Was That Missing Will Revoked, or Just Misplaced?

Posted on May 16, 2012 by Keith Davis

I recently wrote in a post that in “Texas, if the executor cannot locate a decedent’s will, the presumption is that the decedent revoked it.  This can upset many of the objectives the decedent had and make probate of the estate much more costly.”  To be sure, that result is still a distinct possibility, but the Texas Court of Appeals in Amarillo recently threw that presumption into doubt.

The Texas Probate Code provides that a written will which cannot be produced in court must have the cause of its non-production proved, and such cause must be sufficient to satisfy the court that it cannot by any reasonable diligence be produced.”   In the Amarillo case, the proponent of the will had introduced a copy of it.  He explained that he could not find the original even after looking all through the decedent’s home, office, safety deposit boxes at local banks he used and the files of the attorney who drafted the will.  The person arguing that the will should be presumed revoked in the absence of the original, claimed these efforts of the proponent were insufficient evidence to overcome the presumption.  Somewhat surprisingly, the court concluded that the decedent did not revoke the will submitted for probate and agreed with the proponent.  The court stated that the proponent did not have to demonstrate an affirmative reason for why the original could not be located.

But how you prove a copy of a “lost” will is not the only lesson we learn from this case.  What if you really want to revoke a will you executed? Can you just tear it up and throw it away?  In light of this decision, that might not be wise.  Someone who was favorably treated in that will could bring a copy to court after your death and effectively resurrect the old will.  The best alternative for ensuring the revocation of your will takes effect is to execute a new will revoking the old will and be sure those who are more favorably treated by the new will are aware of its existence and where the original of it will be stored.  If a new will is not going to be executed to revoke the old will, you should at least make a big production of revoking the old will and include plenty of witnesses – and ones that are likely to outlive you and recall the revocation.

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Taxing Issues Covered on You Tube?

Posted on May 4, 2012 by Keith Davis

Did you know the IRS has its own You Tube channel?  You can find many key tax issues covered in brief videos, which include references to where you can find more information in other IRS publications.

For example, many people with estates approaching or exceeding $1 million (this includes life insurance you may have) are doing gifting this year as part of a comprehensive review of their estate plans.  Many of the IRS’s videos address the topic of gifting.  Look at this link for a video on some of the implications of gift-giving.

If you have questions on how gifting might benefit your estate planning, 2012 provides a great opportunity for you.  Don’t wait until late in the year to do your planning.  You might not have enough time to get everything completed before the end of the year and the beneficial aspects of the tax code will not continue into next year unless Congress takes action.

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It’s My Turn To Be Executor!

Posted on April 30, 2012 by Keith Davis

In my last post (“Where is that Power of Attorney?” posted April 21, 2012), I commented on how to ensure your executor and agent can obtain your important documents when they need them.  But what do you do when you are the executor or agent designated by another?

Initially, when you are asked to serve in one of these capacities, you should ask the individual to tell you in writing where his or her important documents will be stored and how you can gain access to them when the need arises.  If the individual provides you a copy (or the original) of those documents, you should be sure you have a safe, secure location to store those documents, and that it is a location that you will remember.  If you are forgetful, you may need to write down the location somewhere you will find it later.

You must remember that if you cannot locate a power of attorney, it is very unlikely that any institution will accept your word that you are the individual’s agent.  This would subject the institution (medical or financial) to too much liability.  With regard to wills, if they cannot be located, the presumption in Texas is that the decedent revoked the will.  That presumption can be overcome, but you will have to submit evidence to the court that the decedent did not intend to revoke it and you will have to establish what the terms of the will were.  Depending on the facts of each situation, this can make for a much more expensive and time-consuming probate process and may result in vastly different distribution results than the decedent intended.

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Where is that Power of Attorney?

Posted on April 21, 2012 by Keith Davis

It is frustrating as an estate planning attorney to receive a call from a client asking if I have the estate planning documents they signed.  Because our society is so mobile, I do not retain original signed estate planning documents for my clients, but send them back to clients with instructions on how to keep them.  But many times clients are so relieved that they have signed the documents, they totally ignore the instructions I send them with their original documents.

So what should you do?  Some people provide the original documents to the person who will need them when they become incapacitated (in the case of a power of attorney or medical power of attorney and related documents) or die (in the case of a Will).  But often people do not want to provide the original document to that person until they actually need to use it.  What do you do in that case?

Instead of providing the original to the person(s) you appointed, you may elect to provide a copy of those documents along with a description of how the agent, in case of need, can obtain the original document.  For example, if you kept the original documents in a file cabinet in your home, you might send your appointee a copy of the pertinent document along with a description something like the following:  “If I ever become unable to handle my own affairs or am incapacitated, you can find the original of this document in a folder labeled “Estate Planning Documents.”  That folder is located in the top drawer of a locked file drawer in my bedroom closet.  The key to the file is located in the kitchen cabinet to the left of my stove.  The key to my house may be obtained from my neighbor, Susan Jones, who lives at 1234 Mulberry Street in Plano.  Her telephone number is 214-555-5555.”  This method allows your appointee to easily locate your documents when the need arises, but withholds from them any temptation of using the documents before they are intended to be used.

Remember, if your agent or executor cannot locate the original document, the presumption in Texas is that the document has been revoked.  And for Powers of Attorney or Medical Powers of Attorney, delay in locating those documents can cause major problems.  Similarly, inability to locate your original Will may result in the bequests you made being unknown and not put into effect.

