Avoid Pitfalls of a DIY Will

old willSelf-preparation kits are becoming more popular but beware the hidden dangers of going it alone.  If you are going to purchase a self-preparation kit or online document, you should only view it as preparation for a meeting with a trained professional – a licensed estate planning attorney.

The growing use of DIY will kits, now more readily available online, is causing concern at a time when the relatively wealthy baby boomer generation start to pass on their assets, or what’s left of them.

The concern is seen most often by probate attorneys who are seeing a rise in their work to unravel the issues with these self-help wills.  These wills frequently include ambiguous provisions that family members dispute over, fail to include provisions establishing the validity of the will or are not executed properly.

We actively encourage all adults to make provision for their future, but most people have unique circumstances that require some modifications to any standard form to avoid confusion and misinterpretation.

Ironically, clients who come to our office most often claiming they just need a “simple will” are those with the most difficult issues to draft around.  Divorces, multiple marriages, a mix of biological, adopted or step children, small business ownership,  or any other complex financial affair or complicated family situation can all lead to complex drafting issues.  Similarly, single individuals with few close family or friends can result in difficulty finding proper people to serve as executors, agents and trustees.

COMMON MISTAKES

Designating executors to handle estate.  If a choice is available you may not want to appoint a friend as an executor if they may not have the financial competence required.  Another problem can arise you designate a person older than you to serve.  They may die before you or be in poor health when you die and unable to handle administering an estate.  Another issue that may raise concerns with your beneficiaries is if you appoint a business partner who might have a conflict of interest with your distribution plan.  If family members are receiving different distributions from your estate, appointing one of them as executor could also raise conflicts of interest.

Finally, be sure you tell your family how to find your will.  All the planning in the world will not help if your loved ones cannot locate the estate planning documents you signed.  Ideally, you should review your plan with all family members together and with the attorney who drafted the document present.  Sometimes despite the best planning and drafting, when confronted by family members the explanation mom or dad gives to the children is not the same as they requested the attorney to draft.  So it is important that the understanding your loved ones receive actually coincides with what you included in your will.

Key points

❏ DIY and online wills should only be used as a planning guide; relying on them leads to problems.

❏ Choose an executor carefully.

❏ Don’t hide your will.

 

Posted in Divorce, Estate Planning, Inheritance, Probate, Safety Deposit Box, Will challenge, Wills | Tagged , , , , , , , | Comments Off

Where Should You Keep Your Will?

safety-deposit-boxI routinely provide my clients with suggestions on where to keep their will and other estate planning documents.  The original will is required for probate.  If only a copy can be found, the testator is presumed to have revoked the will.  Testimony can be presented to overcome that presumption, but it is certainly less risky, much easier and less expensive to present the original will.

Regardless of where you keep your will, it is very important that your family and executor know where to locate your will and estate planning documents.  That location should not be kept a secret unless you suspect family members may not want your will produced.  In that case, only tell your executor where your estate planning documents are and how to reach them if you become incapacitated or die.

Some clients tell me they intend to keep their will and other estate planning documents in their desk at home or in some other home filing system.  If that is where other important papers are kept it may be okay, but simply having important documents kept in such a manner leaves them more open to destruction by theft, fire or other natural disaster.

Other clients use fireproof safes installed securely in their homes.  These are certainly a step up from a simple file folder.  But be sure your family and executor know how to get inside the safe.  That may not mean giving them the combination, but you need to tell them where they can find the combination when they need to get access.

In my experience most clients who tell me where they store their estate planning documents most often mention a bank safety deposit box.  These are very secure.  However, unless there is a joint signer to the box who possesses (or who can obtain) a key, there will be a problem getting the will out of the box after the testator’s death.

The best way to solve this problem is to have at least two people at all times who can access the box.  This works well for married people, but once one spouse has died, the surviving spouse or any single person should think about providing joint access to another person so that when the second spouse or single person dies, getting the will is easy.

If you decide to have a person (other than a spouse) sign as a joint registrant on your safety deposit box be sure you select someone you have great trust in.  You may want to think long and hard about whether to select a relative who would receive an “intestate share” as an heir if you died without a will, but who will receive nothing if the will in the safe deposit box is probated.

If no joint registrant is on a safety deposit box, they cannot locate the key or the joint registrant is not available, the safety deposit box can be accessed by obtaining an order from the appropriate probate court.  Practically, it may be wise to speak with the bank where the safety deposit box is located to determine if they have any preferred method for proceeding.  An experienced probate attorney can then advise how best to proceed.

