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“Planning for the end of your life can be intimidating. When you are a farmer, your business is not only your livelihood and your passion, but, often, it is also intermingled with your family life. For that reason, estate planning — arranging for the management of your assets once you die — is especially important for aging farmers.”

The Bangor Daily News explains in its article “How farmers can start an estate plan” that we all know we’re going to die, but it’s not our favorite thing to talk about. However, it’s important to start these conversations.

The article helps aging farmers who want to get started with the estate planning process, by sharing some tips to clear up some of the confusion, eliminate questions in the process and motivate you to begin your estate planning journey.

Depending on the situation, the probate process can be a nightmare. For this reason, many believe probate should be avoided whenever possible. However, avoiding probate depends on the circumstances of each individual situation. While creating a Houston estate plan that avoids probate will be beneficial in most circumstances, there are certainly some situations where the level of planning required to avoid probate is unnecessary.

What is Probate?

Probate is the court-guided process through which a decedent’s property is distributed accordingly. Through this process, the court authenticates the decedent’s will, notifies potential heirs, accounts for the decedent’s property, and addresses tax obligations before estate property is distributed to beneficiaries. The court is also responsible for appointing an executor of the estate to oversee the process and protect the interests of the estate and its beneficiaries. In the case of an intestate estate (where the decedent dies without a will) probate serves the same functions, with the only difference being that property is ultimately distributed according to state intestacy laws.

For individuals of all ages and familial structures, it is important to have a comprehensive Houston estate plan for two reasons. First, it provides instructions regarding the distribution of someone’s hard-earned assets, ensuring that their property is distributed according to their desires. Second, an estate plan provides end-of-life instructions that can help ensure an individual’s last days can be spent peacefully. While an estate plans should be a priority for any individual or family, an estate plan is even more critical for those in long-term relationships with someone whom they are not married to.

For unmarried couples, if one partner dies without an estate plan the results can be disastrous. State law assumes and protects the interests of married partners by ensuring them part of the estate through communal property. Married partners also have the presumed right to make medical and other important decisions on behalf of their significant other. Unmarried couples on the other hand do not have the same sort of protection. If one partner dies or becomes incapacitated, the other partner can only inherit from their estate or make important decisions on their behalf if careful estate planning has not already taken place. Below is a list of estate planning tools that are useful for unmarried couples who want to protect and provide for one another.

1. Will

For families with children, creating a comprehensive Houston estate plan is critically important. The need for such planning is even more important for those with children who have special needs. As with all parents, proper planning is the only way to ensure that children will be properly cared for if their parents pass away prematurely. However, children with special needs may have very specific needs that must be met. If these needs are not addressed in their parents’ estate plan, they are less likely to be cared for should one or both parents pass away. Furthermore, based on the severity of the child’s disability, parents may need to plan for ways to meet such needs long into adulthood.

One of the most common estate planning tools for parents with special needs children are trusts. A trust is an arrangement where property is placed under the ownership and care of a trustee for the benefit of one or more beneficiaries. It is almost always a good idea for parents of a special needs child to provide for the creation of a trust naming that child as a beneficiary. However, the creation of a trust is not the only thing for parents to consider. Here are a few estate-planning considerations for parents interested in creating a trust for their child with special needs.

Choosing the Right Type of Trust

Traditionally, a Houston estate plan has primarily focused on the distribution of tangible property upon a person’s death. However, now that we are firmly in the digital age it is important for everyone to consider how digital assets should be addressed in an estate plan. Digital assets and information include just about anything that is primarily accessed through a digital platform. Examples include social media accounts, email accounts, photos and videos stored on a computer or in the cloud, online banking and investment accounts, and even cryptocurrency.

How do Digital Assets tie into your Estate Plan?

It is important to spell out how such assets and information should be treated within an estate plan. Those who do not have a will leave their loved ones and estate administrators with no access to them. This could result in the permanent loss of data and information stored on an electronic device. With all of the memories we capture and store using our phones, that could be the equivalent of losing years’ worth of family memories. Perhaps even more alarming is the prospect of losing access to financial accounts that are primarily accessed through online banking. If an estate plan is silent about such assets, loved ones may have to put up with the headache and added expense of getting a court order just to access a decedent’s digital accounts and information.

Social distancing requirements across the country have forced us to adapt quickly to new methods of executing what previously seemed like simple tasks. With the number of COVID-19 cases on the rise in Houston on a daily basis, more and more members of our community are opting for remote or online options when conducting their notary service needs. Because your personal and familial health and well being is a priority during this challenging time, the last thing anyone needs is a lengthy, complicated, and burdensome process when taking care of notary-related logistics. Yet, while now is a good time to work on a Houston estate plan, many estate planning documents require notarization services.

In Texas, information about using an online notary or becoming an online notary public is available through the Texas Secretary of State’s webpage. Online notary publics are public servants who are commissioned by the state as traditional notary publics but also have the authority to perform notarizations online using a two-way video or audio conference. To successfully get a Houston notary public to perform an online notarization of your files, the notary needs to be physically located within the state of Texas at the time of notarization, but the signing party or principal can be located anywhere.

Similar to typical in-person operations, Houston online notary publics are also required to maintain a secure electronic record of the documents notarized and ensure that there is proper credential analysis and identity proofing even with an online, socially distanced format. Records are kept by online notaries for five years from the date of the notarization of the documents and serve to protect you as the client. Additionally, notary publics are required to check the validity of government-issued identification and identity. With these extra security and safety checks in place, utilizing an online notary for your documents is as easy and safe as it was prior to social distancing measures were put in place.

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.

Preferred Partnership Freeze

It is no secret that a well-put-together Houston estate plan can save younger generations an enormous amount of money. However, few are aware of the rare opportunity for estate tax savings caused by the economic conditions surrounding COVID-19. By taking advantage of a Preferred Partnership Freeze (PPF), high net worth individuals can avoid costly estate taxes and continue to take full economic advantage of their assets. Individuals will want to act quickly to seize this opportunity, as this is hopefully a once-in-a-generation opportunity that may not be around for long.

The recent economic shutdown due to the COVID-19 pandemic has decreased the value of many assets, including closely held businesses, investment portfolios, and real estate properties. A Preferred Partnership Freeze allows individuals to freeze the current valuation of such assets, and recognize certain benefits down the road as a result. For assets expected to appreciate, future interests can be placed into a trust avoiding estate taxes on the increase in value. For depreciable assets such as rental real estate, individuals can take advantage of estate tax deferral as well as a tax-free step-up in basis, and increased depreciation and amortization.

When was the last time you reviewed your estate plan? Most people have not reviewed their estate plan since they put it together with the help of their attorney. Although it is relatively common, taking a set-it-and-forget-it approach to estate planning is risky business. As time passes, life circumstances change, as does the law regarding estates. For these reasons, it is essential to review an estate plan every three to five years. Below are a handful of common mistakes that can easily be caught and corrected by reviewing all estate planning documents.

Updating Your Fiduciaries

Knowing who is named as the executor of a will or as the trustee of a trust is crucial to making sure that an estate plan is properly carried out. Each fiduciary plays a critical role in the administration of an estate. Over time, relationships often change. People drift apart and may even fall completely out of touch. People also grow old and pass away. Thus, it is crucial to check in with an estate plan every so often to make sure the named individuals are still up to the task. Even if the fiduciary is still willing and able, you may find on further inspection that there is a better person for the job.

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