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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

Continue reading: SO YOU WANT TO DISINHERIT SOMEONE FROM YOUR WILL…

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TRAGEDIES AND THE IMPORTANCE OF DESIGNATING GUARDIANS IN WILLS

It’s 2012 and somewhere in Kansas City, a man and a woman are fighting over the paternity of their 9-month-old daughter. The mother claims the child is not his. The man becomes enraged, killing the mother then later turning the gun on himself. With both parents gone, estate attorneys turn to the couple’s wills to determine which family member will get custody of the daughter. But because nothing was stipulated in the documents, family members on both sides begin fighting for custody of the girl.

Many of our readers may recognize this as the story of young Zoey Perkins, daughter of Kansas City Chiefs linebacker Jovan Belcher. Hers is a cautionary tale that teaches us that while we may not think that the worst will ever happen to us, having the a safety net in a will is always a good idea.

In Zoey’s case, two family members wanted custody of the girl: her paternal grandmother and an aunt on her mother’s side. But because no guardianship had been established prior to the parent’s untimely deaths, child custody would be in limbo until a family law judge could determine who was better suited. While both women said that they would be comfortable sharing custody of the girl–in an effort to keep her connected with both sides of her family–but the nearly 1,400 mile difference between each woman’s residence presented a problem for a judge.

Ultimately, it was decided that the girl’s aunt, who lives here in Texas, would be a better guardian for the girl after attorneys pointed out that the grandmother had a smoking habit and had had a number of police calls to her home over the years.

An important part of any estate plan for new parents would be to designate custody of your children in the event that they suddenly die or become incapacitated. Because as this story demonstrated, the ensuing custody battle can often times take a considerable amount of time to work out in the end.

Source: The Daily Mail Online, “Judge grants custody of Jovan Belcher’s $3million baby to a cousin six months after NFL player shot dead his daughter’s mother and then himself,” Rachel Quigley et al, June 20, 2013

Continue reading: TRAGEDIES AND THE IMPORTANCE OF DESIGNATING GUARDIANS IN WILLS

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WHAT IS YOUR PLAN FOR YOUR FAMILY’S HEIRLOOMS?

Everyone in Texas knows that you can’t take it with you when you die. But what might have been important to one generation quickly turns into a dust-gathering memento for the inheritor. It’s a trend the nation has been seeing more frequently lately, especially when it comes to family heirlooms.

The question we pose to our readers this week is whether they themselves have a plan for their family heirlooms. While some families are meticulous about handing things down through the generations, a growing majority of younger generations fail to see the sentimental value or importance these treasures once held to previous generations. As a result, things that were once valued are being sold to second-hand stores, away from family members they may have been intended for.

While you can’t take these things with you, a person can ensure that a treasured memento, such as a hand-carved hope chest or a set of formal china, stays in the family. This can be done through estate planning documents such as wills. A person can specify not only an inheritor of an object but can leave instructions to that person about what should be done with that object down the road.

It’s also a good idea to talk to your family members about your belongs as well. Divvying them up before your passing can not only save you time when preparing your will but you can have those serious conversations with your loved ones about why certain objects are important to you. By conveying your sentimental attachment to something, your loved ones may be more inclined to keep it in their possession down the road.

One of the major problems inheritors say they run into is having the room to put the belongings they inherit. One way to remedy this problem is to discuss estate sales. This way, the person passing on items can decide which ones they would like to see sold instead of later inheritors trying to figure out if selling something is “really what they would have wanted.”

Having these discussions and making these decisions are all part of a solid estate plan. Because in the end, if you can’t take it with you, make sure you determine its future before it’s too late.

Source: Wicked Local, “No longer save for generations, family heirlooms are being shed,” Kim Palmer, June 4, 2013

Continue reading: WHAT IS YOUR PLAN FOR YOUR FAMILY’S HEIRLOOMS?

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HOW ONE FAMILY TURNED 5 CENTS INTO $3.1 MILLION

When it comes to our belongings, it’s often times hard to put a price tag on the things that hold sentimental value to us. Sometimes, when it comes time to sell those possessions, it’s amazing how much someone else will pay for something you may have thought to be worthless.

Such was the case for one family who wanted to see how much one particular family heirloom could fetch them. What started as the simple inheritance of a 1913 nickel that had been in their mother’s possession since 1962, soon turned into $3.1 million, providing the family with more financial security than they could ever imagine.

The heirlooms story began in 1912 when the coin was minted, along with four others, with the year 1913. Shortly after the coins were broken up in 1942, a man purchased one of the coins for a reported $3,750. When the man died in a fatal car accident in 1962, the nickel passed to his sister who was told that it was a fake.

