Category Archives: Estate Administration

3 types of fiduciaries used in Texas

If you’re not sure what a fiduciary is and you’re thinking about doing some estate planning in Texas, it’s important to look into exactly what this term means and the different types that are used. At its root, a fiduciary is an entity that works for you during this process. It can be a person — this is very common — but it could also be a trust company or a bank. They all perform similar functions in distributing your wealth after you pass away.

The first type of fiduciary is a trustee, and this term can be used with all of the above examples — a bank, an individual or a trust company. The trustee is given your property or wealth and legally owns it, but the trustee is also obligated to do whatever is mandated by the trust. For example, an educational trust for your grandchildren may pay out money to cover their tuition, but nothing else.

The next type is known as an executor. This is similar to a trustee, but an executor will often be used when there is not a trust fund, and the executor is responsible for referring to the will and doing what the will instructs. For instance, the executor may inform the family members of what wealth and property has been left for them and then work to get it into their possession. Often, this all happens at one time, rather than utilizing the long-term distribution of a trust.

A personal representative is virtually identical to an executor; this is simply another term used to describe the same job. The personal representative may also need to sign certain legal documents.

Source: American Bar Association, “Guidelines for Individual Executors & Trustees,” accessed May. 04, 2015

Why set up a trust?

Trusts are an important estate administration document, and they can be used by anyone in the state of Texas to protect or pass on wealth. You don’t have to have a great deal of wealth to benefit from a trust, either, and there are many types of trusts to choose from.

One reason to set up a trust is to ensure any minor children or dependents are taken care of if you pass away. It’s not pleasant to consider, but you can’t know when such an event might happen, so planning now is usually the safest option. Trust are usually held by a trustee, who handles assets according to your wishes to ensure all needs are met for your dependents until a time when the dependents can take care of themselves. Trusts can also be used to take care of dependents who are physically or intellectually handicapped.

Trusts also let your heirs avoid some or all of the probate process, which can be a big relief for them at a time when grief makes it hard to face a legal proceeding. Although Texas doesn’t have estate taxes, trusts can protect your wealth from other taxes, including some federal estate taxes.

Another reason many people set up trusts is to protect their wealth for later in life. If you should become incapacitated, a trust can ensure you are amply provided for. It can also protect your assets against taxation and creditors even if you are not incapacitated.

Trusts are complex legal documents, however, so you do want to take care in setting them up. Working with a professional to ensure all possibilities are covered is often the best way to protect your future and your heirs.

Source:, “Trusts” accessed Mar. 13, 2015

Battle rages over Robin Williams’ estate

After the passing of Robin Williams, it seemed that the man’s wife and his children — who come from previous marriages — would not have to fight in court over his estate since he had done such a good job planning out what was to be done with his possessions. He and his wife had a prenuptial agreement, and his estate plan is in line with that agreement.

Basically, it gives his wife the home that they had in Tiburon, and it even says that a trust must be made so that the expenses of the home are financially covered. Other properties in Napa Valley are then given to the children, along with a lot of Williams’ personal memorabilia and effects.

However, for some reason, his widow has decided to start a court case. She wants to keep all of the things in the house, despite the estate plan saying that some of it goes to the children. She also wants the court to decide how large her trust should be.

What is curious about this development is that it has happened at all. Some of the things that she is asking for are already supposed to be done; for example, a legal team is already supposed to determine what the trust has to cover and then they will set it up to pay for the house. By making it into a court case, Williams’ widow may get the same end result, but everything will be more public.

To avoid things like this in Texas, it is very important to create an estate plan and to be very specific so that there is no room for debate.

Source: Forbes, “Robin Williams’ Widow Starts A Court Battle — But Why?” Danielle and Andy Mayoras, Feb. 03, 2015

What does Medicaid consider to be your estate in Texas?

If you’re going through the Medicaid recovery process in Texas, it is important to know what is technically in the deceased party’s personal estate, at least in the eyes of Medicaid. This could be a bit different than you would naturally assume, though most of it is pretty straightforward.

To start with, you should know that only the items that are eligible for probate are going to count. That means that the following are usually going to be exempt:

— Proceeds that were obtained from an insurance policy.– IRA accounts and other types of personal retirement accounts.– Pensions given out by former employers.– Accounts held in banks or similar institutions that pay out when a person passes away.– Joint accounts.– Wealth that is held in mutual funds.

You may be thinking that wealth that is not kept in Texas, will also be exempt, but this is not always the case. The physical location of the wealth does not always matter, just so long as it is in the person’s name and technically within his or her estate.

Finally, you should know that a will cannot be distributed as long as there are any outstanding claims from the recovery process. This has to be taken care of first. Even big-ticket items, such as homes, could be claimed in some situations.

