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Wills: Managing Your Estate

Wills: Managing Your Estate. By: Burke C. Marold, J.D ., M.B.A. Marold Law Firm, PLLC – Managing Member. A Philanthropic Minded Law Firm ®. TX Default Rules. Texas Rules of Intestate (dying without a Will) Unintended (or intended?!) consequences

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Wills: Managing Your Estate

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  1. Wills: Managing Your Estate By: Burke C. Marold, J.D., M.B.A. Marold Law Firm, PLLC – Managing Member

  2. A Philanthropic Minded Law Firm®

  3. TX Default Rules • Texas Rules of Intestate (dying without a Will) • Unintended (or intended?!) consequences • Confusion, controversy, &/or loss of security • Irresponsible • More court oversight • Greater cost of time and expense

  4. Intestate:Court Process • Application to court to determine heirs • Unintended results? • Need for witnesses and other proof • Application for appointment of Admin. • Waivers and consents • Risk of falling into a dependent admin. = > $$

  5. Real life example I • “Ted”; age 42; married to “Mary”; makes $200k a year; sole breadwinner in household; has three children, one from a previous relationship; is killed by a car while crossing the street; has NO Will. • Ted’s estate owns the following: • 100% of house (wife and two children reside there); • Some vacant land in Corpus Christi; • Four cars HOW IS TED’S ESTATE DIVIDED?

  6. TX Default Rules Wife • Share of separate land: 1/3 LE • Share of separate personal property: 1/3 • Share of Ted’s community: ZERO Children (3 split) • Share of separate land: 2/3 plus 1/3 • Share of separate personal property: 2/3 • Share of Ted’s community: WHOLE

  7. Problems • Surviving wife is now forced to find a job while at the same time she has “lost” ownership of her house • Child from previous marriage is now a co-owner of estate assets with Wife and two other childen • How do you divide a house, land, and cars four ways? • Ted’s new wife and first child do not get along. • Two of the children are underage = GUARDIANSHIP • ..... A lot more problems!

  8. Real life unintended results • Court declaration of heirs; appointment of administrator for the estate • Court declared guardianship of minor children • Divided ownership of assets • Stress, anxiety, tears, frustration • $15,000.00+ in attorneys’ fees

  9. Real life example II • “Sally”; age 79; suffered with severe physical illness for ten+ years; abandoned by her three children; taken care of by her neighbor for fifteen+ years; has NO Will. • Sally’s estate owns the following: • $200,000 house • $90,000 life insurance policy; • One car HOW IS SALLY’S ESTATE DIVIDED?

  10. TX Default Rules Loyal neighbor • Share of separate land: ZERO • Share of separate personal property: ZERO Children (3 split) • Share of separate land: 100% • Share of separate personal property: 100% IS THIS FAIR? IS THIS WHAT SALLY INTENDED?

  11. TX Testate Rules • Texas Rules of Testate (dying with a Will) • You make the rules! • You have the control! • You take responsibility for your estate! • You leave your family more secure! • You allow healing to take place!

  12. Two types of Wills • Formal witnessed Wills • Signed by you (18+), two witness (at least 14 yrs. Old), and notarized • “Independent” • Streamlined court process • Witnesses must sign @ same time • Holographic Wills • Entirely in handwriting of testator • Made with intent to be a Will • Dated and signed • However, more requirements @ court

  13. What happens @ death? • With valid Will • Uncontested court docket (i.e. Probate Court) • County where Decedent resided • Executor name is officially appointed • Authority to act for “estate” and creation of entity • Pay debts, administer estate, follow court directives, distribute property, sign final and estate tax returns • Without Will • Arrange for special hearing • Application to Declare Heirs • Application for Independent / Dependent Administration

  14. Why Probate? • Probate must happen! • Must hire an attorney • No authority to act or bind estate without Letters • Transfer title to Real Property and other “titled assets” (big issues here!) • Notice to creditors • Notice to beneficiaries / heirs

  15. Advanced Planning • Living Revocable Trust • Avoid Courts entirely • “Avoid” possible contests to your estate • More control • Lifetime support (i.e. guardianship of estate avoidance) • Creditor protection to beneficiaries • Simpler, sometimes much cheaper (ancillary probate_, can be more flexible • Private versus public

  16. Advanced Planning • Durable Financial Power of Attorney • Medical Power of Attorney • Advanced Health Care Directive (i.e. Directive to Physicians) • Declaration of Guardian in event of need • Declaration of Guardian for minors • HIPAA Authorization • Life Insurance, beneficiary designations • DNR, donation of organs, affidavit of heirship for motor vehicles • Special-needs Trusts

  17. A Philanthropic Minded Law Firm® QUESTIONS?

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