Estate Planning

Should You Consider Avoiding Probate?

Published on: May 22, 2023 | By David W. Miller

In the past, our blog has focused on the probate process and the many different implications for decedents, family, and friends. As we have emphasized, the probate process is complex, and it involves many actors as well as a detailed procedure that can take anywhere from a couple of months to a couple of years to play out.

When getting to know our clients and their individual needs, we often end up recommending that people try to avoid the probate process altogether – that is, we encourage our clients to think about how to organize their assets and debts in a way that makes them exempt from having to be reviewed by a probate court at all. Because it is so common for a person’s estate to go through probate, it is also important to understand why avoiding probate might be worth considering.

Reasons to Consider Bypassing Probate

First of all, the probate process happens through the probate courts, so everything that goes on becomes part of the public record. If your estate or your family dynamics involve information you would rather keep confidential, avoiding probate might be right for you.

Does Texas Have a Simplified Probate Process?

Published on: May 18, 2023 | By Thomas W. McCulloch

In Texas, the probate process can be overwhelming for beneficiaries and those involved in distributing a decedent’s estate. The good news, however, is that for those whose assets are below a certain amount, there is a simplified probate process available. This process is shorter and more efficient, but it still comes with several important procedural steps that cannot be avoided.

Who Qualifies for the Simplified Probate Process?

There are three basic requirements to qualify for the simplified probate process: the decedent must not have left behind a will, at least 30 days must have passed since the individual’s passing, and the value of all property belonging to the decedent must not exceed $75,000. This $75,000 amount does not include certain exempt property, which is more closely defined in the state statute laying out this procedure.

What Does the Simplified Probate Process Entail?

As the name suggests, this process is less costly and involved, but it still has certain important steps that must be taken. First, inheritors must fill out a form called a “small estate affidavit.” This form essentially tells the court what property and debts are involved in the decedent’s estate, and it lists the people that stand to benefit from the estate’s distribution.

Who Can Benefit from a Texas Special Needs Trust?

Published on: April 30, 2023 | By McCulloch & Miller, PLLC

As we have discussed previously in our blog, trusts can be powerful tools to protect and distribute assets for individuals in a variety of circumstances. One particular kind of trust is called the special needs trust, which is designed specifically for individuals with a disability. This type of trust distributes assets without eliminating its beneficiaries from public benefits, allowing them to receive the care they need while also maintaining a high quality of life even with their disability.

What Are the Kinds of Special Needs Trusts?

First, there is a “first-party trust,” which forms when a trust beneficiary receives some kind of asset, whether it be in the form of money, property, or stock. Normally, when a person’s assets rise to a certain level, that person is disqualified from public benefits that could help provide care for their disability. By using the first-party trust, however, the individual can put the funds into a trust and still receive public benefits. The downside of a first-party trust is that when the beneficiary dies, the state Medicaid agency gets whatever funds are left over at the time of death.

A second kind of special needs trust, the “third-party trust,” forms when someone wants to give a person with a disability a gift or inheritance. The funds in the third-party trust don’t actually belong to the individual with the disability – they are only being used for that person’s benefit. One important upside to the third-party trust is that the government does not end up taking the remainder of the funds when the beneficiary dies, since the funds never belonged to the beneficiary in the first place.

Estate Planning Considerations for Gun Owners

Published on: April 30, 2023 | By David W. Miller

One question we occasionally get from our clients is how to manage any guns that might be part of their estates as they plan for the future. If you own a gun, as long as it is registered and legal, there are steps you can take to make sure your beneficiaries can receive the firearm after your passing. There are, however, important complexities to keep in mind when thinking about what that process look like for your estate.

What is Involved in Passing on Guns and Firearms?

If you have any gun or firearm that you would like to pass to a loved one after your death, there are a few steps you need to take in the short-term future. First and foremost, you must think about who exactly you would like to be your gun’s beneficiary. The beneficiary must be legally entitled to gun ownership in terms of their age, criminal history, and citizenship status. It is always safest to also leave a secondary beneficiary, in case something happens where the primary beneficiary is no longer able to accept the gun.

Secondly, it is important to think about the executor of your estate, or the person responsible for distributing the estate’s assets. That person must be able to legally possess the firearm – in certain circumstances, this means having a federal firearms license. Choosing an estate executor is an important decision, and it is important that you trust your executor will have your best interests in mind.

Preparing to Meet with an Estate Planning or Probate Lawyer

Published on: April 24, 2023 | By McCulloch & Miller, PLLC

At McCulloch & Miller, many of the clients we sit down with are meeting with an estate planning attorney for the first time. If you are looking to meet with an estate planning or probate attorney to discuss your long-term needs and don’t quite know what to expect, this guide will help you anticipate your first meeting as well as the process ahead.

Importantly, the estate planning attorney will likely start by setting up an initial meeting with you to understand your goals and provide you with options for how to achieve them. Before you have this initial meeting, it can be helpful to think about what, if any, preparation you could do beforehand.

Typically, when you call an estate planning attorney and set up a meeting, the attorney will send you a basic questionnaire for you to fill out before that meeting. The more information you can fill out on this questionnaire, the better, since it will save you time in the meeting itself if your attorney is already familiar with your family and financial information.

So You’ve Been Named as an Executor or Trustee, Now What?

Published on: April 24, 2023 | By McCulloch & Miller, PLLC

Being chosen as an executor or trustee can be a big responsibility, and it is not one that you should take lightly. If someone you know has asked you to serve either as an executor or trustee, that person believes that you will fulfill your duties in a trustworthy manner, consistent with their wishes. There are important takeaways that you should note if you have found yourself in one of these positions; but, as always, the best thing you can do to fully understand your role is to speak with an experienced, dependable estate planning attorney.

