Revocable Living

In Texas, the appointment of a guardian is a legal process undertaken when an individual is unable to manage their personal or financial affairs due to age, illness, or disability. However, with foresight and proper planning, one can often avoid the need for guardianship, maintaining control and privacy in personal matters.

Here are steps you can take to prevent the necessity of a guardianship:

1. Create a Durable Power of Attorney:

A Durable Power of Attorney (DPOA) allows you to appoint an agent to manage your financial affairs if you become incapacitated. This legal document can be tailored to your specific needs, granting as much or as little power as you see fit.

2. Establish a Medical Power of Attorney:

Similar to a DPOA, a Medical Power of Attorney (MPOA) allows you to designate an agent to make healthcare decisions on your behalf should you become unable to do so.

3. Draft a Directive to Physicians:

A Directive to Physicians, commonly referred to as a Living Will, outlines your preferences for medical treatment in scenarios where you might be unable to communicate your wishes.

4. Set Up a Revocable Living Trust:

A Revocable Living Trust is a flexible estate planning tool that allows you to manage your assets during your lifetime and provides instructions for their distribution upon your death or incapacity. Unlike a will, a living trust operates during your lifetime, allowing for the management of your assets should you become incapacitated.

5. Designate a HIPAA Authorization:

By signing a Health Insurance Portability and Accountability Act (HIPAA) authorization, you ensure that your chosen individuals can access your medical information, facilitating informed decision-making on your behalf.

6. Engage in Family Discussions:

Open communication with family members and loved ones about your wishes and the plans you have put in place is crucial. It helps prevent confusion and ensures everyone is on the same page should a crisis occur.

7. Consult with an Experienced Attorney:

Navigating the legal landscape of estate planning and incapacity planning can be complex. Consulting with an attorney experienced in these matters is invaluable for ensuring that your plans are comprehensive and legally sound.

Proactive planning is key to maintaining autonomy and ensuring your wishes are respected, regardless of what the future holds. Our law firm specializes in crafting personalized estate and incapacity planning solutions. If you have concerns about guardianship or wish to explore preventive measures, we invite you to contact our office. Our seasoned team is here to provide the guidance and peace of mind you need as you plan for the future.

When planning for your estate, trusts can be a useful tool to ensure your assets are distributed as you wish. Two common types of trusts are irrevocable trusts and revocable trusts. But what exactly is the difference between the two, and which one is the best fit for your needs?

Irrevocable Trusts

An irrevocable trust is a type of trust that cannot be changed or revoked once it is established. This means that once assets are put into the trust, they are no longer considered your property. Irrevocable trusts are often used for estate planning purposes as they can offer protection from creditors, reduce estate taxes, and ensure that assets are distributed as intended.

Revocable Trusts

A revocable trust, on the other hand, can be changed or revoked at any time during the grantor's lifetime. This type of trust is often used for more flexibility in estate planning and allows for changes to be made as circumstances change. Assets in a revocable trust are still considered the grantor's property and are subject to estate taxes.

Which One is Right for You?

Deciding between an irrevocable and revocable trust ultimately depends on your individual circumstances and goals. If you want to protect your assets from creditors, reduce estate taxes, and ensure that your assets are distributed as intended, an irrevocable trust may be the best option. However, if you want flexibility and the ability to make changes as your circumstances change, a revocable trust may be the better choice.

It is important to consult with an experienced estate planning attorney to determine which type of trust is best for your specific situation. They can help you navigate the complexities of estate planning and ensure that your assets are distributed according to your wishes.

In Conclusion

Bottom line, understanding the difference between irrevocable and revocable trusts is essential when planning for your estate. By working with a qualified estate planning attorney, you can determine which type of trust is best for your needs and ensure that your assets are protected and distributed as intended.

If you need assistance with establishing a trust or have questions about estate planning, contact Crain & Wooley today. Our experienced attorneys can provide guidance and support throughout the estate planning process, including irrevocable trusts, revocable trusts, and more. 

