Houston Wills and Trusts

Monday, December 19, 2011

Two Common Houston Estate Plan Myths -- BUSTED

By: Kimberly Hegwood, Wills and Estates Lawyer in Houston, TX

As of this writing, it's a fact that almost 60% of Americans do not have a basic will, and that is a big problem.

One of the big reasons that most families don't yet have this kind of plan in place is because of some incorrect thinking about whether it is right for them, or if it is even necessary. And sure --some people just have not gotten around to creating a will or trust. Others think they don't need an estate plan because they are not "rich".  

But here is the problem--if you continue without an estate plan, you could leave a legacy of bad feelings and attorneys' fees.

So I wanted to speak to some of the more common misconceptions out there. I will start with a couple big ones this week, and when the time is right, address a few more in 2012...

MYTH #1: Only rich people prepare estate plans.

Do you own ANYTHING? Because if so, you need a will. You see, a will allows you to designate who will receive your property should anything happen. Continuing without one ensures that your assets will be distributed under the terms of your state's "intestate succession" laws. That means your money and property could end up with family members you have not spoken to in years, instead of who you would really like to see control your assets.

I won't go into all of the different components of a will, trust, medical power of attorney, directive to physicians, etc., as my purpose here is to emphasize that failing to plan is simply a decision to trust your assets to government bureaucrats who do no know you from Adam.

Even if you think your situation is pretty straightforward, you may feel more comfortable hiring a lawyer to guide you through the process.

MYTH #2: Everything goes to your spouse, if something happens.
 

Unfortunately, that is not always the case. We deal with clients from different states around the country, and state laws vary. In fact, in most states, if you continue without a will (intestate), your inheritance will be divided among your spouse and your children. In New York, for example, when someone dies intestate, the spouse gets the first $50,000 of the estate and what is left is divided 50-50 among the spouse and the children.

You can imagine how this could create all kinds of problems, particularly if your spouse was financially dependent on you or you have children from a previous marriage.

I will send a few more in the future, but I hope you can already see that things are not always as we "think". And don't miss the chance to take advantage of the time and focus you will already be applying to your preparation for tax season, by moving towards getting your estate plan done (or updated) in 2012, after you have already done the hard work of gathering all of your documents. It is actually the perfect time for it.

Wednesday, November 30, 2011

How You Can Work With A Houston Elder Law Attorney to Shield Your Assets From Nursing Home Costs

Many Houston seniors are making strides toward estate planning by working with their elder law attorneys to set up what they believe are the appropriate wills and trusts.  The goals with this type of planning are most commonly to:

• avoid probate,
•  make decisions regarding trust administration,
• and—most importantly—to protect your assets for your heirs. 

Unfortunately, this final criteria isn’t always met in traditional wills and trusts.

The problem stems from long-term care.  When you set up your initial estate planning documents, such as a revocable living trust, you probably fully intend to outline your wishes for how your estate will be dispersed upon your death.  Unfortunately, this document does not protect your assets from creditors, lawsuits or the incredible costs associated with nursing home care.

In order to pay for that care, your entire estate can be at risk.  Your assets will be used to pay for your medical and other needs, potentially leaving little or nothing to be administered in your trust.  This means that even if you have a legal document directing how your assets should be distributed, it will be referring to assets that were already sold off to cover expenses.  As nursing home costs continue to rise, we see more and more of this in Houston.

To avoid this situation, it’s often necessary to work with an attorney who focuses on elder and long-term care planning, in addition to traditional estate planning.  If it appears your estate is at risk of being wiped out due to unexpected illness, incapacity or long-term care costs, your attorney can work with you to create the right kind of trust that will adequately shield your assets during your lifetime, and after death.

To learn more about how seniors around the country are engaging in long-term care planning to shield their assets from the skyrocketing costs of nursing home care, consider discussing this option with your Houston elder care or estate planning lawyer.

Friday, September 23, 2011

Will Lawyer In Houston Explains the Basics of Estate Planning and What That Means For YOU

When a person with assets over $100,000 passes away, their assets will be handled in one of three ways:
 
(1) if they had no will, their assets will be distributed as mandated by the Texas probate code through a court proceeding called probate;

(2) if the person had a valid will, the estate will still have to go through the Harris County probate process, but the court will carry out their wishes as stated in their will; or

(3) if the person had a valid living trust (and their assets were re-titled in the name of their living trust), their wishes would be carried out in private, without the court's involvement. 
 
