Category Archives: Estate Planning

What is an advance directive?

One thing people can be sure of in life is that we can’t ever be 100 percent sure of what will happen in life. We all have certain hopes and wishes for our futures, and many of us feel a better sense of peace knowing we have planned for it as best we can. An important area of concern that can contribute to that peace of mind is addressing how we wish to be treated if we are incapacitated in some way.

A legal document designed to help communicate a person’s wishes about medical treatment in the event he or she can’t make those decisions because of illness or injury is available. It is known as an advance health care directive. It is also referred to as a living will. Based on personal values, the directive sets out in writing someone’s treatment choices and preferences. It is prepared with professional advice and provided to your physicians, other health care providers, hospitals and family members.

The advance directive may specify that if a physician determines an illness is terminal, it is the signer’s request that all treatments other than those utilized for comfort be stopped. Alternatively, it can direct a health care provider to sustain life by whatever means possible. The same distinctions may be made if injury or other condition is irreversible in the opinion of doctors according to prevailing medical expertise, and treatment decisions for oneself or self-care are no longer possible.

Acceptable, particular treatments to be provided or not to be administered may be included. Physician input as to any additional specifications is helpful. If a separate Medical Power of Attorney doesn’t exist naming someone to make medical decisions on behalf of the signer, the advance directive may include this designation.

As with most other estate planning documents in Texas, the advance directive form is signed before witnesses and follows state guidelines regarding options and content. Advance health care directives are suggested for every adult’s protection, and will ensure to the extent possible that personal wishes are followed.

Source: Texas Government, “Texas Living Will Directive Form,” accessed May. 21, 2015

Why you should do estate planning now

If you avoid estate planning or end-of-life planning because you think it is too complicated, think again. There are only two main areas to consider: property and assets, and health. An attorney can easily take care of the details for you. When you understand the necessity of planning ahead, you will want the peace of mind that comes along with having proper documents in order.

For instance, why should you have a will? A will is imperative in taking care of your family if something happens to you. It allows you to designate your assets however you want to your heirs, charities or other causes. You can also restrict how you want the inheritances used, such as protecting them from going to creditors of your beneficiaries. In addition, you can specify a guardian or caretaker for any dependent children. In the absence of a will, the state may end up deciding where your assets go or who gets what.

A living will, also known as an “advance health care directive,” and a health care or medical power of attorney should be a vital part of your estate planning. A living will allows you to specify what type of medical treatment you would like administered if you are in an end-of-life situation. A medical power of attorney allows a person to make medical decisions for you if you become unable to do so. This is often used by children to make decisions for aging parents, who may be deteriorating in cognitive abilities; however, young people should not discredit this type of document as disabling incidents, such as a traumatic brain injury, can occur at any age.

You should also have a durable general power of attorney. A durable power of attorney allows someone — whom you name — to manage your finances and assets in the event something happens to you, and you are unable to do so. For instance, if an accident occurs, and you are totally disabled, someone may need to access your checking account or assets to ensure your bills get paid. They may need to keep your business running or make funds available for your medical care or treatment. This person is held to specific standards under the law and is prohibited from using your assets for their own needs over yours.

Because life is unsure, you can’t afford to put estate planning off!

Source: The Huffington Post, “4 Estate Planning Documents Everybody Needs,” Steve Cook, April. 10, 2015

Well-Organized estate planning documents

A carefully put together estate plan is one of the most thoughtful inheritances that any Texas resident can leave behind for his or her loved ones. Even if you do not believe that the estate you leave behind is going to be a very sizable one, the value of your estate plan cannot be underestimated.

Even in cases that involve small estates worth less than $5,000, a well-planned estate can help relatives and loved ones complete details pertaining to the end of your life in a manner that is free of stress. Relieving loved ones of estate administration burdens is important considering how they will already be dealing with difficult emotions relating to losing a family member.

