Articles Posted in Family

There is a common phrase that says, “the days are long but the years are short.” While this phrase was not created with estate planning in mind, the sentiment runs true: people talk about drafting an estate plan but rarely do so over time. However, it is never too early to start a Houston estate plan, especially with the unexpected occurrences that happen in life. And without an estate plan—or by making common estate planning mistakes—families can become dysfunctional and loved ones may show hostility to one another. Below are two common estate planning mistakes that must be avoided to avoid family infighting after a person’s death.

Not Having a Will in Place

Not having a will in place at the time of a person’s death is the worst estate planning mistake that can be made. Families will face dramatic consequences and uncertainty if a loved one dies without a will. A will is the place to express a person’s wishes for how their assets will be handled after their death—without this document, it is called dying “intestate.” This means Texas law—as interpreted by a probate court judge—will determine who receives the person’s assets, regardless of their personal relationship. This may lead to family fighting where one person, who may be genetically but not personally close to the deceased, receives an inheritance and others do not. All of these issues could be resolved by drafting a will.

Not Appointing an Executor of the Estate Plan

While a will specifies a person’s wishes, an executor of the estate plan is necessary to enact these wishes. An executor handles most of the administrative tasks required in an estate plan: they distribute the estate’s assets to the specified beneficiaries, pay any debts the deceased may have, and file the final tax returns. However, if a will does not list an executor, it will lead to a much more complicated and emotionally fraught process. Beneficiaries will not receive their assets in a timely manner and loved ones will have to go to court to see who a judge names the executor. While a spouse or other close loved one is generally named the executor in these situations, this entire process can be avoided if an executor is named in the estate plan.

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The time after the loss of a loved one is emotional and stressful. Families are grieving the loss while also dealing with funeral arrangements and estate plans. While careful trust and estate planning can mitigate many common disputes that occur, there are still some pitfalls that cause families to fight over the deceased’s will. Below are some situations that sometimes lead to conflict with estate plans—along with ways to resolve the situations themselves.

Disagreements Among Siblings

While estate plans often provide clear and concise instructions for loved ones, this is not always the case. Parents with multiple children will sometimes include provisions in their will requiring the siblings to make decisions together—rather than detailing the wishes themselves. Although in some respects this may seem like a good idea—having children come together after the loss of a parent—these provisions often lead to discontent and more arguments. Children will fight about the aspects of the will: either about what assets they would like to receive or disagree what they are each entitled to.

More and more Texas couples are choosing to cohabitate without getting married. For older couples, this arrangement is often intended to protect assets for their children. Couples should be aware that cohabitation can affect estate planning in unexpected ways, however. With the right trusts and estate planning lawyer, cohabitating couples can navigate these pitfalls with ease.

The Major Difference in Inheritance

A key difference between a cohabitating and married couple in terms of estate planning is the effect of one partner’s death on inheritance. In the case of a married couple, a surviving spouse automatically maintains an interest in her deceased spouse’s estate, even if the decedent did not leave a will. In the case of an unmarried, cohabitating couple, however, a surviving partner lacks any default legal interest in their deceased partner’s estate. In other words, the surviving partner will not inherit any part of the estate unless a will is in place designating the survivor as a beneficiary.

Congratulations on your new arrival! When planning for a first child, there are a few tasks that cannot be put off. One of these tasks that is often overlooked is estate planning. In the event of the unthinkable, a well-thought-out plan for your assets can help ensure that your children will always be cared for.

An effective estate plan will answer a variety of important questions. At a minimum, a properly structured plan will address the distribution of assets and care of children in the event that neither parent is alive. Experienced Houston estate planning attorneys address these issues in careful detail, working with families to identify their unique needs and create tailored solutions.

Flexibility in Estate Planning for Many Needs

It can often be tricky enough to raise children; however, for those raising children and taking care of their own aging parents, the workload is doubled. The “sandwich generation” is a term that refers to those who are simultaneously caring for their own children as well as their elderly parents. While the stress may seem insurmountable for those juggling both of these tasks, there are ways to plan ahead and manage these challenges through the use of an effective Houston estate plan.