So ... why does it matter to you? 

The answer to this question depends on how much you care about what your loved ones have to deal with after you are gone and how much control you want to have as to who gets what, and when and how they get it. 
 
If you do nothing, you get no input on any of these questions and the court and one of your eager family members/friend/creditor who petitions the court will make these decisions on your behalf through a process called probate.  Why do you care about probate?  Often, the probate process can take 6-12 months, can be extremely costly, and the process is completely public.  The probate process can often lead to squabbling between family members and airs the family's dirty laundry. 
 
If a person leaves a valid will, it will still have to go through the probate process described above, but the court will have the benefit of knowing how you want your affairs handled.  Instead of relying on the laws of intestate succession (which is the law that distributes your assets to your family members in the order of their relation to you), the court will pass on your assets to the specific people you have identified in your will. 

Through a valid will, you can control WHO gets your assets, but you will have no control as to HOW and WHEN they get it.  
 
A living trust (that has been properly funded), on the other hand, gives you more control.  If you are working with an attorney who has expertise in this field, you can control WHO gets your assets, and WHEN and HOW they get it without the court's involvement.  Even better--with a living trust, it is a private administration and can generally be handled in a short period of time.    
 
You may be asking yourself: why would someone in Texas ever do a will instead of a living trust?  Typically, a person will choose a will over a living trust for one of two reasons:

(1) they don't know the difference between the two, or
(2) the "cost" of doing a living trust.  
 
There are some obvious advantages to doing a living trust over a will, but starting with something is better than nothing.  If you are not yet ready to make a leap into the world of living trusts, a basic, will-based estate plan is a starting point.  In addition to giving the court direction about how you want your assets distributed, a will-based estate plan should also include your advance health care directive (which identifies the person(s) that will make health care decisions for you, if you are incapacitated) and a durable power of attorney (which identifies the person(s) that will make financial and legal decisions, when you can't). 

While we all care about what happens to our assets, every person over the age of 18 needs to have an advance health care directive and durable power of attorney.

Friday, September 16, 2011

Houston Estate Planning for Senior Citizens – It’s About Taking Care of Your Loved Ones

I hear the same excuse over and over….

I don’t have an “estate.”

I have more debt than assets.

The only thing I have is my home.

As you may have guessed, these are excuses that people make for not preparing an estate plan. These people are sadly misinformed. They think estate planning in Houston is only about money. Estate planning does take care of financial issues, but the way I see it, the most important reason for doing an estate plan is for the benefit of the people that you leave behind.

Estate planning in Houston is essential for senior citizens who are concerned about the well-being of their loved ones. No matter what your level of wealth happens to be, there are decisions that will have to be made if you become incapacitated or when you pass on.  If you don’t leave detailed instructions for the type of medical care you want or what to do with your things, you will be putting those you love most in the position of being a mind-reader. They will have to do their best to figure out what you would have wanted and then deal with the consequences such as unhappy family members who disagree with them. Do you really want to cause this type of stress for them at a time when they are already upset and mourning?  I doubt it.

I realize thinking about these things is not easy or fun, but approaching it in an organized manner may help. Here’s a list of things to consider when planning your estate:

1. Talk to close family members and let them know how you would like to handle the dispersal of your assets and sentimental items. Also, talk to them about the type of medical care you would like to receive should you become incapacitated. Chances are, if everyone knows your plans ahead of time, there will be fewer arguments and a lot less stress.
2. Prepare a list of all of your assets including your home, your financial accounts, insurance policies and any personal possessions.
3. Make a list of everyone that you would like to be a beneficiary of your estate. You may also want to include organizations that are meaningful to you.
4. Plan for how you would like your pets cared for if something should happen to you.
5. Make a list of passwords, PIN numbers and other codes that someone might need.
6. Think about who you would like to put in charge of your medical care and who you would like to oversee the dispersal of your assets. You can appoint different people for these critical jobs.
7. Consult with an experienced estate planning attorney who can offer advice about how to arrange your estate so that the person you put in charge of your financial and medical decisions will have the fewest complications.