A well-planned estate can also help Texas families avoid the risk of infighting after the loss of a loved one. Everyone has heard heartbreaking stories about families getting into legal battles over who gets what following the death of a parent or grandparent. It is frightening to think that something like this could happen in our own family, but even the most cohesive family’s bonds are strained following a death. With an intelligently planned estate, though, one can itemize personal possessions to indicate exactly who will receive what. One can also handle the division of the estate in a way that ensures everyone is treated equally to limit the chance of family disagreements.

At the Law Offices of Victor H. Falvey, we know how important your family is to you. We also know that the tiniest of details can make or break an estate plan following your death. A well-organized Texas estate plan requires foresight, legal expertise and an in-depth understanding of the individual family for whom it is to be designed.

Why you don’t want to pass away without a will in Texas

If you pass away in Texas and you do not have a will, it is known as “dying intestate”. While this sometimes happens, especially when a death is unexpected, it is something you absolutely want to avoid if you can. This is why it is good to craft a will at any time, no matter your age or the likelihood of your passing.

For one thing, you will not have any say in how the wealth is distributed. The state has a set system that will be applied to any money and other property that you left behind. This system is designed to split everything up, but there is no promise that it will be done how you want it to be done.

For example, if you were married and you had two children, you may want to leave all of the money to your spouse, knowing that your children have their own income streams. If the children were from that spouse, this is what happens. However, if one of them was from another spouse, then the two children split half of the money, and the spouse gets the other half.

Additionally, there could be extra costs for your heirs if you do not have a will, and the whole process could be delayed. Since the legal system then has to handle the distribution, it can take some time to do even simple things like officially labeling people as heirs and legally determining what assets they will get.

To save your family this hassle and to make sure that your desires are met, you need to have a will in place.

Source: Texas Young Lawyers Association, “Texas Probate Passport: A guide to probate and estate planning in Texas” accessed Jan. 27, 2015

Real estate managment plays an import role in estate planning

When individuals in Texas think of estate planning, they likely consider things such as bank accounts and family heirlooms. One of the biggest assets in any estate is land or real estate, but without proper planning, such properties can become more of a liability to heirs down the road.

One thing to consider when you own property of any type is land use and zoning. Ensuring your real estate is in order now not only saves you future hassle, but it also protects your heirs against zoning or legal troubles once they inherit the land or property.

Our land use and zoning page discusses some of the things that are important when dealing with a range of property types, especially when courts or legal documents are involved. A major step that all property owners should take is achieving an official address. Getting an address involves inspection and certification.

If your property involves a waterway, you may have a bridge constructed over the water to achieve efficient access to all areas of the property. Bridges and country roads on your property may need to be certified through the El Paso County Public Works Department; likewise, other property issues may end up before the El Paso City Development Department. Ignoring any of these issues may put parts of your estate at risk or cause the legal issues to be passed on to your heirs.

If property is a large part of your estate, it’s important to consider real estate related concerns with planning for the future. Someone experienced in both estate and real estate law can assist you in getting assets in order for the benefit of your own future as well as your heirs.

Estate planning: It doesn’t have to be complicated

Planning your children’s inheritance doesn’t have to be complicated. Whether you live in Texas or another state, if you keep a few tips in mind when you go to see your attorney or estate planner, you can ease both your mind and your children’s.

First, you don’t want your children to have big surprises at your death — especially if those surprises are not going to be good. Communicate with your children about your estate and plans while you are still alive. You don’t have to give them the “down and dirty” details, but by giving them a ballpark estimate of your estate’s worth and your plans, you have set their expectations and relieved them of anxiety or possible disappointment after your death.

If you have multiple children, likely you care about all of them. Therefore, if at all possible, don’t play favorites in your estate planning. This will only cause bitter feelings between siblings when you and your spouse are both gone. If you have reason to divide your estate unequally, the best time to explain those reasons is while you still can.

