August is Make-A-Will Month

make-a-willFor many people making a will isn’t the most pleasant of tasks, and consequently, too few people do it. According to many surveys most people don’t have a will.  The biggest reason cited by many: They just never got around to it. Some said they didn’t want to think about death.

As I’ve written before, many people think wills are only needed by the wealthy.  But almost everyone can benefit from having a will.  Do your children have a guardian designated to care for and raise them if you and your spouse pass away while your children are minors?  Some people think their property will go to their family and that is who they want to receive it, so why should they have a will?  First, state laws about where your property will go may not pass it to the person you think will receive it.  Second, even if it does eventually get to those people, probate of your estate is most likely going to be more expensive and time-consuming if you don’t have a will.

So what does it take to make a will?  Think of who you want to handle paying your bills when you pass away and to distribute your estate.  Think of who you want to be the beneficiaries of your estate.  And if those beneficiaries don’t survive you, who should get it next?  If you have children, who do you want their guardian to be when you and your spouse pass away?  Once you have those questions answered, you are ready to begin.  Call a good estate planning attorney and talk over what the process is.  It isn’t hard and pretty soon you will have your will prepared and feel much more confident that your estate will be handled as you wish when you pass away.

If you are in Dallas, Denton or Collin Counties, give our office a call for an appointment to discuss your objectives.  We will be happy to help you this month or any other month of the year.

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Do You Really Need A Will?

old willI sometimes hear single or divorced clients say they don’t think they need a will.  A recent case demonstrates why that conclusion is likely erroneous.  Decedent’s siblings claimed that they should have inherited his estate.  And they likely might have had a valid claim, but in this case decedent had prepared a will leaving his entire estate to his lifetime companion with whom he lived for decades.  The court affirmed the validity of the will.

If you are single or divorced, you at least should discuss with an estate planning attorney to whom you wish your estate to go upon your death.  You may assume it will go to certain people, but the laws of Texas may direct it otherwise.  A will is a way of assuring yourself that your estate will go to those you wish it to upon your death.

Estate of Grogan, 595 S.W.3d 807 (Tex. App.—Texarkana 2020, no pet. h.).

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Avoiding Lost Documents

documents-2I frequently hear from clients who inquire about probating their family member’s estate that they cannot locate important documents of the deceased family member even though they know the documents existed.  So, what can you do to avoid this situation when you die?

My first recommendation is that you discuss your desires with your family.  If you want specific items to go to particular individuals at least communicate that to all the pertinent family members.  Better yet, write it down in a list with detailed descriptions of each item.

Next, compile folders or a binder of information for your executor, trustee or other family members and tell them where this information is kept.  Those folders or binder should include at least the following:

  • Will or trust documents, including any amendments you have executed.  If this is not the original, include a note explaining in detail where the originals are located.
  • Copies of all “Impaired Judgment Documents” you executed.  These might include a general power of attorney, a medical power of attorney, and a Directive to Physicians (sometimes referred to as a living will).
  • Login information (usernames, passwords, PINs, answer to security questions, etc.) for your digital assets.  Digital assets can be virtually anything you can access through the Internet or an electronic device like financial accounts, cloud storage services, social media services, etc.)
  • Contact information for professionals you have used like your attorney, CPA, insurance agent, financial advisor, etc.
  • Contact information for your close family and friends.
  • Remains-handling instructions including any documentation of funeral or memorial planning you have done, and contacts involved such as cremation or burial contracts, funeral home and location, preferred clergy, organ donor documents, etc.
  • Obituary or background information about you, pictures and preferences you have for where those who wish to memorialize you might make donations.
  • Contact information for employers where you might have been receiving benefits or be entitled to post-death benefits such as life insurance, pension, 401(k) or other savings plans.
  • Copies of life insurance, annuity, social security, Medicare, pension or other similar documentation.
  • Information on bank and other financial account locations, account #s, credit lines and credit card information and location of safety deposit box and key.
  • Copies of birth certificate, marriage license, divorce decrees, real property deeds and similar important legal documents.
  • Tax returns.

This may seem like an overwhelming task, but you probably have most of this information somewhere now.  A good start is to either move it all into one file cabinet or at least make a list describing where all these items can be located.  Your family will be very grateful that you made the effort.

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Where Is My Power of Attorney?

hidden_filesIt 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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Is Your Will Up-To-Date?

old willPreparing a will is one of the best ways to be certain that upon your death your property will be distributed according to your wishes. What many people don’t realize, however, is that keeping your will up to date is as important as having a will. That’s why you should review your will periodically. As long as you have testamentary capacity (i.e. you’re mentally competent), you can make changes to your will.  You can change it a little, change it a lot, or completely revoke it, any time you want.  However, it is imperative that you work with a qualified estate planning attorney so that your changes are legally valid and will be understood by your executor, the courts, and your beneficiaries.

Beyond simply reviewing your will every five or six years, what events might trigger a need to change your will?

Marriage, divorce, and remarriage
Life events can have a major impact on financial planning documents. For example, if a widow or widower remarries, it is important that the will is updated to show how the children from the previous marriage and the new spouse should be provided for in the will.  And a divorce quite often changes a person’s view of who they want to receive their property upon their death.

A new heir
Updating a will is especially important when you have a child, because your will allows you to name a guardian to care for your child in the event that something happens to both you and your spouse. If you don’t name a guardian for your child, the courts will appoint one and it may not be whom you would have selected.  If a family member is diagnosed with a condition that might make them a candidate for government assistance programs, a special needs trust might need to be added to a will to prevent bequests from disqualifying that family member from the benefits they are entitled to.

Death of someone named in the will
The death of a named executor, guardian, beneficiary, or trustee signals a need to make changes to those provisions in your will.

Substantial increase/decrease of net worth
If you win the lottery, get a large personal injury settlement, or receive a large inheritance, additional tax planning might be necessary to minimize the tax bill on your estate. On the other hand, a significant decline in your financial assets might dictate altering your specific bequests or making other modifications.

Life relocation to another state
If you relocate, you should have an attorney in the state of your new residence review your will. This is especially important if you move to or from a community property state. Although all states recognize a will that was properly created in another state, there may be some nuances that need to be addressed.

Tax law changes
Updating your will allows you to take advantage of recent developments and new techniques in estate planning. With recent increases in the federal estate tax exemption, the tax planned wills many people did to minimize estate tax may now create needless and serious problems for their estates.

Changes to your intentions
Changing your mind about something in your will should be handled as soon as you’ve decided. From adding a new beneficiary or charitable donation to second thoughts about your executor or the guardian of your children, be sure to make these changes on a timely basis. If your revised intentions do not make it into print, they will have no legal effect.   And be sure your memory of what is in the will matches what is really in it.  Sometimes our recollection of what is in the will does not match what we actually put in there many years before.

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