No matter where you are in this process, you need to know how all of the laws impact you in Texas. Be sure that you fully understand the claims, your rights and what you must do.

Source: Texas Department of Aging and Disability Services, “Medicaid Estate Recovery Program FAQs” Dec. 28, 2014

How will an estate be managed in Texas?

When someone in Texas passes away, something has to be done with one’s possessions and assets. At the same time, specific debts may need to be taken care of. The overall distribution process is known as estate management. There are three main ways in which this is going to be done.

First of all, you might decide to go with an informal probate process. To do this, you put in the paperwork, and the court then assigns someone to the job. That person will distribute things as he or she sees fit, then put in a report to be approved by the court. For these types of cases, a hearing may never become necessary.

Another option is the formal probate process. The court is more involved in this, and hearings and other court meetings may be necessary. This type of process is often going to be chosen if there are some major complications. For example, one of the deceased person’s heirs may be disputing the authenticity of the will.

Finally, there is the process of using a personal representative. This could be a family member who is actually listed in this capacity in the will. It could be another individual that the court — or the family — chooses. It could even be an institution, like a bank, in some cases. It is then that representative’s job to follow the will and distribute the assets.

If you are trying to work through a person’s will or estate and you want to make sure that it is all done properly and legally, make sure that you know all of your rights and legal options.

Source: FindLaw, “How to Administer an Estate” Nov. 03, 2014

Heirs to pancake guru file lawsuit claiming legal issues

Being proud of grandma’s cooking is likely something many Texans can understand. Whether it’s biscuits and gravy, fluffy breakfast pancakes or spicy tamales, whatever your grandmother made better than anyone else was always a treat on the table. For one family, a great-grandmother’s pancake expertise went beyond the family table. According to a $2 billion lawsuit, that woman’s pancake recipes became a favorite at tables across the country in the last century.

The woman was Anna Short Harrington. Her heirs have filed a lawsuit stating that she was the inspiration for the Aunt Jemima brand. They further claim legal issues exist between the woman’s estate and both Quaker Oats and its parent company.

The lawsuit alleges that the companies participated in a conspiracy meant to keep royalty payments from Harrington and her estate. According to the family, Quaker said there were no records that Harrington every worked for them or that they had images on file of her. The lawsuit claims that Quaker deposited the woman’s image with the U.S. Trademark Office, however.

The family reportedly filed the lawsuit after obtaining a death certificate. The certificate allegedly named Quaker Oats as Harrington’s employer. In addition to using the woman’s image on packaging and in branding, the family alleges that the companies stole the woman’s pancake recipes for use in their mass-market products. They say the woman was never fairly compensated for this.

The suit is being filed as a class action. Harrington’s great-grandsons are reportedly bringing the action on behalf of her descendants, seeking what they believe to be fair royalty payments dating back to Harrington’s initial involvement with the companies.

Source: CNN Money, “‘Aunt Jemima’s’ heirs sue product makers for $2 billion” Patrick M. Sheridan, Aug. 11, 2014

Elder Law Caveats for durable power of attorney

Most people these days are living longer and prosperous lives. Advances in health and technology provide more information designed to keep us healthy. Regardless, after we reach a certain age, we need to consider what will happen to our assets after we pass on.

One case involved an older gentleman who had followed all the necessary steps to probate his wife’s will upon her death. The question arose about where to keep this valuable document for safekeeping. When the man designated his son as the executor of his will, he was advised to assign his son durable power of attorney. Legal documents vary and require different processes.

Most financial institutions will ask for an original durable power of attorney when the designee seeks to carry out a task. It is critical that the institution see the original, or the act will be rejected. A photocopy is not acceptable, and the final wishes of the deceased cannot be carried out.

For a while, this was not the case in Texas. From 1989 to 1992, durable power of attorney had to be filed with the county clerk. This was later changed for real estate transactions and to coincide for increased lifespans. Upon filing, the maker needs to be proactive in keeping track of his documents, also informing his agent as to their whereabouts and status. Of equal importance is the protection of the last will and testament. The original needs to be kept under lock and key for safekeeping in case it needs to be present in court. A will should not be filed with the county clerk, as it lends itself to an invasion of privacy. Experts also recommend an individual assign a medical power of attorney and directive to physicians. Photocopies are acceptable for this, but originals should be kept in a safe place.

If you have an elderly member of your family who is considering how to carry out his or her final wishes, it is advisable to investigate how the state of Texas views probate, last wills, and durable power of attorney. If your loved one becomes too ill or disabled to care for him or herself, his final wishes may never be carried out. Duties of ownership and assets should be reviewed by a trusted person who can help your loved one be laid to rest in peace, providing for heirs and beneficiaries as desired.

