, “absolutely not.”

I’m not 100% sure when or how this $1 trend started, but I’ve encountered it often. I assume the theory behind it is “if I specifically name them and give them $1, they’ll know that I didn’t forget about them, and I want them to know that I don’t want them to have more than $1.” While I understand the strong psychological need to express these sentiments, the legal aspects of leaving a $1 gift have the potential to negatively impact everyone involved with the estate.

If you give someone $1 in a will, they are required to be a part of the probate process.

Remember, a will must complete the probate process before an inheritance, of any size, is given to beneficiaries. Everyone who is given a bequest in a will must be notified about the probate process. 

• Best case scenario: all beneficiaries receive notice of application for probate and a copy of the will, but sign waivers that basically say, “I don’t need to get official notices via certified mail regarding the probate process. It’s fine if the executor just emails or calls me to let me know what’s going on, and I have no disagreements with the contents of the will.” 

• Worst case scenario: all beneficiaries receive notice of application for probate and a copy of the will, but one or all fail to sign a waiver of agreement and choose to get actively involved and contest any or all parts of the probate process. In short, a $1 gift in a will is a written invitation (via certified mail) to cause problems.

Additionally, in some cases, specifically giving someone a $1 gift could add fuel to the fire if mental capacity, validity, or undue influence are factors in the probate. A $1 gift provision could be seen as being out of character for the person who wrote the will, and therefore presented as evidence that could invalidate the will. Even if the contest isn’t successful, the extra time and expense could be incredibly detrimental to everyone involved. If an extra $50,000 (or worse) in attorney and court fees are spent because the $1 gift causes a contest, those fees come out of the estate first and the other beneficiaries get less.

“So what’s the solution?” It’s actually very simple: In the introduction of your will, we can simply add a statement that says, “It is my intention to make no provisions in this will for my son, John Doe, Jr. or his descendants.” That’s it. 

Then the rest of the will can state provisions for how the other people will inherit their gifts. (Sometimes, like in the movie Knives Out which I wrote about previously, the person writing the will can choose to write a separate letter explaining why someone was disinherited.)

Where there is family – there is drama. Carin & Wooley has seen and heard just about every family situation you can imagine. We specialize in limiting family drama and helping you craft an intentional legacy. Have a question about a family situation? Contact us today. 

Unfortunately, people often surmise that Crain & Wooley staff exaggerate or, in the very least, stretch the truth regarding the current probate process, who must go through the probate process and how that process interacts with Last Wills and Testaments. Occasionally, a story hits the national news that drives home how important it is to plan for death IN ADVANCE and how important it is to work with a qualified estate planning professional to complete your will or trust.

Sadly, Larry King recently passed away and the wrap up of his estate is featured in national newspapers for all the wrong reasons. Larry King took it upon himself create a handwritten will that is now under contest. The only people who will get rich from this probate case will be the attorneys. 

A handwritten will is probably the worst idea that exists outside of doing nothing at all and leaving everything up to chance. Each state has its own set of rules and regulations that impact the validity of wills. Don’t try to outsmart the law by taking a short cut like a handwritten will. Short cuts only lead to long court cases. Working hand-in-hand with a highly regarding estate planning attorney is your best course of action in order to protect family peace and leave an intentional legacy – whether that legacy is five dollars or five million dollars. 

No matter how much you are worth or how little you have, if you have loved ones that you care about work with a professional estate planning attorney. In other words, be better than Larry. To stop procrastination and take the steps to protect your family and your legacy, make your complimentary consultation with one of our attorneys today. 

Avoiding probate and court supervision while wrapping up an estate is a point of emphasis in almost every estate plan I provide. When I explain that using a Revocable Living Trust will allow them to put a Trustee of their choosing in place to handle their estate wrap up, and that person will not need court permission or oversight, it often leads to questions about what boundaries a Successor Trustee really has. 

Who Has the Power to Make Changes to a Trust?

A Revocable Living Trust is initially put in place by the “Settlor” or the person or persons whose assets will be handled through the Trust. A Settlor has the power to change the terms of the trust as long as they are alive and able. Most commonly, the Settlor is the initial Trustee. A Trustee has the power to manage Trust assets and to conduct business on behalf of the Trust. When a Revocable Living Trust is revoked, altered, amended, or modified, it is done so by the Settlor. Even if the Settlor and the Trustee are initially the same person or persons, the changes are made by that person acting in their capacity as Settlor. This means that a Trustee never really changes a Trust.

Can a Successor Trustee Change a Trust?

If there is more than one Settlor, a Trust can be changed by a surviving settlor if those terms are clearly stated when creating the trust. When all Settlors have died, the Trust becomes Irrevocable; meaning the terms of the Trust cannot be changed. A Successor Trustee has a fiduciary duty to carry out the instructions in the Trust without change. A fiduciary duty is enforced by the law, and if conflict arises, a Successor Trustee can be held to task by any beneficiary harmed by Trustee misconduct.

Do I Have to Designate a Family Member as Trustee?

If clients have concerns about appointing a loved one as Trustee, there is always an option to hire a professional Trustee. Most banks and financial advising institutions offer Trustee services for certain assets. The attorneys at Crain & Wooley can also serve as your Successor Trustee to make certain your estate is managed and distributed properly. 

If an estate needs flexible management, options can be added to the terms of a Trust that allow for a “Trust Protector”, which can be one person or a small committee, to make necessary changes due to a variety of occurrences after a Trust becomes irrevocable. The Trust Protector is not necessary in all plans but is a good idea if there are generational assets being held by the Trust for long periods of time. 

In closing, a Revocable Living Trust cannot be changed or altered by your Successor Trustee. A Trustee is bound by a fiduciary duty to adhere to the instructions in the Trust. Revocable Living Trust are very customizable and allow for almost any issue to be planned for in detail. 

If you have more questions about what a Successor Trustee can or can’t do, contact us today!