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Houston Estate Planning Law Blog

SO YOU WANT TO DISINHERIT SOMEONE FROM YOUR WILL…

When it comes to drafting your final will and testament, your current situation can have a significant impact on who you put in your will and what they receive after you pass away. A bitter argument between a sibling could turn into a spiteful disinheritance, which can leave a lasting impression on the entire family. But what does it mean to be disinherited and how will this effect the distribution of your estate after you die?

To disinherit someone means to specifically write or make changes to a will that prevent a person from inheriting something from said will. It’s important to remember though, that while you may be doing this out of spite, the wording used in your will can make a huge difference in the end. As many estate planning experts will tell you, even purposefully leaving someone’s name out of a will can be viewed as a mistake by a judge, allowing the person to inherit what you may not have wanted them to have.

While most people here in Texas, as well as across the country, think of disinheriting someone as a negative thing, in some cases, it may be done for other reasons. In one such case, an elderly woman disinherited her 44-year-old daughter because she felt she was well off enough to not receive an inheritance like her other siblings. While this may have been the case at the time of drafting the will, it’s important to point out that situations can change for the worse and it’s in these circumstances that an inheritance would be a nice safety net.

Estate planning laws change from state to state, so speaking with an experience attorney can be incredibly helpful, especially when it comes to who you can and can’t disinherit from your will. It’s also important to consider whether hurt feelings could create legal drama for other family members down the road. The more you consider these difficulties now, the better you can prevent them in the future.

Source: CNBC News, “How to Disinherit Loved Ones—And Which You Can’t,” Reuters News, Feb. 1, 2013

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LAW OFFERS LITTLE END-OF-LIFE GUIDANCE FOR MANDELA’S KIN

Millions of people across the nation, including many right here in the state of Texas, have been anxious watching the failing health condition of the former South Africa President Nelson Mandela. This may partially be because, like so many families here in the United States, the complexities of estate planning laws have left Mandela’s kin with little end-of-life guidance.

For those who have not been following the story, Mandela has been reportedly lying on the edge of death for the last few months. While doctors insist that he is in “critical but stable condition,” this confronts his family with the difficult decision of when to take the ailing 94-year-old off of machines. Friends who recently visited him in the hospital say he is awake and smiling but family members know that they will need to come up with an end-of-life plan soon.

In the United States, living wills make situations such as this quite easy and often relinquish the burden of making the difficult pull-the-plug decision to the person who is dying. As we’ve mentioned in past posts, this is part of your estate plan where you dictate your medical wishes and end-of-life instructions to your family. But according to reports, this may be less clear under South African law.

Current laws are vague and unclear about who gets to make the decisions for Mandela if and when he is unable to. This can get especially complicated if he has not designated a proxy in his stead. Situations such as this are not uncommon here in Texas though our state laws do offer more guidance than what the Mandelas may be getting.

Source: The New York Times, “Mandela’s Kin Face Gray Area on End of Life,” Rick Lyman, July 11, 2013

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WHAT TO KNOW ABOUT A SPECIAL NEEDS TRUST FOR A DISABLED DEPENDANT

When it comes to the well-being of their children, parents will do just about anything. That includes venturing into the very scary subject of planning for their own deaths. And no, not in a morbid sort of way. The sort of estate plans that readers of our blog hear so frequently about such as naming a guardian, adding beneficiaries to a will, or instructing family members about medical wishes.

But one thing we haven’t covered much on is about how parents with disabled children should plan for the future. While in some cases Social Security Disability benefits and Supplemental Security Income can provide a source of income, in most cases, children with special needs often rely on their parents to provide them with financial support. So what happens when those parents pass away?

If you’re a parent with a special needs child, one important way to make sure that they have financial stability is to establish a special needs trust. It’s worth noting that these types of trusts are not easily done without help from a skilled attorney. That’s because these types of trusts, while flexible in nature, can interfere with benefits received through government assistance programs. If not worded properly, a trust can quickly disqualify a disabled child’s benefits, leaving them in the exact financial crisis you tried to prevent.

Speaking to a lawyer is the first step to establishing the trust. But what about funding? How much money should you set aside? How much of those funds will be distributed at each time? These are all important things to speak to your attorney about because the answer will differ depending on your particular situation.

To someone unfamiliar with estate planning, establishing a special needs trust can seem like an overwhelming process. But this is where your attorney comes in. They can help you understand the complexities of the law and help you prepare financial stability for your special needs child after you’ve passed away.

Source: The Fiscal Times, “Estate Planning Guide for a Special Needs Child,” Sonya Stinson, July 10, 2013

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HOW THE DOMA DECISION WILL AFFECT ESTATE PLANNING IN TEXAS

During an end-of-March post, we brought to the attention of our readers the very real possibility that changes could be made to estate taxes barring the decision of the Supreme Court of two very important cases.  The most import of those was that of United States v. Windsor.  As many of our readers may remember, this court case asked whether the federal government had the right to define marriage and whether it could prohibit same-sex couples from receiving federal benefits.

Now, in what Time Magazine is hailing as “one of the fastest civil rights shifts in the nation’s history,” the Supreme Court has not only provided same-sex couples with more civil rights than were previously allowed, but may very well have changed tax and estate laws as we know them.

As many people here in Texas know, the court struck down the Clinton-era Defense of Marriage Act, which defined marriage (for the federal government) as a heterosexual union. Once DOMA was effectively abolished, the court then ruled in favor of Windsor, which ultimately changed estate planning for same-sex couples in regards to estate taxes. Even though our state does not recognize gay marriages, the federal government must now recognize the legitimacy of a homosexual marriage in the other states that do.

Aside from the lasting changes this will have on tax law, the impact this will have on estate planning will be far-reaching. It’s important to point out that while our state does not recognize gay marriage, federal estate taxes will still apply to same-sex couples provided their marriage occurred in a state that does recognize their union as being legal. What this means is that same-sex couples married in another state that have moved to Texas may file for the same “death tax” break that is awarded to heterosexual couples across the nation.

But while this will have an effect on federal tax laws, this may not an effect on other estate planning laws that are state specific. It’s because of this that same-sex couples are urged to speak with a qualified attorney to discuss how their assets will be affected down the road.

Source: Forbes, “Tax Implications Of The Supreme Court’s DOMA Decision: Same-Sex Couples To Be Subject To Marriage Penalty,” Tony Nitti, June 26, 2013

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