Month: November 2014

MANY HARRIS COUNTY ESTATE PLANNING LAWYERS’ CLIENTS OVERLOOK THIS IMPORTANT ASPECT OF TRUST ADMINISTRATION

One of the most enjoyable parts of being a Harris County estate lawyer is helping clients set up trusts. Knowing that they have the ability to positively impact future generations or even a cause they care about can be a life-changing experience for a person. The fact that estate planning lawyers are a part of it is almost a bonus to the job. There is an area, though, that so many clients forget, and if it goes without being caught, it can cost the trust and heirs a great deal in the future.

Setting up the trust can be a lot of fun. Figuring out how to fund it is deeply satisfying. Naming trustees and heirs is profoundly rewarding. Directing how the funds will be managed is…very often overlooked.

Yes, despite putting so much effort, and even a sense of personal value into setting up the trust, a huge number of people do not think about the importance of how the money will be managed later. If you do not provide guidelines for how the assets of the trust are to be managed, it is quite possible that your family or other heirs will suffer for it.

Here are just a few ways that trust lawyers in Harris County have seen this situation go poorly:

1. Some institution is put in charge of administering the trust, but with little oversight. The financial advisors are given too much freedom to play “fast and loose” with the money, as well as to charge exorbitant fees. This institution and the advisors it hires do not have much concern beyond what they can get out of the trust.

2. A friend or family member is put in charge of the trust with the best of intentions, but unfortunately, he or she does not have the right skill set to manage the funds. This person, though someone you trust, just does not have the knowledge and experience required to make good investments, to minimize tax implications, etc. To make matters worse, if this person’s efforts are not “good enough,” it can anger the other heirs.

3. A “directed trustee” is chosen to look after the trust according to specific instructions from you. These may include professional companies that do nothing but administer trusts. In addition to knowing the organization has experience, you can also provide guidance on the principles that you want followed when it comes to investments and other decisions.

By having your estate planning lawyer include directions for a directed trustee, you can mitigate some of the concerns that come with choosing a family member or giving a financial planner too much leeway to make decisions for the trust. Obviously, you cannot predict how markets will change and what new developments will arise after your death, but you can determine good approaches for now and potentially give your trustee some discretion if and when it is appropriate. Again, a Harris County trust lawyer will be instrumental in creating the language needed to guide the directed trustee and others involved with the trust.

A CLOSER LOOK AT WILLS AND TRUSTS ADMINISTRATION IN HOUSTON

Wills and trusts administration is a big category of law, and it can be a little confusing to understand exactly what it all means. The specifics of this type of work will vary from state to state, so what happens in Texas will be slightly different from how it all takes place in any other state. For the most part, though, wills and trusts administration involves the following:

Assets Passed Under a Will

The wills and trusts administration lawyer in Houston will be helpful to the executor of a will in figuring out what assets are included in an estate. He or she will assist in figuring out what the debts are, as well. Then the entire estate will be guided through the court process known as probate in order for the assets to be distributed appropriately with the will in mind.

Estates Without a Will

Wills and trusts lawyers in Houston can also be instrumental, even when there is no will. They can assist with the probate process, working with the person chosen as the executor to meet all legal obligations. Because there is no will to direct the distribution of assets, the courts will have a bigger say in what goes to whom.

Administering Trusts

This item is a little more obvious, considering we are talking about wills and trusts administration! In cases where there is a trust, the attorney will work with the trustees or beneficiaries to figure out what kinds of rights and obligations will come into play. Working together, the entire team will find ways to meet the requirements of the trust.

Tax Implications

Finally, a wills and trusts administration lawyer in Houston will be instrumental in helping beneficiaries and trustees navigate the myriad of tax implications that come along with an estate. If the decedent created a trust, it may have been for the very purpose of protecting assets from exorbitant taxes in the first place. A good lawyer will continue this trend in order to ensure the trust remains as valuable as possible.

Anyone who has been named as the executor of a will or a trustee should definitely consider hiring an attorney in Texas to guide the process. From probate to appointing an administrator to settling any legal proceedings for the estate, this professional can protect the overall worth, as well as speed the process. They can also assist or make referrals for beneficiaries who find themselves in need of their own advice after inheriting wealth.

WORKING WITH A TEXAS LAWYER TO FUND A SPECIAL NEEDS TRUST

Families enlisting the help of a special needs lawyer in Texas do so because they recognize the importance of planning ahead for their child or other loved one’s future. Unfortunately, a parent or caregiver will not always be around to provide what is needed, and so they turn to the special needs lawyer in order to determine how those needs can be met once they are gone.