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Spousal Protections in Texas Probate

widow-and-childrenMany people think there is no reason to have a will because the surviving spouse will inherit everything from a deceased spouse.  But in many cases where there is not a will, that is not the case.  Particularly when the decedent’s property was his or her separate property or where the decedent had children not from the current marriage.  Even if there is a will, the decedent may have left much or all of his or her property to someone other than a spouse.

So what is a surviving spouse to do when it turns out that much of the decedent’s estate is not left to the surviving spouse?  What rights does the surviving spouse have?  Texas law provides a few protections just to protect surviving spouses in situations like these.

The Probate Homestead.  If the primary residence is owned, the surviving spouse may qualify for a probate homestead upon the passing of their spouse. This means the surviving spouse may live in the residence until his or her passing regardless of whether the home was left to them. The surviving spouse will have certain financial responsibilities if they wish to continue living there – payment of real property taxes on the residence and mortgage interest.

Exempt Property Set-aside.  Texas law allows a court to set-aside the homestead and exempt property for the use and benefit of the surviving spouse (also for minor children, unmarried adult children remaining with decedent’s family and any incapacitated adult child).  This property is exempt from creditors’ claims. The Texas Property Code describes what is exempt property.  If the decedent did not own all items described as exempt property, the court may grant an allowance in lieu of the items described as exempt property that are not a part of the decedents property.  This allowance may not be greater than $45,000 in lieu of a homestead and not be greater than $30,000 other exempt property.

Family Allowance.  Texas law provides for a family allowance for the surviving spouse, minor children and adult incapacitated children. It is meant to be a sufficient amount for their support and maintenance for one year from the decedent’s date of death and takes into account the separate property the applicants have to maintain themselves.

As you can see, these protections are not intended to support the family left behind long term, but may serve to allow the family to get along until the estate can be settled or other arrangements made for ongoing income.

Posted in Community Property, Debts, Estate Planning, Exempt property, Family Allowance, Homestead, Probate, Separate property, Wills | Tagged , , , , , , , , | Comments Off

Husband dies with no will, leaving wife with inheritance questions

Ron Lipman is a Houston attorney that I have turned to for assistance on various legal matters.  He writes a column for the Houston Chronicle and recently addressed a question on inheritance rights in Texas.  Here is that article.

houston-chronicle1

Q: My husband and I were married for 48 years when he died without a will. We have one child together. He was married previously and had two children by that marriage, but they were adopted by their new stepfather over 50 years ago. Are those two children still considered my husband’s legal heirs? The only asset in my husband’s name is our community property home that we have owned for decades. I need to have his name removed from the deed to sell it. How can I accomplish this?

A: Under Texas law, your husband’s two children from his prior marriage are considered to be his heirs, and they do inherit from him, with one exception.

That exception applies if your husband’s parental rights were terminated by a court and that court eliminated the children’s inheritance rights. Therefore, you need to find the paperwork associated with the adoption of the two children back in the 1960s to see what the court’s order stated.

If your husband’s two children do inherit from him, then your child will also inherit from him. The three children would become equal owners of your husband’s half interest. But if the two children don’t inherit, then your husband’s half of the home would pass entirely to you (and your child would not inherit).

Clearly, it is important for you to find out what the court order stated before you do anything else.

You also need to understand your homestead rights as a surviving spouse. When your husband died, you became entitled to live in the home for as long as you want (assuming the two of you never signed a marital property agreement to the contrary). No one can force you to move out, even his two children if they did inherit a portion of the home.

Therefore, if your husband’s half of the home did pass to the three children, you might want to consider not selling the home. When you move out, you forfeit your homestead right.

With regard to your second question, removing your husband’s name from the deed might not be necessary. Instead, you might simply need to establish who owns the home in a manner which is sufficient for a title company to insure title when you sell it.

An Affidavit of Heirship might be good enough, or a Small Estate Affidavit might work. If you have to go through probate, it will be very complicated and expensive because your husband died without a will. You would therefore be best served by talking with a title company or an attorney to determine which approach is the quickest and least expensive way to clear up title.

Ronald Lipman, of Houston law firm Lipman & Associates, is board certified in estate planning and probate law by the Texas Board of Legal Specialization.

Problems like these can be avoided by having a well prepared will.  If you or your spouse have children from a prior marriage, it’s very important that you prepare a will.  Otherwise, you too may be in a situation like this lady.

Posted in Community Property, deed, Divorce, Estate Planning, Homestead, Inheritance, Marital Agreement, Probate | Tagged , , , , | Comments Off