These steps alone will go a long way in reducing the stress that your loved ones will experience. Isn’t their well-being enough reason to do an estate plan?

If you answered “yes,” then be sure to give our Houston wills and trusts office a call at (281) 218-0880 and ask to schedule a Lifetime Legacy Planning Session.  These comprehensive sessions are normally $750, but you can come in absolutely free with the mention of this article. However, this offer is limited to the first 10 responders so call today!

Tuesday, August 09, 2011

Trust Attorney in Houston Offers Practical Considerations When Choosing an Administrator

Trust administration in Texas is more complicated than many people realize. So, when deciding whom to name as your administrator, you may want to explore other options besides a close family member or your best friend.

In my experience as a Houston trust attorney, I’ve actually found that the best place to start is by going through the general qualifications that a trust administrator should possess.  From there, you can think through your list of family and friends and choose someone whose personality and financial savvy make them the right fit for the job.

One of the most important qualifications to start with is trustworthiness.   This is an essential requirement, considering your administrator will be privy to all your financial information and will manage your estate upon your passing.  

You should feel confident knowing that your administrator will distribute your assets and manage your affairs as you’ve indicated, rather than use the proceeds of your estate as if it were their own personal bank account.  Thankfully, there are a number of laws intended to keep this type of financial abuse in check, but it still does happen and it’s hard to recover the proceeds of someone’s estate once they are gone.

Fair-mindedness is another trait a trust administrator should possess. Throughout the administration process, you’ll want your beneficiaries to be treated fairly and equally.  You don’t want to run into a situation where someone you’ve appointed shows favoritism towards certain family members and distributes your assets accordingly.

Another characteristic of a good trust administrator is loyalty-- to the trust and to the heirs. In a way, he or she is the keeper of the final wishes, and part of their job is ensuring that these wishes are carried out as set forth in the will or trust.

Finally, you’ll want to choose an administrator who is strong-minded and cool under pressure. Following the death of a loved one, emotions can run high among the heirs. A favorite gravy boat can take on epic proportions when everyone thinks it should go to them.

Sometimes greedy beneficiaries believe their share is short. Other times, heirs think they should be getting their money immediately, either not realizing (or caring) that debts, liens, and other considerations have to be satisfied before any funds can be distributed.  Tensions can run high and your administrator should be prepared to keep such squabbles in check should fights break out regarding the terms of the trust.

While choosing a trust administrator is no doubt a tough decision to make, we are here to help guide you through the process.  Please do not hesitate to reach out to us as a resource if you need assistance setting up a trust and ultimately choosing an administrator to manage your estate upon passing.  Simply call our Houston estate planning office at (281) 218-0880 to set up a complimentary Lifetime Legacy Planning Session.

Friday, June 03, 2011

A Houston Wills and Trusts Lawyer Offers Advice for Newlyweds

By: Kim Hegwood, Houston Wills and Trusts Lawyer

In the midst of finding the perfect dress, choosing a venue, and tasting countless cakes, Houston newlyweds often overlook the importance of finding a reputable wills and trusts lawyer.  It’s easy to get caught up in planning for the wedding and to forget about planning for the marriage!  Really, though, the beginning of your new life together is exactly the right time to start your estate planning.

Perhaps you think it’s unnecessary because you don’t have what you would consider an “estate.”  Wills are not just about leaving property to your (potentially not-even-born-yet) children, however.  They help protect you and your new spouse, as well as other family members, should something unexpected happen.

Living Wills

Living wills are a powerful example of why newlyweds need a wills and trusts lawyer.  A living will declares your wishes in case you are unable to make them clear on your own.  Would you want to live on life support?  Do you wish to donate your organs?  Are there medical procedures that you absolutely would not want to undergo?  Your attorney can help you draw up the paperwork that makes your wishes clear and relieves your new spouse of trying to make those very difficult decisions in what would likely be the worst time of his or her life.

Along with a living will, you will likely also need to create powers of attorney.  These will designate who is able to make decisions for you, both medically and financially.  In many cases, this will be your spouse, but what would happen if you were both unable to make quick decisions for yourself?  A Houston wills and trusts lawyer will help you create these important documents according to our local laws and regulations.