An executor is someone appointed to carry out a decedent’s will. A trustee, on the other hand, is appointed when the decedent has organized their assets in the form of a trust. The trustee has ultimate control over the administration of the trust, but he or she has a duty to follow the decedent’s instructions on how exactly to administer the decedent’s property.

The first thing you should do as an executor or trustee is read the documents left by the decedent, whether those documents come in the form of a will or a trust. The decedent might have left co-executors or co-trustees, for example, or might have written specific instructions about what should happen to the assets in the short-term future. There might be time limits on when these assets need to be distributed, and it is important not to delay the initial review of the will or trust.

Texas Estate Planning: The Limitations of a Will

Published on: April 11, 2023 | By Thomas W. McCulloch

The will is the most well-known tool in estate planning, and it is often clients’ first choice for how to make sure their assets are transferred to loved ones after their death. The will can be useful in that it allows individuals to provide detailed instructions for their beneficiaries, and clients are generally grateful to have the opportunity to leave a thoughtful, specific document that coordinates the distribution of their assets for the ones they leave behind.

It is imperative to recognize, however, that wills do have disadvantages, and it is important to explore the limitations of wills alongside their benefits. Of note, anyone that wants to contest a will has exactly two years to do so, or else the will becomes unalterable. When a person dies, their will is submitted to probate, which means the court takes charge of the process of distributing their assets according to their wishes. From the day the will is submitted to probate, any potential challenger to a will has exactly two years to file with the court and contest that will’s validity.

The second obvious disadvantage to a will is that it requires the decedent’s property to go through the probate process. At times, this process can be long, drawn out, and contentious. Courts are charged with interpreting the terms of each person’s will, and there is no guarantee that the court will distribute assets exactly as the decedent intended if there is even one ambiguous phrase in the will.

The Revocable Living Trust: What You Need to Know

Published on: April 11, 2023 | By David W. Miller

Unfortunately, the law around estate planning can be complex and technical in a way that makes it difficult to sort through. Fortunately, though, the law provides for a diverse array of options for those undergoing the estate planning process. Many of our clients come to us, for example, asking us to help them create a thoughtfully written will. It is important to note that wills are not the only option for those looking to make long-term plans. Another tool, the trust, comes in the form of a revocable living trust, which can be beneficial for those looking to both use their assets now and securely transfer them after their death.

What is a Revocable Living Trust?

When done correctly, creating a trust allows individuals to forgo the probate process and pass assets directly to their beneficiaries after they die. If the trust is revocable, the individual maintains the right to suspend the trust at any time, taking back the assets that are hers or his in order to use them in the short-term future.

As we have discussed elsewhere in our blog, the probate process can be long, drawn out, and public. Creating a trust, however, allows for a secure and private transfer of assets upon the designator’s death. By forming a trust, designating a trustee, and naming beneficiaries, individuals can make sure their assets will pass on seamlessly to those they care about.

Decedent’s Wife Defends Claim to Texas Property in Long-Standing Estate Dispute

Published on: March 31, 2023 | By David W. Miller

In a recent case before a court of appeals in Texas, the widow of a property owner had to defend her claim to the property that her husband left her in his will. At issue in the case was how to interpret the wills of both the decedent and the decedent’s mother; the decedent’s sons argued the documents made clear that the land belonged to them, while the widow argued that the land was clearly her property. Ultimately, the court of appeals agreed with the decedent’s widow that the property rightfully belonged to her, but the litigation took twelve years from beginning to end.

Facts of the Case

The defendant was the third wife of a man who passed away in 2010. Two years before his death, the man wrote a will that left all of his property to his wife if she survived him. Two of the man’s sons from a previous marriage, however, took issue with this provision after their father died. They claimed that 277 of the acres actually belonged to them – one large piece of property had originally been their grandmother’s, and their grandmother’s estate documents did not make clear whether the land should go to their father’s children or his wife after his death.

The sons initiated this litigation in December 2010. They argued the land qualified as something called a “life estate with a remainder interest”, which means that they were due to inherit the land after their father’s death. The man’s wife, however, argued that the land was actually something called a “fee simple interest”, which means the land should go directly to her as the designee in her husband’s will.

Significant Other Fights for Loved One’s Assets in Recent Texas Estate Planning Case

Published on: March 15, 2023 | By David W. Miller

Significant Other Fights for Loved One’s Assets in Recent Texas Estate Planning Case

In a recent case before an appeals court in Texas, the plaintiff sued a local firefighters’ relief fund, hoping to receive compensation after her loved one passed away. The plaintiff originally asked a trial court to rule that she was entitled to survivor’s benefits after the death of her significant other, who had worked for years as a firefighter. Ultimately, the trial court refused to hear her claim, and she appealed. The court of appeals reversed this decision and gave the plaintiff another shot at having her case be heard.

Facts of the Case

According to the opinion, the plaintiff suffered the death of her significant other, who was entitled to a pension from a firefighters’ relief fund while he was alive. After his death, those funds went to his estate. In her lawsuit, the plaintiff argued that while she was not officially married to her significant other before he died, they were informally married, and she was entitled to some of the funds placed in the estate.

To succeed in her claim, the plaintiff had to prove both that she and her partner were indeed informally married and that this marriage entitled her to money from the relief fund. Because the plaintiff and her significant other had not created an in-depth plan that would automatically distribute his assets to her after his death, the plaintiff proceeded with the lawsuit in hopes of receiving the funds she thought she deserved.