Articles Posted in Family

When parents have a home that they would like to one day pass to their children, they may worry about the logistics of this process. It is safe to say that creating an estate plan is the best way to ensure children will one way receive the assets and property that the parents wish to give them. However, within estate planning, there are multiple ways to do this—whether including it in a will for the children to receive upon the individual’s passing or gifting the funds from selling the property. Below are various options on how to pass property onto children—along with the various legal and tax implications of each choice.

Giving a House to Heirs in a Will

The most common way that individuals will leave property to family, especially children, is to bequeath the assets in a will. In doing this, the parents would write in the will that the children are to be given the house after the death of the last parent. One benefit of including property, like a house, in the will is that children will be given the property on a stepped-up basis. This means the property’s value is adjusted to its fair market value and reduces the capital gains tax owed by the beneficiary. However, the beneficiary may still be liable for estate taxes, unlike if the property is gifted in a trust.

Gifting the Property to Children in a Trust

Some parents would rather be able to give their children more money, rather than property after they pass away. The best way to do this is to create a revocable trust rather than leaving the property to the children in the will. In this case, after the parents die, the property is sold, and the funds from the sale are given to the children. For example, the parents would create a revocable trust and name a trustee. Once the parents passed away, the trustee would then sell the property and then the funds from the sale would be given to the listed beneficiaries.

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When Texans think about passing on their assets to others, many wish to keep assets in their family through their i. While they may assume this will automatically occur—and there is no need to create a will or estate plan—this is not necessarily the case. Instead, there are specific actions that individuals should take to ensure their money and property are handed down to the people they actually want to receive it. Otherwise, a probate court judge will have the final decision in who is given the deceased’s assets. Below are some tips and options for Texans who wish to better control where their assets go and ensure they are utilized responsibly.

Drafting a Will

When most people first think about estate planning, they envision drafting a will. And this is one of the most essential and basic estate planning methods, as drafting a will allows individuals to dictate how their assets will be divided after they pass away. However, in Texas, if someone does not have a will in place when they die, their estate will be divided in probate court. There, a judge will decide how the assets are split up—generally, the individual’s closest kin will receive a majority of the assets regardless of the deceased’s feelings toward them. Because of this, it is important to draft a will so Texans can leave their money to their family—or others—according to their actual wishes.

Creating a Trust

Other individuals may hope to keep their assets in their family but worry about how the beneficiaries will utilize the funds. For people like this, it may be wise to create a trust. In setting up a trust, the individual appoints a trustee, who administers the funds according to the purposes specified in the document. Not only does this allow the individual creating the trust to develop terms, but the trustee will also then make sure heirs follow the stipulations if they want to receive the funds.

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With Thanksgiving and other holidays fast approaching, it is the time that families come together to celebrate and reflect on what they are grateful for. And while gathered around the Thanksgiving dinner table, family members catch up, discuss hot-button topics, and sometimes have difficult conversations. Especially when aging loved ones attend these holiday functions, it is an important time to talk with them about the future, including their wants and needs as they relate to estate planning. Although these may be tough conversations to initiate, it is essential to plan ahead and avoid uncertainty and stress in the future. Below are some of the conversations people should consider having with their aging loved ones this holiday season.

1. Money and Living Situation

As people get older, it becomes harder to live alone and complete everyday tasks without the assistance of others. Because of this, individuals may want to talk with elderly loved ones about their long-term living situation preferences. Some people prefer moving to a long-term care facility, while others may prefer to stay with family—and either have a loved one take care of them or hire a home health aide to come into the house.

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.

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