Houston Estate Planning Law Blog

HOW CAN A LIVING TRUST HELP YOU AND YOUR ESTATE?

Most people in Texas who are currently looking into estate planning are more than likely informed when it comes to wills and what should be included in these important legal documents. But what they may not know about is the use of a living trust is a way of distributing assets to beneficiaries without all the probate associated with wills.

Let’s take a look at a couple trusts that can help you disperse your assets in accordance with your exact wishes. First, we’ll start with living trusts. These types of trusts become effective during your lifetime and can be revoked at anytime. Living trusts are a good choice for people who want to distribute their assets to beneficiaries without losing a majority of it to taxes and probate fees.

There may come a time when you may want to establish a trust but want to make sure you have complete control over what happens to the assets in the trust. Unlike living trusts which are managed by a trustee, a revocable trust allows a grantor the ability to have complete control over the trust, even making changes to it if necessary. They also have the ability to be revoked in the case that you no longer want to give assets to the intended beneficiaries. It’s important to note however that money placed in a revocable trust is subject to estate taxes and the assets within the trust can be reached by creditors.

In some states, the use of trusts can be far more efficient than wills not only because they avoid probate, but because they can be set up in such a manner that the grantor can control the assets in the exact manner in which they choose. Also, in many states, probated wills become public record. This can especially be a problem for people who want to make sure that the specifics of their assets stays private.

Because there are so many different types of trusts, it will be important to speak with a skilled attorney before making any definite decisions about your assets.

Source: The New Jersey On-Line, “Biz Brain: The benefits of a living trust,” Karin Price Mueller from The Star-Ledger, Feb. 18, 2013

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HOW TO USE ESTATE PLANNING TO HELP A CHILD WITH A MEDICAL HISTORY

Planning for your own death is never an easy task to undertake; but when you have an ailing child, this process can be so much more difficult to bear. Any parent in Texas would want to see their child taken care of after they have passed. This is especially true for parents who have a child with a medical history or perhaps is completely disabled. Thinking about this during the estate planning process could make a huge difference when it comes to taking care of your children after you’re gone.

Most estate planning experts will agree that the best way to ensure that a beneficiary receives the maximum amount given to them is through the use of a trust. Especially in the case of children with medical histories, parents will want to make sure they are getting the necessary funds to pay medical expenses.

Experts warn however, that certain provisions will need to be present in a trust to make sure that the money in the trust is not sought after by creditors in the event the beneficiary falls into financial distress.

For people whose children may already be disabled and receiving Social Security Disability benefits or Supplemental Security Income, they would be well advised to speak to an estate planning expert on ways of making sure that the assets in the trust do not impact the amount of money received through these benefits.

It’s important to point out, of course, that it’s not just parents of ailing children who should think about the specifics of their estate, but the mass population as well. Remember, you can leave your assets to whomever you wish, not just your children;, but it’s important to make sure that the right stipulations are being applied to each share of your assets in order to maximize the amount received by the beneficiary.

Source: The MetroWest Daily News, “Examining estate planning options,” Christine Keane, Oct. 20, 2012

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RECLUSIVE MAN LEAVES MILLIONS TO ORGANIZATIONS IN HIS WILL

Anyone who has read our blog knows that making plans for your estate after you pass is an important decision that can never be considered too early. But what seems to stop many people here in Texas from continuing forward with their estate planning stems from the fact that they do not have any family members to share their wealth with.

Such was the case for an elderly man in Washington, but instead of halting his estate plans entirely, he decided that he was going to give back to a community that had given him so much over the years.

When the president and chief executive of the group Family Matters-an organization that helps under-privileged people in the community-got the phone call from the elderly man’s attorney she says she cried; not just because the man had passed away at the age of 100, but because the generous donation left to the organization in his will was more than twice the charity’s annual budget in a given year. She tells reporters that it took her some time to compose herself before returning to the conversation with the trust officer.

In total, the 100-year-old man had left $43 million to three separate endowments, $28 million of which was promised to Family Matters. The remaining $15 million was divided evenly among the National Symphony Orchestra and the Washington National Opera.

The man’s 62-year-old cousin, who helped oversee his affairs over the course of the last few years, says that it’s no surprise to her that he left money to them in his will. He had no family of his own-many of them already gone-and mostly kept to himself because of his considerable shyness. When he did go out, he spent much of his time attending theater, music and ballet performances.

“It’s almost as if he did appreciate the great fortune of his life and knew that with a stroke of a pen in his estate plan he could do something wonderful for people less fortunate,” his cousin explains adding that his secrecy surrounding his donations until after he passed was fitting for a man who kept such a considerably low profile all his life.

Source: The Washington Post, “Philanthropist Richard A. Herman leaves fortune to D.C. charity, symphony, opera,” Annie Gowen, Feb. 5, 2013

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HOUSTON WOMAN USES POWER OF ATTORNEY FOR EVIL, NOT GOOD

A 76-year-old Houston woman is trying to put her finances back in order after a 24-year-old Texas woman not only stole her driver’s license and social security card but used them to gain power of attorney over her bank accounts, getting away with nearly $30,000 of the elderly woman’s money.

In mid September, the 76-year-old woman went in to her local bank only to be told that someone had withdrawn $29,800 from her bank account. When the woman asked who, the bank gave her the name of a woman she did not know and explained that she had obtained power of attorney over her bank account. It was at this point that the woman contacted police.

Although investigators believe that a 24-year-old Texas woman is to blame for the theft, police have not been able to take her into custody as she remains at large at this time.

As Texas’ elderly community continues to rise, stories like this continue to emphasize the importance of talking with your family members about your estate before tragedies like this happen. And although power of attorney was used in the worst possible way in this scenario, in most cases, power of attorney can be incredibly helpful when distributing an ailing family member’s estate.

Many real estate planning experts point out that it’s always a good idea to not only have a power of attorney in mind but to let other people, including your financial institutions, know who that person is. And although rare, you may be able to offer yourself a safety net against the difficulties associated with identity theft such as this.

Source: KHOU News, “Houston woman accused of stealing money using power of attorney documents,” Feb. 4, 2013

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