Compile Emergency Information about Aging Parents

Even before it seems necessary, it is important for people to have emergency information about one’s parents readily available. Having the following information easily accessible can save people from frantic moments after an unforeseen medical emergency has occurred: copies of insurance and prescription cards, the contact information of primary care physicians, basic medical history, and a current list of medications and dosage. Additionally, it is critical to have an elderly parent’s financial information on hand, such as contact information for banks and a list of financial accounts, in case of incapacitation or other emergencies. Check out our wonderful Family Document Checklist Tool.

When a loved one passes away, it is often a very tragic time for the family. However, it can be even more upsetting when the person dies without a will, and there is a family dispute over the contents of the estate. While having a thorough Houston estate plan can minimize the risk of disputes, there is still the possibility that issues will arise. Below are some common estate problems and solutions.

Conflicts with the Estate Executor

A family dispute with an estate’s executor or administrator is a regular estate planning issue. When an executor is appointed to manage the estate after a person passes away, there can be a conflict if family members disagree with the executor’s choices. These disputes include if the family believes the executor was poorly chosen or if the executor is engaged in the mismanagement of the estate,  including possible fraud. In these cases, it may be necessary to have the executor removed and replaced. Because it may be difficult to find an executor that family members are satisfied with, it is often useful to find a neutral outsider who does not stand to inherit any of the estate property.

Many young people do not think much about estate planning. But having children makes estate planning an important consideration for any family. Young families with children should consider taking certain steps when going through Houston estate planning.

Basic Estate Planning Needs for Young Families

First, families should sit down with an attorney to write a will. Writing a will ensures that a parent decides who property and assets will go to in the event of the parent’s death. Writing a will is particularly important for parents because they need to name a guardian for their children. The guardian is the person who would care for the child or children if both parents were unable to care for their children. In the absence of a named guardian in a will, a court would generally choose a guardian for the children. Having a named guardian ensures that that person is appointed as guardian.

Houston families with adopted children have to keep certain concerns in mind while estate planning. If a child is not formally and legally adopted, that child generally will not receive the same treatment in the event of a parent’s death. Inheritance and property will not usually pass on to that child in the same way that they would to a biological child. Adoptions can take a long time to become final. Until an adoption has been finalized, the child is not considered a child in the same way that a biological child is for estate purposes.

For example, a stepchild who was raised by a stepparent may be considered the same as a natural child within the family, but if the stepchild was not legally adopted by the stepparent, the child will not be treated in the same way under Texas estate law. In the event of the stepparent’s death, Texas estate law would not treat that child the same as a biological child. This means that if the stepparent died without a will, generally, the stepchild would not inherit any of the stepparent’s assets. However, there are some circumstances under Texas law in which a child can inherit from a stepparent and where there was an agreement to adopt the child.

If a parent legally adopts a child, under the Texas Estates Code, that child will be treated in the same way as a natural child. In the event of a legal adoption, generally, the child’s biological parents’ parental rights will be terminated. In some cases, that child will lose their right to inherit by default as a child from their biological parents. However, in Texas, an adopted child normally can also inherit from the child’s natural parents.

There are many reasons people may want to avoid creating or revising their Houston estate plan as they age. Some may say they do not have the time or money to sit down with an attorney. Others may think that it is unnecessary. However, often, it boils down to a desire to avoid the uncomfortable conversations that must be had when it comes to engaging in the estate planning process. Most people do not want to think about death, let alone talk about it with their loved ones. With that in mind, it makes sense they would want to avoid discussing their estate plan. So how can one approach this conversation and gently persuade their loved one to create or update an old estate plan?

Tips to start the conversation about estate planning:

  • First, it is important to show understanding and empathy. As discussed above, these are conversations no one enjoys having. One should show an understanding of why their loved one may want to avoid the topic. One way to do that is by having patience. Try not to be too overbearing or demanding. It may take more than one conversation to convince a loved one to plan for the unavoidable sooner rather than later.

1.26.20Some people think once the children are all grown up, with spouses and children of their own, that they don’t need life insurance. However, it can play a valuable role in protecting the family and transferring wealth.

With estate tax exclusions at levels that make them a non-issue for most Americans, the practice of purchasing second-to-die life insurance policies to prepare for estate tax costs has faded.

However, IRAs, 401(k)s, and other accounts are still 100% taxable to the individuals, spouses and their children. The stretch IRA options still exist, but they may go away, as Congress may limit stretch IRAs to a maximum of 10 years.

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