Probate

If you should suddenly pass away, would your spouse or other family members have access to your insurance?  Your bank accounts?  Your property?  The answer is not as obvious as it seems.  Your estate could easily end up in Harris County probate, meaning that those who should inherit from you are denied access for months or even years.  Putting an estate plan in place can help relieve some of this burden while speeding up the process for your loved ones.  It can also save them considerable amounts of money.

A Houston wills and trusts lawyer will help you make sense of what needs to be done, and the process is actually far easier than many people imagine.  It’s also less expensive than you might think, and certainly less expensive than having your new spouse or family denied inheritance that should rightfully be theirs.  Just consider it one more administrative task that needs to be taken care of as you add your spouse’s name to your accounts, get a driver license with your new name, or take care of the other paperwork that comes along with being a newlywed.

At Hegwood & Associates, PC, we often work with newly married couples to create a plan that works now, but also takes into consideration your wishes and plans for the future (i.e. children, acquisition of new assets, business growth).  To get started, simply call (281) 218-0880 and request a free Lifetime Legacy Planning Session ($750 value). However, these sessions are limited to 10 per month so call today!

Thursday, May 26, 2011

Updating Your Will with an Estate Planning Attorney in Houston

As an estate planning attorney in Houston, I commonly see people who understand the importance of the initial estate planning but then forget that they need to keep their wills and trusts up-to-date.  These documents aren’t something that should just be done once and then tucked into a safety deposit box never to be visited again.  Actually, there are several times in the course of your life that you need to dig out your wills and trusts and make changes.

·Marriage – Obviously, when you get married, you will have a new spouse to consider when it comes to things like inheritance, living wills, and powers of attorney.

· Divorce – If you don’t relish the thought of your ex receiving your estate, you may want to meet up with your Houston estate planning attorney to make some changes.

· Children – The addition of a child should trigger a need to reevaluate your will and other documents.  Estate planning is often thought of as a way to care for your children after your death, and that can only be done if you keep your documents current with the birth of each child.

· Purchases – If you acquire new assets, whether in the form of real estate or something else of value, you will want to call your estate planning attorney to be sure it is covered in your will.

· Health – You may find that certain health conditions cause you to reconsider the wishes outlined in your living will.  This ensures that your loved ones and healthcare providers are apprised of your decisions.

· Insurance – Over the course of your insurance policy’s life, you may find that you want to change the terms, such as the type of coverage you have or the beneficiaries of your policy.  When changes like this occur, it is important to have an estate planning attorney reflect that in your legal documents.

A Houston estate planning attorney will be current on federal, state, county, and city laws and will be able to guide you as you keep your wills and trusts up-to-date.  This protects you and your beneficiaries and can actually keep your will from being invalidated after your death.

So if it’s been awhile since you’ve updated your estate plan, I invite you to give our office a call and schedule a complimentary Lifetime Legacy Planning Session to have your documents reviewed ($750 value).  Simply call (281) 218-0880 to get started.

Thursday, March 24, 2011

Houston Estates Lawyer Offers Advice on Talking to Your Parents about Their Estates

As a Houston estates lawyer, I know how common it is for each generation to avoid planning for their deaths.  Few people are eager to spend time thinking about their own mortality, including the parents that raised and cared for us.  Unfortunately, not spending a little time with a Houston estates lawyer can end up costing more than just a little time.

Discussing estate planning with your parents can be tricky.  Neither of you wants to think about the fact that they will one day pass away.  Not only that, but you likely don’t want to look greedy or uncaring.  That’s why you should approach the topic in a way that lets them know you have their best interests at heart.  Here’s two important things to keep in mind:

1. Estate Planning Protects your Parent’s Legacy

One of the most important things to remember when you’re discussing an estate is that it will be your parent’s legacy.  It is not the only way they’ll be remembered, but it does give them the opportunity to have a say in what becomes of the assets they worked so hard to acquire.  An experienced estate planning lawyer will be able to show them more options than they likely ever realized were possible.

2. Estate Planning Protects the Beneficiaries

Just because you’ve grown and gone out into the world doesn’t mean that your parents don’t still feel the need to “parent” you.  Taking the proper steps to plan their estate means that they can lessen the burden on their children and grandchildren at what is sure to be a difficult time.  Let your parents know that you want to follow through on their wishes, and by planning in advance, you can make sure that happens.

