Blogs from November, 2021

There are social and emotional benefits of charitable giving and there are also potential financial benefits to these types of gifts. Your estate plan can include these types of gifts both during your life and upon your death. In many instances, charitable donations have potential tax advantages. A knowledgeable attorney can assist you in determining how to plan for charity in such a way to maximize the benefit to charity, your family, and you.

For example, gifting to charity now may allow you to deduct cash contributions in 2021 up to 100% of your adjusted gross income for cash distributions to qualifying public charities (this used to be a 60% limit previously). To make sure gifts maximize your tax benefit, it is important that your donations are given to a recognized 501(c)(3) charity or recognized foundation, that you keep proper records, and if you are gifting anything other than cash that you understand how the value of your gift will be treated by the IRS.

Depending upon your specific situation and potential need for long-term tax planning, more complex charitable planning is appropriate and may include using one of several types of trusts that exist to facilitate charitable giving and maximize tax benefits.

For example:

• Charitable Remainder Unitrusts (CRUTs).
  • This arrangement allows a person to receive an income tax deduction the year they contribute to their CRUT; the person contributing to the CRUT can set up a variable income stream that pays them back for life; when the creator of this trust dies, the remaining assets go to the charities named in the trust tax free;
• Charitable Lead Annuity Trusts (CLATs)
  • The charitable beneficiary in this arrangement receives a fixed amount during the term specified in the trust; the person contributing to the CLAT names non-charitable beneficiaries to get the remaining assets at their death; when the creator of the trust dies, the remaining assets distribute back to the non-charitable beneficiaries;
• Charitable Remainder Annuity Trusts (CRATs)
  • Similar to a CRUT, except the assets distributed to the charity are fixed instead of variable; the person contributing to the CRAT receives an income tax deduction; when the creator of the CRAT dies, the charity receives the remaining assets;
• Charitable Lead Unitrusts (CLUTs)
  • Similar to a CLAT, except the assets distributed to the charitable beneficiary are variable instead of fixed and must be distributed annually.

Charitable planning is important! Don’t forget to include charitable considerations into your estate planning. As we look to the future and weigh POTENTIAL tax law changes, it is important to remember that, currently, there are strategies that exist to minimize negative impacts. Crain & Wooley stays abreast of all law proposals and is constantly monitoring ways in which we can lessen the potential impact for our clients.

Have questions? Ready to improve your charitable giving plan? Contact Crain & Wooley.

The loss of a loved one is a devastating time for family and friends. Although it is a time to grieve, a person close to the deceased will be responsible for making legal and financial arrangements, such as probate. Probate is a court process in which a deceased person’s property is passed to the beneficiaries listed in their will. But who is responsible for managing the probate process after a loved one’s death? Our Dallas-Fort Worth probate attorneys break it down for you below.

Who Is Responsible for Starting the Probate Process?

The person named as executor in the deceased’s will is responsible for, with the assistance of an attorney, filing an application for probate with court as soon as possible. After the application filing, the court will need to authenticate the will and confirm that it is valid. The court will request what is called a “prove-up hearing” to establish validity of the will.

Who Will Take Charge of the Probate Process?

Once the will is authenticated, the judge will appoint the “executor” or “administrator” to oversee the entire probate process and settle the estate. In most cases, the deceased person lists who they want their executor to be.

What If There Isn’t a Will?

If there isn’t a will, then the person died intestate. Dying without a will or legal documents to tell us what you intended to happen after you pass away is dying intestate. It is important to note that when a loved one passes away without a will, everything doesn’t automatically go to the surviving spouse or closest living relative. Loved ones will need to go to probate court to determine who the beneficiaries will be.

During probate, the court may require loved ones to go through heirship proceedings. During this process, a court appointed attorney will need to verify the deceased’s spouse and children. The attorney will also conduct an investigation to determine if there are other potential heirs and who should receive assets. Dying intestate can leave loved ones in a difficult situation that could be avoided with a will.

Learn more about dying intestate on our radio show here.

What Is the Executor In Charge Of?

The executor, with the assistance of their probate attorney, will be responsible for the following:

• Locating the deceased's assets
• Determining the value of the assets
• Notifying creditors of the person’s death and paying off debts
• Distributing the estate
• Filing the final tax return and more.

The probate process can be long and complicated, so an experienced attorney can help you get through every step in the most effective and efficient way possible. In fact, Texas courts typically require an executor to be represented by an attorney in probate because an executor cannot represent themselves or the interests of the beneficiaries and creditors. Texas law only allows a licensed attorney to represent the interests of others. Learn more about this in our blog post here.

Have questions about the probate process? Contact our Dallas-Fort Worth probate attorneys today at (972) 945-1610">(972) 945-1610 to schedule a consultation!

There are so many different types of trusts available that it can be hard to decide which option is best for you. The trust you choose should help you achieve your estate planning goals while protecting your assets and loved ones. Our team at Crain & Wooley has the answers you need to make the right choice.

If you need help preparing your trust, contact our Dallas-Fort Worth estate planning attorneys today at (972) 945-1610 to schedule a consultation!

Revocable Trusts

A revocable trust is a trust that can be changed or voided for any reason, at any time, as long as the grantor is still living and deemed mentally competent. The grantor is the individual whose assets are put into the trust / the person who created the trust. The grantor may also be referred to as the settlor, trust maker, or trustor.

Irrevocable Trusts

Unlike a revocable trust, an irrevocable trust cannot be changed without all of the beneficiaries consenting first. Since irrevocable trusts can't be modified, it may seem that they are never a good idea, but they can be beneficial in certain instances. It is best to speak with an experienced estate planning attorney to determine if an irrevocable trust is right for your unique circumstances.

Asset Protection Trusts

Asset protection trusts are another way to protect your assets from creditors. This is the most common way individuals protect assets when they are concerned about judgments or any other threats against their estate.

Charitable Trusts

A charitable trust can be created to benefit a specific charitable organization. This is considered an irrevocable trust that offers some tax benefits. When setting up a charitable trust, you would appoint an organization to be the trustee.

Insurance Trusts

An insurance trust is another form of an irrevocable trust. It can be established with only an insurance policy as an asset. This is a great way to avoid estate tax on any money that comes out of a policy when you pass away. It’s also an efficient way to ensure that your estate will be passed onto your beneficiaries.

Special Needs Trusts

Special needs trusts are created to benefit a loved one with special needs that keeps them from earning a living / maintaining full-time employment. Creating a special needs trust is a great way to provide financial support without jeopardizing any eligibility needed for government aid, such as Social Security Income or Medicaid.

Blind Trust

A blind trust is a form of a living trust where grantors and beneficiaries have little to no prior knowledge about any of the assets within the trust. This is a great option for those who anticipate conflicts of interest. You would ultimately have full discretion over all the assets and distribution.

Which Trust Is Right for Me?

Trusts have many benefits, such as avoiding probate, the reduction of taxes, and more. However, choosing which trust is right for you is not an easy task. Thankfully, you don’t have to go through the estate planning process alone. Our team at Crain & Wooley has the skills, knowledge, and experience needed to help you with your unique situation. We are committed to transparency, integrity, and compassion in all of the estate planning cases we handle for clients, so you can rest assured that your case is in capable hands.

Contact us today at (972) 945-1610 to schedule a consultation!