Deciding to keep it as a family heirloom, the coin was placed in a box with other family items and stuck in a closet. Upon her death in 1992, the coin was inherited by her children. Despite being told that it was a fake, the children wanted to know if their family heirloom carried any value to someone else. Surprisingly, it did and the coin sold at auction for $3.1 million. After taxes, the children will split $2.7 million amongst themselves.

Although it was bittersweet to part with the coin, the family now has the means to invest their newfound inheritance for future generations.  Proof that even the smallest of assets in a will can turn into something big in the end.

Source: The Twin Falls times-News, “1913 nickel fetches more than $3.1M at auction,” The Associated Press, April 26, 2013

Continue reading: HOW ONE FAMILY TURNED 5 CENTS INTO $3.1 MILLION

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ONLINE DO-IT-YOURSELF WILLS ARE RISKY FOR ESTATE PLANNING

Many Texas residents have tried to create a will on their own. If you are well versed in estate planning law, you may be able to do this. However, a recent article evaluates online drafting alternatives for estate planning. Despite the many do-it-yourself wills that are available online, professionals say that most people need help in constructing these legal documents.

Sure, a do-it-yourself will can work for individuals or couples with simple, child-free lives. However, most lives are complex enough to require detailed wills. Specifically, domestic partners, couples with more than $1 million in assets and non-citizens are some of the people who probably want to retain an attorney.

Furthermore, an evaluation of online do-it-yourself wills show that they may not be sufficient. For example, LegalZoom is an online legal document factory. Legal professionals reviewed the accuracy of the online site. In one case, attorneys examined an estate plan, which was constructed from the website.

According to reports, the website lacked legal backbone, especially in issues related to guardians. Who will take care of your kids when you pass? Do you have any backups? Furthermore, the will was missing age specifications for trusts. Most parents want their kids to be older when accessing such money. If you and your spouse were to die while your kids were young, LegalZoom would give your children access to trust money right away.

Attorneys found many other technical problems on LegalZoom and similar websites. Ultimately, professionals determined that the $81 spent on the website was not enough for a legally sufficient will. Furthermore, even if an individual were to pay for the Cadillac of wills on LegalZoom, one would ultimately be looking at hundreds of dollars for a mediocre and unstable will.

Therefore, if you are interested in making estate plans, you may want to speak to a legal professional. Unless you have an unusually simple life or are extremely knowledgeable in estate law, it may be difficult to do this on your own.

Source: The Oregonian, “Fill-in-the-blank wills can be a little skimpy,” Brent Hunsberger, March 10, 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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HOW GOING PAPERLESS IS CHANGING ESTATE PLANNING FOR THE FUTURE

We’re moving away from a paper driven society. Now, this may not be a new statement, but it’s surprising to find out how many people take this information for granted and an increasingly digital society would raise a few concerns than it is. Case in point: what happens to your digital assets after you pass?

Estate planning has seen this question come up time and time again in the past few years as more and more people are beginning to realize that a majority of their information and assets could be lost to cyber space if they were suddenly to kick the proverbial bucket tomorrow.

So what are experts suggesting people do as far as planning when it comes to their digital assets?

Although a majority of your digital assets may only hold personal or sentimental value-like family photos or the recording of your daughter’s first ballet recital-some of your more valuable assets, such as bank account and other financial assets, may be stored digitally. Automatic bill pay, though convenient now, could pose a problem down the road when it comes to dividing your assets to beneficiaries.

To avoid a lot of problems in the future, many experts suggest writing down any usernames and passwords and including them in your will; that way, in the event of your passing, your loved ones can have access to the same information that you were privy to in life. Be sure to also discuss with your estate planning attorney what can and cannot be included in your will when it comes to your digital assets. Though some states may have small laws that cover digital assets, others may not.

As our society pushes further away from the use of paper, we open ourselves up to a plethora of issues. And without the legal system on par with our advances, this can often times leave us wondering what we’re able to pass on to future generations or not.

Source: Investing Daily, “Securing Your Digital Assets,” Bob Carlson, Jan. 15, 2013

Questions about estate planning and wills? Check out our firm site for answers to these questions and more.

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THINGS TO THINK ABOUT WHEN PLANNING YOUR WILL

Although this may seem like old news to many people here in Texas, it’s surprising to see how many people do not plan for their estate until it’s almost too late. Some of us feel the morbidity of it all-writing a will while you’re still in your prime-but others haven’t begun writing their wills because they simply don’t know where to start.