Acknowledging that our parents won’t always be here is a difficult thing to do, but it is a necessary part of preparing for the future.  By introducing the topic in terms of protecting their legacies and their beneficiaries, it is possible to turn the conversation into one of empowerment.  Once the subject has been brought out into the open, it’s best to take steps to speak with an experienced Houston estates lawyer to make everything official.

Thursday, March 17, 2011

Estate Planning for Houston and Beyond

Whether you live in Houston or Twodot, Montana, the need for estate planning is the same.  Sure, there are some laws that vary a bit from state to state.  Americans in general, though, need to prepare their estates in order to protect both their assets and those they wish to receive them.

If it mirrors the national average, then estate planning for Houston is only at about 35%.  That means that 65% of Americans have not yet prepared for what will happen to their assets when they die.  These assets might include cash, stocks, bonds, real estate, insurance policies, and even personal items and heirlooms.  Without proper estate planning, none of those things are well protected.

The first step in estate planning is to make a list of your assets.  This can then be used to create a last will and testament.  It’s generally best to meet with a Houston estate planning attorney, especially if minor children are involved.  In addition to figuring out who gets what item, this attorney can help you set up trusts and guardianships for those children.

Whether you have young children, adult children, or none at all, it is also important to create a living will.  This document allows you to make choices about your medical care should you be unable to explain them yourself due to illness or injury.  This explains to doctors the proper course of action to take, according to your wishes, even though you are unable to discuss it with them at the time of treatment. 

Estate planning for Houston residents should consider this vital information, including a power of attorney that officially transfers your decision-making authority to the person of your choice when needed.

Finally, it will be necessary to name someone as the executor of your will.  When you pass away, this person will handle the administration of your last will and testament, as per your instructions.  When conducting estate planning for Houston residents, a qualified estate lawyer will ensure that this executor is given the appropriate legal authority.  In some cases, the attorney may actually be the appointed executor.

Friday, March 04, 2011

Houston Wills and Estates Lawyer Discusses 3 Easy Ways to Protect Your Kids in an Emergency

Imagine being involved in a serious accident or suddenly dying without the authorities or medical personnel knowing that you have minor children waiting for you at home.  

Now imagine your children waiting for hours upon hours feeling scared, confused and helpless while their babysitter or other caregiver scrambles to figure out what happened and why you never returned.

Even worse, imagine social services removing your kids from their home during this devastating time because they can’t find legal documentation that says who the kids are permitted to stay with if something happens to you.

Scary thought, isn’t it?  Yet as a Houston wills and estates lawyer, I know that far too many area parents set themselves up for this devastating situation by not having the right emergency plans in place should the unthinkable occur.

Fortunately, there are 3 easy steps you can take right now to make sure your kids are protected if something happens to you. They are as follows:

1.     Legally document your choice of guardians- This is obviously the most important step in making sure your kids are cared for by the people you want, in a way you want, if something happens to you.  In addition to naming someone who can take care of your kids on a long-term basis, you’ll also want to name short-term guardians who can immediately show up and support your kids if the unthinkable happens.  Without such documentation in place, the authorities will have no choice but to place your kids temporarily into the care of social services until a judge can make this decision on your behalf.

2.     Carry a Guardianship Card in Your Wallet- This is such an easy, yet commonly overlooked step that will spare your children from hours of worry and anxiety if something unexpectedly happens to you.   Essentially, you are going to create a card for your wallet that lets the police or medical personnel know that you have minor children at home.  It should include your address, phone number and any other pertinent information necessary to get in contact with your kids.  Finally, the card should include your guardianship instructions so the authorities know exactly what to do if tragedy strikes.  .

3.     Leave detailed instructions with schools, babysitters and neighbors- Once you legally document your choice of guardians, it’s critical to leave such information with your child’s school, babysitter and even the next-door neighbors.  That way, if the police show up at your door, someone will have tangible, legal proof as to where you want your children should go in an emergency.

Yet again, it all starts by legally documenting your choice of guardians so someone has clear permission to care for your kids if something unexpectedly happens to you and/or your spouse.

