Houston Estate Planning Law Blog
WAYS TO PRESERVE FARMLAND FOR FUTURE GENERATIONS
For many Texas residents, estate planning goes beyond passing along assets such as stocks and bonds. Specifically, many families want to pass along farms and ranches and do so in a manner that their heirs can utilize those types of properties. It is no secret that often farms and ranches have to be sold off or broken down into plots for development just so heirs can pay the taxes on them. There are options, though, in estate planning that allows heirs to retain the family farm or ranch and still be able to afford it.
One option families may want to look into is known as conservation easement. This option can be very useful during hard times, such as seen now in the drought. There are currently three types of conservation easements: farm and ranch, wetlands and grasslands.
Grants are also an option for some landowners. Grants often provide matching funds but the landowners must also get funds from state and local governments. The entity is required to provide at least 25 percent of the purchase price. The property must be privately owned and must also be subject to a pending offer. Since 2008, grants of more than $2 million per year have been available.
For those who want to keep their property intact but do not want to farm it in an agriculture way, consider using a wildlife management option. This option allows landowners the ability to stay on the property and to preserve it in a manner that best fits their needs. To qualify, landowners must use the land to promote “breeding, migrating or wintering populations of indigenous animals for human use.” This “human use” can fall into the food, medicine or recreation categories.
These are just a few of the ways estate planning can be used to keep family farms and ranches within the family. When it comes to estate planning, there are many rules and guidelines to consider when hashing out a plan.
Source: The Elgin Courier, “Local landowners learn ways to preserve family lands,” Charles Wood, Nov. 16, 2011
Continue reading: WAYS TO PRESERVE FARMLAND FOR FUTURE GENERATIONS
POOR ESTATE PLANNING MEANS JAMES BROWN FAMILY YET TO SEE A DIME
Residents in Texas and all over America often have a misconception that when a celebrity dies, surviving family members are immediately left to inherit the riches. That is only the case if proper estate planning was in place prior to the celebrity’s death.
The estate of James Brown, on the other hand, shows that poor estate planning can lead to years of lengthy and costly battles. His heirs have yet to see a dime, even five years after his death
Court battles have tied up the estate of James Brown since his death in 2006. Original estimates of his estate value hit approximately $100 million. A later settlement would have left half of his estate to a charitable trust, with 25 percent of what was left being passed to his widow, and the remainder being divided amongst his children. That settlement, however, has also been tied up in court with trustees who hope to undo it.
The Associate Press has reported earlier this month that his charitable trust has shrunk to $14,000, as a result of his estate remaining in limbo. This is in addition to $20 million in debt that grew.
This case shines light on the importance of estate planning and the complexities of estate battles.
James Brown reportedly did not update his wills or trust following his marriage or the birth of his last child. This lack of estate planning has left his estate in litigation for five years, and possibly even longer. None of his heirs, nor the charitable trust for college students in need, have been paid anything yet.
Texas residents can learn from cases like this, whether they have significant accumulated wealth or not. Though in the media we typically only find estate stories about the rich and famous, many everyday people have similar problems of a different scale.
It is never too early to settle estate planning matters, and ensure that heirs or beneficiaries will not lose inheritances in such lengthy fights.
Source: Forbes, “Court Battles and Debt Leave James Brown Estate Not Feeling Good,” Danielle and Andy Mayoras, Nov. 1, 2011
Continue reading: POOR ESTATE PLANNING MEANS JAMES BROWN FAMILY YET TO SEE A DIME
ESTATE PLANNING CAN SAVE YOUR LOVED ONES A LOT OF HEADACHES
Whether you live in Texas or New York, Alaska or Hawaii, planning for what happens to your assets after you’re gone is never an easy thing to do. No one wants to plan for that day or discuss what will happen upon their death or the death of a loved one. But estate planning is critical if you want things to go smoothly upon your death.
Experts say estate planning can be a difficult subject to discuss, but there are many reasons why it is a subject that simply needs to be considered. A recent news report detailed the story of a financial planner who found himself in a very difficult situation. A client of his had died and the adviser was left to divvy up the man’s estate between two ex-wives, one widow and four children. Each party believed they were not getting an equitable share of the man’s estate.
The difficult situation could have been avoided had the man done some estate planning ahead of time. Experts are no recommending families to counseling organizations in order rationally make future estate plans. They say it is absolutely key to discuss ahead of time with your loved ones how you intend to divide your estate upon your passing. That way, everyone knows what to expect after you are gone.
According to the Institute for Preparing Heirs, an organization that trains advisors, “70 percent of wealthy families fail to sustain their level of assets for two to three generations.” When estate planning involves multiple generations and a significant estate, the process can certainly be daunting. Throw into the mix blended families and a family-owned business and the waters can really get muddy.
Source: Reuters, “Your Practice: Tap shrinks, coaches to avoid estate battles,” Jessica Toonkel, Nov. 1, 2011
Continue reading: ESTATE PLANNING CAN SAVE YOUR LOVED ONES A LOT OF HEADACHES
ESTATE PLANNING IMPORTANT REGARDLESS OF FINANCIAL SITUATION
Some truths about estate planning in this country challenge many commonly held beliefs, a primary one being that it should only be a top consideration for those with significant assets. In fact, in a recent article written by a certified public accountant, the importance of estate planning for those in Texas and across the country with less financial means is addressed.
The CPA says estate planning is arguably more important for those will less money because they often only have one person supporting the family and do not have “deep financial resources.” Other common misconceptions include the thought that existing estate plans should only be reviewed every three to five years, only the elderly should be concerned with estate planning, and that book or CD “do-it-yourself” versions are as effective as professional services.
More than 120 million Americans don’t have an up-to-date estate plan. An estate plan includes more than just a will. The current federal estate tax laws give every American a $5 million net asset exclusion, but this doesn’t mean that if one’s net worth is less than that amount, that estate planning can be ignored. For one thing, this law expires at the end of 2012 and it is unknown what any subsequent law will entail. In addition, a proper estate plan is needed to ensure that debts are paid and assets distributed per the wishes of the estate holder following his or her death.
Finally, there are several factors that need to be taken into consideration when preparing an estate plan. These include marital status, children or stepchildren, as well as current and expected future income and ownership of any assets.
Source: Coloradoan, “Estate planning is unique to individual, not just for wealthy,” Oct. 28, 2011
Continue reading: ESTATE PLANNING IMPORTANT REGARDLESS OF FINANCIAL SITUATION