If you are afraid that your children, or one of your children, is not capable of handling the money you want to pass on to them, you can set up a trust to distribute the money in intervals, or when you feel it would be the best time. For instance, if one of your children has a drug addiction, or is still very young, you could have the money held until they are stable or of a certain age.

If you are not going to play favorites when dividing your estate, don’t trust one sibling, such as the oldest, to be in charge of equally distributing your estate among all siblings. This might be especially true if you have step-children you want to receive an equal share or if all siblings do not get along. You can add multiple beneficiaries on insurance policies and the percentage they are to receive. Include all of your children as beneficiaries with equal shares and you can eliminate potential family disputes.

Source: AARP, “How to Leave an Inheritance to Your Kids” Oct. 02, 2014

Daughter of late model loses in probate court

What may go down in judicial history as the longest fight for an inheritance has finally come to an end in a Texas court.

A Texas judge has determined the daughter of the late centerfold /model/actress/movie star, Ana Nicole Smith, will not be the recipient of the tens of millions of dollars from the estate of E. Pierce Marshall. Smith was married to the son of the billionaire Texas oil baron for a short time.

A U.S. District judge recently determined that efforts by the child’s biological father’s legal advisors to impose sanctions against the billionaire’s estate have led nowhere.

After almost 20 years of litigation, the judge indicated he was one of the few trial observers still living, who had in addition witnessed the setting of a precedent in bankruptcy court. Advocates for the late actress and her child’s biological father could not prove the Marshall family had caused damages to award sanctions.

The story was sensationalized in the news following the death of the model due to an alleged drug overdose but also served to set a precedent in bankruptcy law.

In previous cases, bankruptcy courts had been omitted from issuing judgments of the magnitude of the Smith case. However, in 2000, a judge had awarded the late actress $475 million due to improprieties in the in the billionaire’s estate. This was later reduced to $90 million two years later.

This was later reversed since the Texas probate court’s decision took place prior to the bankruptcy case.

Legal advisors for the actress stated the billionaire’s estate got bogged down too long for sanctions to be effective. The judge stated too much time had elapsed to incorporate that argument successfully.

The billionaire’s estate has been mired in other legal woes, including the resolution of defamation of character, a long-running battle with the Internal Revenue Service and a spat with his own brother.

In the state of Texas, you have the right to marry a centerfold and leave all your money to her. But in most cases that unfold in the real world of probate court, it is in your best interests to get assistance in how to navigate the world of heirs, beneficiaries and estate planning so that after you pass into the next world, your wishes will be carried out the way you wanted them to.

Source: Forbes, “Anna Nicole Smith’s Daughter Loses Fight For Marshall Millions” Daniel Fisher, Aug. 19, 2014

Texas inheritance tips to avoid potential problems

For many Texans, inheriting money from a family member’s estate may contain some unexpected consequences. Your elderly rich aunt may have left you a portion of her assets, but be prepared to deal with envious family members who may descend upon her belongings like vultures on a carcass.

Designated beneficiaries can react like children in a candy store. They might overspend on luxury items and have regrets later, inciting even more family hostility.

Experts agree the best way to handle division of assets is to plan ahead. A benefactor can do a lot of good by anticipating inheritance issues before they can begin to cause problems. It is a good idea to set up trusts instead of specifying large amounts of money to be distributed. An astute benefactor will also consider leaving behind clear instructions for beneficiaries. An estate plan should be updated regularly, especially after a birth, marriage, divorce or death.

One way to avoid potential problems later is to educate the beneficiary on the value of the money left behind. It is not always a good idea to get that dream car or boat. People may not think of how much it will cost to maintain such a costly item. Beneficiaries need to understand their purchases may be squandering the hard-earned life savings of a family member. Relatives may become territorial when items of sentimental value come into question.

Research indicates some people who suddenly find themselves with extra money can end up frittering it away in Las Vegas. Vast quantities of money can disappear quickly in gambling spots, making it is advisable to express prudent judgment when awarded an inheritance.