If you have not yet documented your choice of legal guardians and are not quite sure how to start, I invite you to give our Houston estate planning office a call at (281) 218-0880 and schedule a Lifetime Legacy Planning Session.  These sessions are normally $750, but you can come in free with the mention of this article. Simply call (281) 218-0880 to reserve your spot today.

Wednesday, February 23, 2011

Your Questions About Living Trusts | Houston Trust Attorney

"Isn't a Living Trust just for the very wealthy?"

Nope. A Living Trust helps anyone protect his or her family from unnecessary probate fees, attorney's fees, court costs and federal estate taxes. In fact, if your estate (homes, cars, bank accounts, intangibles, etc) is greater than $100,000, you will find a Living Trust offers substantial benefits for you and your family.

That happens to include the vast majority of homeowners, and, likely, YOU!

"Will the 'Living Trust' regulations be some kind of loophole which the government will eventually close down?"

Thankfully, the Living Trust has been authorized by the law for centuries. The government really has no interest in making you or your family go through a probate ... which will only serve to further clog up their already-overloaded legal system. A Living Trust avoids probate so that your estate is settled exactly according to your wishes. It does so NOW, and will do so for decades, and centuries hence.

By: Kim Hegwood, Houston Trust Attorney

"Can just any attorney create a Living Trust?"

This is somewhat self-serving, but the simple fact is, well, no.

You should choose an attorney whose practice is focused on estate planning. Good estate planning attorneys receive continuing legal education on the latest changes in any law affecting estate planning, allowing them to provide you with the highest standard of estate planning service anywhere.

The simple fact, further, is that even many estate-planning attorneys don't take the time to keep abreast of what changes DO come about in the different codes which affect Living Trusts...and, unfortunately, get their clients into problems which would not have happened if they stayed on top of things.

And yes...of course, that is a big focus for me and my firm. We are on top of these issues so you don't have to be!

"Can I set up a Living Trust once and leave it alone?"

My answer: NO!  This is a common misconception. 

A living trust is a living document, which means it needs to be updated throughout your lifetime due to changes in the law, changes in your assets and changes in your life. If it has been more than three years since you have reviewed your trust with a Houston Trust Attorney (and the title of your assets), you had better give us a call to make sure everything is still in place the right way; otherwise, a lot of that time and money you invested in your estate plan could unfortunately be wasted, or a lot less effective than intended.

Wednesday, February 23, 2011

Houston Wills Lawyer: If You Care About Your Inheritance, Name Beneficiaries!

By Kimberly Hegwood, Houston wills lawyer

As a Houston wills lawyer, I know that many people think about…and even openly discuss who they want to receive their possessions if something unexpectedly happens to them.  They truly believe their expressed wishes hold legal weight and their family can use these directions to distribute their estate accordingly following their passing.

Yet merely expressing to loved ones who you want to inherit your estate and actually documenting your choice of beneficiaries in a will are two very different things in the eyes of the law!

That’s because your undocumented “wishes” will not keep your estate out of probate court.  The law is very clear that if you die without a will in place, the decision as to who gets what following your passing is no longer yours to make.

Instead, when an estate goes through probate court, a judge (who doesn’t know you or your wishes!) will have the responsibility of distributing your property directly to your surviving heirs (as defined by the Probate Code) as he or she sees fit.  This can be a problem for a number of reasons.

First of all, your “heirs” may not be your desired beneficiaries.  You may have wanted to leave your property or other affects to a friend, partner or even a distant relative much further down the bloodline.  Or perhaps you thought about leaving some money to your heirs upon your passing, but you also wanted to leave a few specific assets to your favorite charitable organization.  Either way, without having such specific wishes in writing, a judge would have no choice but to leave your assets to immediate heirs if there were no beneficiaries named in their place.

And even if you did want your biological heirs to inherit your entire estate upon your passing, allowing the probate judge to make such determinations is still problematic in that you have no say as to who specifically gets what if something happens to you (e.g., Mary gets the car, Billy gets the house, Sally gets the family heirloom collection).

Finally, it may be the case that you don’t want a certain heir to inherit any of your estate upon your passing.   The decision to disinherit an heir can be made for a variety of reasons, but unless you also spell this out in writing, he or she may still have legal claim to the assets you wanted to prevent them from getting their hands on.