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The Dark Side of Improper or No Planning

Posted on April 7, 2012 by Keith Davis

One of my favorite columnists, Pamela Yip, has written another great article regarding the need for estate planning and how the lack of proper planning can cause your family severe financial and relational problems.  This column in the Personal Finance section of the Dallas Morning News is titled “Death, money and payback.” It is set out in its entirety below.

Challenges to wills fraught with emotion

By PAMELA YIP

Personal Finance Writer

pyip@dallasnews.com

Published: 06 April 2012 08:00 PM

Dave Plunkert/Special contributor

 

When it comes to dealing with an inheritance, make no mistake: It’s fertile ground for a family war.

Often, one child feels cheated out of his share and ends up challenging the will.

“You would be amazed at the number of calls we get on the topic and the frequency it arises in client discussions,” said Norm Lofgren, estate planning and tax lawyer at Looper Reed & McGraw PC in Dallas. “Death, money and payback do strange things to folks.”

Those seeking to challenge a will need to know upfront: It won’t be easy.

To begin with, “there’s really not much you can do until the person passes away,” said Jay Hartnett, partner at the Hartnett Law Firm in Dallas, which specializes in estate and trust litigation. “You can’t contest someone’s will until they’ve died, until it’s been offered for probate.”

Hartnett also said much depends on the circumstances involved in the challenge.

“If someone is 40 years [old] and is doing a will, it’s very difficult to contest the will,” he said. “But if you’ve had someone who’s had an estate plan their whole life and then in the last three months of their life, they suddenly change their estate plan completely and leave it all to one child and cut all the others out, that generally screams that there is some issue out there.”

Will challenges often occur in “second-family” situations, Lofgren said.

“Dad divorces, remarries younger woman, Dad dies and children from Dad’s first marriage are unhappy that the second wife receives more under Dad’s will than the children think appropriate,” he said.

“I can’t tell you how many times I have cautioned a couple in second-family scenarios that the second wife is not the mother of the children from the first marriage, and, when Dad dies, there is a potential for a will contest.”

Hartnett advises parents not to cut a child out of their will. “Anytime a parent decides to cut one of their children out, they can pretty much guarantee themselves that there’s going to be a will contest,” he said.

In Texas, there are several ways to contest a will:

Show that the person drawing up the will lacks “testamentary capacity.”

“Testamentary capacity simply means that the person executing the will knows that they are making a will, the effect of making the will, the general nature of their assets and their next of kin, and is able to make a reasonable judgment about these factors,” Hartnett said.

Estate planning attorney John Bauer of Shackelford Melton & McKinley in Dallas explains it this way:

“Mom’s got to know that she’s got a house and basically $100,000 in the savings account and she’s got a car and she’s got three kids. She has to understand those all at the same time. If she’s not mentally competent, then the will’s invalid.”

Show that the person drew up the will under “undue influence.”

That is, the individual signed a will “that they would not have signed but for the improper influence of another person,” Hartnett said.

Bauer’s example: “If the daughter is putting a lot of pressure on the parent and, because of that, Mom relents and she names the child [as sole beneficiary], that’s undue influence.”

But Bauer said the person making the challenge has to prove the undue influence. “She’s got to prove it by the preponderance of the evidence that that indeed happened. That’s a tough proof to make,” he said.

Show that technical details weren’t followed or that the will was forged.

“Was it done under the proper law?” Bauer said. “In other words, when you do a will, you have to do certain formalities. Was the will signed before two witnesses? You have to be 18 or older when you sign the will, and the witnesses have to be at least 14 years of age.”

The timing of a challenge also is critical. A will can be contested before or after it has gone through probate, Hartnett said, but you usually have only two years to file a challenge once one is probated.

“A person who thinks they may need to contest a will should contact an attorney as soon as possible after the loved one passes away,” Hartnett said.

Here’s another critical fact regarding timing of a challenge:

“Before the will is filed for probate, it’s up the executor of the will to prove that the person was of sound mind, above the age of 18 and the two witnesses were above 14,” Bauer said. “Once the will has been admitted to probate, then it’s up to the challenger to prove that the person was incompetent or someone wasn’t of the right age.

“If you think that Mom was incompetent, the time to do it is beforehand because they have to prove by the preponderance of the evidence that Mom was competent.”

A recent change in Texas law benefits heirs.

“In 2007, the Texas Probate Code was amended to provide that an executor of an estate had to notify the beneficiaries of a will that it had been admitted to probate and provide the beneficiaries with a copy of the will,” Lofgren said. “This was a good change to make sure that all of the beneficiaries were apprised of the probate and had a timely chance to oppose the probate.”

Challenges to wills sometimes come not from children, but from a distant relative of the parent, said Ellen Dorn, estate planning attorney at Fanning Harper Martinson Brandt & Kutchin PC in Dallas.

“What I’ve seen is that when a controversy about a charitable bequest arises, it is far more common for that concern or challenge to be raised by a distant relative and not by a child,” she said.

“What you see instead are great-nieces and -nephews — people who knew Aunt Suzie and Uncle Bob were well off, they were very loving, they were very hospitable, they had no kids, and of course they would name their nieces and their great-nieces and nephews in the will,” Dorn said. “They’re disappointed when they see that no, maybe a little token gift is given to the kids, but the bulk of the estate is going to charity.”

Will contests are emotionally charged, and you should think carefully before going ahead with one.

“The advice I would give someone contemplating a challenge is to ask themselves why do you want to challenge the will,” Lofgren said. “Does the will reflect what Dad or Mom wanted to do with their own stuff? Is the money sought really worth destroying your family?”

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