Blended families can also intensify the risks. As family disputes develop over who gets what, animosity brews that can sever family ties.

It’s better to be practical and seek the assistance of a professional who can help guide you in managing your finances. You can learn to be prudent with your new money, as well as benefit from good advice and suggestions on ways to make your good fortunate work with you and not against you.

Source: U.S. News & World Report, “5 Inheritance Mistakes for Heirs to Avoid” Susan Johnston, Jul. 15, 2014

Consumer protection rule could impact an estate plan

Many times, financial rules are implemented by banks and government agencies for the purpose of protecting consumers or businesses. Sometimes, those rules can eventually have unintended negative consequences for a subset of consumers that were not taken into consideration when the rule was being written. Some Texas residents may have experienced such consequences following a Consumer Financial Protection Bureau ruling in January.

The January rule, known as the Ability to Repay rule, required banks to consider a person’s ability to repay any loan prior to giving that person a mortgage. The rule was meant to protect consumers from being trapped in mortgage arrangements that would be impossible for them to be successful in. However, in some cases, the rule was applied to heirs who were inheriting a mortgaged property.

Under the Ability to Repay rule, banks were unable to grant some heirs mortgages. That resulted in some families losing homes due to legalities, even when estate planning documents called for heirs to take ownership of properties. It’s possible there were even cases where family members, such as children or spouses, were already living in the homes when the homes were lost.

The Consumer Financial Protection Bureau issued a new interpretation of the January rule in July. The new interpretation is aimed at giving families a better chance of creating arrangements that let them maintain property ownership in keeping with a loved one’s wishes. The new rule interpretation doesn’t mean loved ones are automatically granted a mortgage or mortgage transfer, but it does remove the strict requirement regarding ability to repay.

Planning ahead for situations such as a mortgage transfer is the best way to ensure heirs are able to follow through with transferring property. Working with heirs within legal processes ahead of time reduces the chance anyone will be hit with sudden financial crises following the death of a family member.

Source: Consumerist, “CFPB Clarifies Rule That Could Cause Heirs To Lose Their Homes” Ashlee Kieler, Jul. 08, 2014

Internet makes life easier, but can impede estate administration

Texas residents are using Internet resources for more and more each day. Banking, investment accounts, correspondence and storing photographs are just a few tasks that many now do through online access. However, this might hinder their heirs or beneficiaries in handling estate planning or trust administration. Refused access to password-protected information might be a real problem.

Most people are aware that different sites have different terms and conditions when it comes to access. Reportedly, Google has a specific setting that applies to a deceased or disabled user. It can be preset to allow a successor to use the account. Preventing probate delays or the necessity for a court ruling in some cases can be successful with thoughtful preparation of an estate plan.

Experts suggest including digital assets in your will or trust as you would add in your physical assets. A will and power of attorney can specifically address these digital accounts, allowing for easier asset valuation and distribution when you are gone. A trustworthy person needs access to your secure user and password list. Software applications exist to provide encryption and helpful password management for all your devices and websites. Your executor or attorney-in-fact might be the right person to trust with this task.

An example of problems accessing digital assets after a loved one is gone involves a 20-year-old marine who was killed in 2004 while serving overseas. His family had the difficult job of estate probate and settling his affairs. Because his email provider refused access to the father, a drawn-out court case ensued. Eventually the provider turned over a transcript of the account. Some states, including Oklahoma, are fine-tuning laws to help clarify and make fair these processes.

Including a plan to avoid difficulties should something happen to you will help protect your digital estate. A good way to start is with an experienced evaluation of your present online life. A sound plan can follow. A Texas estate planning attorney can advise you on how to protect these digital assets while allowing the people you choose to access them after your death without having to jump through hoops.

Source: The Evening Sun, “Financial Consulate: The crucial importance of creating a Digital Estate Plan” Ryan Fox, Jun. 13, 2014