Therefore, it’s extremely important that you take the time to make your wishes about beneficiaries known in your will or other estate planning documents while you are still alive and well to handle such matters.  Remember, you’ve worked hard to acquire everything you own and it only makes sense that you are the one who designates who gets what if the unexpected happens.

If you’re not sure how to get started documenting your end-life-wishes so they hold up in a court of law, give our Houston estate planning and probate office a call at (281) 218-0880 and schedule one of our Lifetime Legacy Planning Sessions. These sessions are normally $750, but you can come in free of charge with the mention of this article. However, this offer is limited to the first 10 callers so make your appointment today!

Thursday, February 17, 2011

Houston Will and Trust Attorney Discusses the Truth About Online Legal Options, etc.

By: Kimberly Hegwood, Houston Will and Trust Attorney

Why do so many families end up with a big fat mess on their hands in dealing with their estate when there is a change in circumstances? Well, here are two reasons to start...

1) Going it alone with "cheap" online options
 
Did you know that many lawyers like to joke to one another about how good those online legal programs (LegalZoom®, Pre-Paid Legal®, etc.) are for our business? Why would that be?  First, because they are NOT as "easy to use" as claimed, and secondly...they actually cost you an arm and a leg in the long run!
 
You might think they seem like an inexpensive and safe option. But I am not referring to the money for the service itself.
 
Using those programs can end up leaving thousands (or much more) of YOUR assets in the coffers of Uncle Sam, or in the probate process...even if you follow all of their instructions to a tee. I see it all the time--frustrated clients standing upon a poorly-constructed legal foundation, not just for their assets, but for the disposition of other important wishes (like the taking care of children).
 
The security you get is actually false security. 
 
Even worse...
 
Choosing the wrong asset allocation method can end up leaving your estate owing more to the IRS than if you had done nothing at all.
 
Now, it is not my intention to scare you, but again--I have seen it more than I would like. Frustrated families coming to see me during a period of great stress, and my staff and I having to attempt to "undo" poorly-crafted plans created by well-intentioned families (or even other lawyers) which ends up costing everybody far more than they would like.
 
So, I hope you are with me:  Choosing a well-trained and caring professional, who will put YOUR interests first--rather than just making another "sale" online is critical for any disaster plan.
 
With all that, now we come to the issues you will deal with in choosing the right planning lawyer for your needs. Here is another mistake:
 
2) Choosing a Houston Will and Trust lawyer who will charge you overly-high hourly rates for simple services.
 
Many lawyers will lure you in with (again) "cheap" basic services...and proceed to rack up the fees as they execute planning services which really should have been covered by the flat fee.
 
When you are investigating flat fee services from a lawyer, here are some simple questions to ask:
 
* "Are all of your fees flat fees?"
* "What about ongoing work after the initial completion of my estate plan documents?"
* "What happens when I call with legal questions 2 years after my planning documents were completed?"
* "What if the questions are about something other than my estate plan?"
 
You need to be satisfied by the answers you receive to these questions, as they often sneak up on families after-the-fact, and can be a major drain on your family's cashflow.

Thursday, February 10, 2011

Houston Trusts Lawyer Answers, ‘What Are Charitable Trusts All About?’

By: Kim Hegwood, Houston trusts lawyer

If there is an organization or charity that you support financially, as a Houston trusts lawyer, I would urge you to consider setting up a charitable trust.  A charitable trust allows you to give money to an organization whose work you admire and support, but there is also an additional benefit in that you may be able to reduce your estate taxes. 

One way that people use charitable trusts is to set aside assets to produce income while they are alive, with the remainder going to charity when they pass away.  This allows them to receive tax benefits while they are still living from a gift that will be made when they die.  In this scenario, both the donor and the charity will benefit.

There are two main types of charitable trusts.  They are:

• Charitable lead trust. You can use a charitable lead trust to make a series of payments to a charitable organization while you are alive.  At some point in the future the remaining assets in the trust either given back to you or transferred to someone that you select as beneficiary.  In a way, the donor is lending the assets to the charity for a period of time during which the charity can use the income produced by the assets.
• Charitable remainder trust. In this type of trust, you set up two sets of beneficiaries called income beneficiaries and remainder beneficiaries.  The income beneficiaries, typically the trust owner and/or his or her family, receive income from the assets in the trust during their lifetimes.  When the beneficiaries pass away, all remaining assets are given to the charity who is the remainder beneficiary.  This option has the added benefit of missing estate taxes entirely.