Estate planning and probate are two terms that often come up when discussing the transfer of assets after someone's death. While both are essential aspects of managing an estate, they are not the same. In fact, the choices you make in estate planning can significantly impact the time and money spent during the probate process. This article aims to shed light on why investing in proper estate planning now can save your heirs both time and money later.

The Cost of Dying Intestate in Texas

Dying intestate, or without a will, can be a costly affair. In Texas, intestate probate involves additional steps such as heirship determination, attorneys ad litem, and numerous probate court proceedings. These steps not only prolong the process but also add to the expenses.

The Will: A Step in the Right Direction

Having a well-written Last Will and Testament can reduce the time and expense involved in probate court. However, it's essential to note that in Texas, a will has no legal effect until it is probated, as per Texas Estates Code § 256.001. Therefore, while a will can streamline the probate process, it doesn't eliminate the need for it.

Trust Planning: A Tool for Avoiding Probate

For those looking to avoid the probate process entirely, trust planning is an excellent option. Assets placed in a trust are not subject to probate, providing a smooth transition of assets to the beneficiaries.

Pay Now or Pay Later: The Choice is Yours

The essence of estate planning is that you pay upfront—both in time and money—so that your heirs don't have to pay later. Whether it's the cost of drafting a will or setting up a trust, these are investments that can save your family from the financial and emotional toll of a lengthy probate process, disagreements, taxes and other expenses, and more.

Legal Requirements in Texas

In Texas, courts require an attorney for probate because an executor is not representing themselves. This means you can't represent yourself pro se, as you're not truly representing yourself. For example, Dallas County's probate pro se policy states that only a licensed attorney may represent anyone other than themselves in a judicial proceeding. Similarly, Denton County's policy also mandates that individuals must act through legal counsel in probate and guardianship cases.

By taking the right steps now, you can save your family time and money in the future. Whether it's drafting a will, setting up a trust, or understanding the legal requirements, each step you take today can reduce the cost (in terms of time and money) for your heirs in the future.

For more information on how to navigate the complexities of estate planning and probate in Texas, contact a qualified attorney at Crain & Wooley.

After creating a living trust for clients, we have an educational meeting to ensure that assets are properly integrated with the trust. We also talk about how their living trust operates for the rest of their lives.

I usually share this analogy: “Think of being trustees of your trust like being CEOs of your own little company.” Trustees buy and sell in the name of the trust, not in their own names. Trustees open new accounts in the name of the trust, not in their own names. (NOTE: a typical revocable living trust is NOT a business. Your tax rate does not increase; you pay taxes as you have previously, and you do not need an EIN.)

After establishing your living trust, make these slight adjustments when organizing your assets:

• Real Estate: we probably helped you retitle your current house into the name of your trust, but what happens if you sell that house? The title company will know that the house is owned by a trust and will likely just ask to see a copy of the trust to confirm that you have the authority to sell property. Then you’ll simply sign “Jane Doe, Trustee of the Doe Living Trust” in the paperwork. The important thing, though, is that you need to buy your next house in the name of the trust. Again, you’ll show your trust to the title company to show authority to buy property in the name of the trust and will sign your name “Jane Doe, Trustee of the Doe Living Trust”. To gain the full benefits of a living trust, real estate needs to be titled in the name of the trust.

• Bank Accounts: you might choose to change banks for a variety of reasons. When opening a new bank account, open it in the name of your trust. Yes, your checking account will be “owned” by your trust, but you can still pay bills, get cash, and receive deposits like before the trust existed. It might seem scary, but you’re not losing control of your money because you’re the trustee in charge of the trust.

• Vehicles: title your new car in the name of the trust. While vehicles are, arguably, the easiest asset to transfer after death, you can save a few steps for your successor trustee if you’ll ask the car dealership to put the title in the name of the trust. The trust will own the car, but you control the trust as Trustee.

As life changes happen, take a few moments to review your assets and coordinate them with your trust. A funded trust is a trust that works!

Contact us today!

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.