Raising a child with a disability is generally much more expensive than raising those with typical abilities. With medical bills, special educational needs, therapy, and more, it can feel like there is just nothing left to save for the future. The caregiver may know that a special needs trust is a good tool for estate planning but worry about how to fund the trust. That is where a good Texas special needs lawyer comes into play.

Funding a Special Needs Trust

In some cases, the funding of the trust is fairly straightforward. The parents’ assets are put into the trust upon his or her death with instructions on how they are to be used. A home may be left to the trust for the child’s needs, or there may be directions to sell the home and use the money for the child’s upkeep. Savings, retirement plans, and other types of funds can also be left to the special needs trust for these purposes.

For a good number of parents and caregivers, there just is not a lot left to tuck away once all the bills have been met. You may be surprised to find out, though, that the situation does not prevent a special needs trust from being created and funded. Special needs lawyers are very adept at working with clients to find alternative ways to do this. For example, there are types of life insurance that can be purchased fairly inexpensively that can be used to fund the trust.

Funding a special needs trust can also be a family or group initiative. With good tax breaks for annual gifts, a few contributors a year can start building an impressive fund for later. By working with a special needs lawyer in Texas, you may also be able to set the trust up in a way that will not interfere with the child’s ability to qualify for government programs and other types of assistance. This would likely not be the case if the parent simply planned to leave assets behind in a will.

Considerations in Planning the Special Needs Trust

It is impossible to know exactly what the future holds for any of us, let alone someone with a disability. The cost of living increases, as does the cost of healthcare…but by how much? Special needs lawyers in Texas can help to make estimations regarding how much money should go into the trust in order to support the child for the remainder of his or her life. Everything from housing to medical equipment to transportation will need to be considered and planned for.

The great news here is that even those who do not have significant funds to contribute to a special needs trust do have options when it comes to planning ahead. A Texas special needs lawyer is the right person to help figure out what those options are.

FAMILY LAWYERS IN HOUSTON USE PRENUPTIAL TO AGREEMENTS AVOID DIVORCE

Family lawyers in Houston, TX are often told that couples who create a prenuptial agreement are basically saying that they plan to get divorced some day. That could not be farther from the truth! Actually, prenuptial lawyers in Houston see first-hand how these important documents can actually help keep a marriage intact…and not out of fear of alimony, either.

Financial problems are one of the biggest causes of divorce in the United States. Couples in love often get married and head blindly into the most complex financial arrangement of their lives. Those who take the time to meet with a family lawyer and develop a prenuptial agreement, however, can almost completely avoid much of the drama that other couples will likely face.

Sure, prenuptial agreements can lay out what happens in the case of a divorce, but more importantly, they can lay out what happens during the course of a marriage. Each partner and their lawyers work together to identify income and assets and then to plan for how it will be handled. Who is in charge of what? Does the money all go into a single pot, or does each spouse keep separate accounts? What means will you use to plan for the future? What about children from a previous relationship?

By addressing these and other financial issues, couples are able to make sure they have compatible expectations before ever walking down the aisle. They can also avoid getting stuck later because they both have a written agreement about how finances will be handled. Instead of seeing a prenuptial as being there in case of divorce, it makes more sense to see it as a means of avoiding that outcome.

Couples are encouraged not to wait until the last minute to talk about a prenuptial agreement. Really, putting together this kind of plan can be a lot of fun, as it allows you to dream together about the future you want and create a plan to reach it. In order to make sure that the prenup is upheld, however, you will want to take a couple of precautions. For example, each partner should have his or her own family lawyer in order to make sure everyone’s interests are being fairly considered. It is also important to make sure that all financial information is disclosed. You are about to get married, after all, there should be trust and honesty between you. And, if there is not…perhaps the planning helped you avoid using the prenup later.

A Special Note About Blended Families

The laws of inheritance are often not flexible enough to account for today’s modern life. For example, a surviving spouse may automatically inherit a deceased spouse’s estate, even if the latter has children. When the second spouse also passes away, the entire estate goes to his or her children due to blood lines, rather than to the step-children. That’s right, children from a previous marriage could end up totally (and legally) without anything. This is an issue that family and estate planning lawyers have seen too many times and one that the prenuptial agreement can account for up front.