Source: Source: “File your Durable Power of Attorney with the County Clerk,” Paul Premack, July 7, 2014

In Texas probate court, bonds a clear-cut arrangement

It is a common misconception that bonds are not needed in personal representation of the estate of another. Even if a will does not specify a probate bond, the Texas court may rule that you need to complete a bond.

A bond represents an agreement similar to a promissory note. In the legal world, it translates into protection of estate funds. The courts prefer it when there is a written commitment of one’s fiduciary duty regarding the estate of another. A court-appointed authority makes a judge uneasy, as there is little control over the actions of another. Even legal representatives have been known to act inappropriately, so the presence of a bond implies protection.

A bond represents an arrangement in which a borrower’s obligations are clearly delineated, and therefore, calls for better and more effective accountability. It allows for what happens if the personal representative violates their fiduciary duties.

The courts may ask for an added layer of security by requiring a bond with sureties. This requires the personal representative to exert extra care in the reliability of his or her performance. While a judge may feel safer by an added obligation of protection, there may also be increased access to other resources in case a recovery is required. Sureties, in this case, act like a co-signer, who takes on the debt should it default.

In cases like this, a corporation can provide services on a bond for a charge. Additional individuals with considerable assets can also cover the estate’s value, thus representing sureties for a bond. Both instances vouch for a personal choice of a representative and take on the added accountability for their performance.

In some cases, relatives or family members leave wills attempting to gloss over the necessity of a bond. However, the next best option is to obtain a waiver of a bond’s sureties.

Real estate law, bonds, wills, estate administration and probate issues in the state of Texas are complex matters, not for the faint of heart. Especially when emotions and family enter the mix, you need the trusted services of legal professional who will participate actively in protecting your best interests and those of your family. Do not wait until the court steps in to make an unsavory ruling. Make sure your will and probate plans are ironclad for you and your family to avoid problems later.

Source:The Lowell Sun, “Probate bond is always needed” James Haroutunian, May. 30, 2014

Estate-related legal issues to consider when moving state

Whether you’re moving into or out of the state of Texas, it’s important to consider all the legal and financial ramifications. One area to take a look at is estate complexities that can occur when your wills or other documents are somehow linked to the state of origin. Though a properly executed will should be valid in any state, it doesn’t hurt to review your estate planning for things that could cause issues in your new state.

One thing you’ll definitely want to review involves legal documents relating to medical concerns. Health care powers of attorney, living wills and directives may all be governed differently in your new state. To ensure your wishes are carried out during an end-of-life situation, have documents edited or changed to reflect appropriate state laws.

Your will or other estate documents might also reference certain state laws within the text. As a resident of a new state, those references may no longer have any effect and could complicate the administration of your estate. To avoid complex probate issues or confusion, make sure your documents are edited to remove state references or are brought in line with appropriate regulation in your new state.

Another area of concern to couples with estate planning documents in place is whether a state is a community property state. Texas and many other states operate on the basis of community property, which changes the way assets are handled in the event of a divorce or death. When relocating to or out of a community property state, review estate documents to ensure proper protections are in place for heirs and surviving spouses. The best advice would be simply to have a professional examine your documents before your move.

Source:The Spectrum, “State-to-state estate planning creates issues” Scott Halvorsen, May. 22, 2014

Disabled vet charity under fire in Texas

A crime victim advocate and former prosecutor has requested that the Harris County District Attorney’s office look into a disabled veteran charity’s financial records after some veterans alleged shabby treatment by the organization and broken promises.

A blind veteran who died last year was living in a home that he had gotten with assistance from the charity and his own contribution of $50,000. The charity tried to take the home back after his death from cardiac arrest by using a buy-out option stating that if the vet died within 10 years of taking possession of the home, the charity could buy it back for the $50,000 veteran contribution cost.

However, the veteran’s family filed suit against the agency, saying that the buy-out option was invalid. The vet’s father held his son’s power of attorney but was not present when his son signed the papers. Due to his blindness, the former Army specialist was unable to read the provisions of the contract. The father also alleges that the reported $250,000 value of the home was inflated from the $170,00 listed on the contract. The agency had also promised to make the home accessible for the blind, yet failed to do so.

The family hired an investigator to review the charity’s financial records, but the administrators of the charity refused to allow him access. After being contacted by the Harris County District Attorney’s office, the charity administrators agreed to comply with Texas law that states the public may have access to their financial documents.

After the death of a loved one, relatives are saddened and often stunned and not thinking clearly. An estate attorney can review all documents pertaining to the estate of the deceased to insure that everything is in order and take the necessary steps to remedy any improprieties.

Source: Houston Chronicle, “Questions raised about Houston charity that builds homes for veterans” Cindy Horswell, Apr. 08, 2014