Most people usually start seriously considering a will when either someone close to them passes or they are told that they have a serious medical condition that could greatly reduce their time here on earth. No matter what gets you to start thinking about estate planning, sometimes people get so worried about ensuing arguments over their estate decisions that they put off making a plan to avoid the headache.

For those who find themselves in this situation, some estate planning exerts will advise you to calm your anxieties by simply thinking about one simple thing: give to those who you hold dear. Once you set aside the daunting idea of separating your belongings and financial assets equally amongst your beneficiaries, you allow yourself the freedom to show how much you cared about someone through the act of giving.

A majority of people, when planning their wills, focus most of their efforts on dividing their estate, often times completely forgetting about including their medical wishes as well. They’re another important part of any will that not only help ensure that your burial wishes are followed but help give directions to family members on how to follow through with your wishes.

Source: The New York Times, “In Writing Her Will, It’s the Little Things That Matter,” Laura Holson, Nov. 13, 2012

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IT’S NOT THE AMOUNT THAT COUNTS: LEAVING MONEY IN WILLS FOR THE RIGHT REASONS

Everyone in Texas has heard the saying “it’s the thought that counts,” but many people are saying that this really is the case when it comes to leaving money to others in your will.

It’s not a new concept to leave people money in your will but now a small-but growing-group of people are taking a public pledge to leave money to charities despite the fact that they may not have an exorbitant amount of wealth.

According to Giving USA, the research arm of the Center on Philanthropy at Indiana University, nationally, donations totaled approximately $218 billion, and not just from people with large fortunes. “As people have more confidence in their income, not only from their job securities but from the investments, then they feel more confident in giving their money away,” says Pierce Goglia, a spokeswoman for the Dallas-based nonprofit group Communities Foundation.

The nonprofit has seen an increase in donations since the economic crisis ended. Their annual Giving Day campaign raised a record $14.4 million this year from thousands of people in the Dallas-Fort Worth area, up from the $10.7 million in 2011.

Inspired by celebrities who are currently encouraging fellow millionaires to leave money to charities in their wills, a modest philanthropy movement has cropped up in cities across the nation. Dubbed “giving circles,” these groups allow for like-minded people to pool their money and give to causes they deem important. They are becoming the easy way for people who may not have a lot of money to help give a large donation to a charity or organization.

For many people, planned giving has to involve attorneys and legal advice, but according to some, that’s simply not the case. Though many aspects of estate planning do require legal help, some people would be shocked to learn that it can be as simple as changing the beneficiary on an IRA or adding a charity’s name as a “Transfer-on-Death” to a mutual fund.

Many people also have the idea that you have to leave thousands of dollars to people or organizations in their wills. More and more, people are beginning to see that this is not necessarily the case and that sometimes, it’s the sentiment behind the donation that really makes all the difference.

Source: The Dallas Morning News, “Charitable giving not just for the ultra-rich,” Hanah Cho, Nov. 10, 2012

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DECEASED BUSINESSMAN LEAVES MILLIONS TO HOMETOWN IN WILL

People often times say: don’t forget the little guy. It’s a saying that many Texas entrepreneurs keep in mind because when they finally strike it rich, they want to make sure to show their appreciation to all the people who helped them get to the top.

Often time people show their appreciation while they are living, but others, such as one Indiana businessman, chose instead to show his appreciation for his entire hometown by leaving millions of dollars in his will.

He had always told members of his hometown’s community foundation that he had put them in his will though he never disclosed the size of his gift. It seemed it wasn’t just his will that he was secretive about but his income as well.

“I knew he was taking care of himself and not borrowing from me, but I had no idea he was that successful,” his 94-year-old mother said. Her son, who owned a successful movie production company in Los Angeles, never fully disclosed his job or how much money he had amassed over the years.

After suddenly passing away last October from a heart attack, his family wanted to make sure that the entrepreneur made good on his promise to his hometown. Initially, the amount promised to the city was somewhere around $125 million; but after selling off some real estate, that figure has now grown to an estimated $150 million.

Community foundation staff were left speechless because of the generous gift, pointing out that this donation more than triples the foundation’s holdings. The foundation’s president summed it up by saying that the scale of impact that this gift will have on the community is historic; it will have remarkable effects.

Source:

New York Daily News, “Businessman leaves $125M to help hometown,” Christine Roberts, Aug. 29, 2012

Associated Press, “Businessman’s gift to Indiana hometown grows to $150M,” Oct. 10, 2012

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