The rules for these types of trusts are very complex.  If you are interested in charitable trusts, I encourage you to seek out a qualified Houston trusts attorney and tax advisor who can guide you through the process.

Thursday, February 10, 2011

Houston Trusts Lawyer Answers, ‘What Are Charitable Trusts All About?’

By: Kim Hegwood, Houston trusts lawyer

If there is an organization or charity that you support financially, as a Houston trusts lawyer, I would urge you to consider setting up a charitable trust.  A charitable trust allows you to give money to an organization whose work you admire and support, but there is also an additional benefit in that you may be able to reduce your estate taxes. 

One way that people use charitable trusts is to set aside assets to produce income while they are alive, with the remainder going to charity when they pass away.  This allows them to receive tax benefits while they are still living from a gift that will be made when they die.  In this scenario, both the donor and the charity will benefit.

There are two main types of charitable trusts.  They are:

• Charitable lead trust. You can use a charitable lead trust to make a series of payments to a charitable organization while you are alive.  At some point in the future the remaining assets in the trust either given back to you or transferred to someone that you select as beneficiary.  In a way, the donor is lending the assets to the charity for a period of time during which the charity can use the income produced by the assets.
• Charitable remainder trust. In this type of trust, you set up two sets of beneficiaries called income beneficiaries and remainder beneficiaries.  The income beneficiaries, typically the trust owner and/or his or her family, receive income from the assets in the trust during their lifetimes.  When the beneficiaries pass away, all remaining assets are given to the charity who is the remainder beneficiary.  This option has the added benefit of missing estate taxes entirely.

The rules for these types of trusts are very complex.  If you are interested in charitable trusts, I encourage you to seek out a qualified Houston trusts attorney and tax advisor who can guide you through the process. 

Thursday, January 20, 2011

Houtson Trust Lawyer Discusses Having the Right Tools for the Right Job

By: Kimberly Hegwood, Houston Trust Lawyer

A will is a simple legal document which describes what should happen to your assets upon death...and it is, frankly, not enough for most families. That is because the actual distribution is controlled by probate, without a plan in place. Upon your death, the will becomes a public document available for inspection by all comers. And, once your will enters the probate process, it is no longer controlled by your family, but by the court and probate attorneys.

Oh, this can be cumbersome, time-consuming, expensive, and an emotional trauma--all added on to a family's time of grief and vulnerability. Con artists and others have been known to use their knowledge about the contents of a will to prey on survivors. This, as you can imagine, must be avoided at all costs.

What is great about a Living Trust, is that it actually avoids probate and keeps everything totally private--because your property is owned by the trust. That way, technically there is nothing for the probate courts to administer! Whomever you name as your "successor trustee" gains control of your assets and distributes them exactly according to your instructions.

And one more big thing: a will does not take effect until you die, and is therefore no help to you with lifetime planning. As we all start to live longer, this is an increasingly important aspect of these considerations. A Living Trust can help you preserve and increase your estate while you are alive, and offers protection should you become disabled.

A few questions I often receive as a trusts lawyer in Houston:

"Who are the trustees for my Living Trust? Can I be one?"

YES. In fact, most Living Trusts have the people who created them acting as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your trust. In the event of a mentally disabling condition, your hand-picked successor trustee assumes control over your affairs, not the court's appointee. That's nice peace-of-mind!

"Does a Living Trust help me to avoid income taxes?"

NO. You see, the purpose of creating a Living Trust is to avoid living probate, death probate, and reduce or even eliminate federal estate taxes. It is not a vehicle for reducing income taxes (see an accountant for that!).

In fact, if you are the trustee of your Living Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.

We manage these trusts for our clients -- and we update them too! ( More on that in a  future Note, perhaps.) So, if you want to set one up (and I don't blame you), send me an email, or give us a call: 281-218-0880 -- and we will get this process started for you.

Wednesday, January 12, 2011

Texas Estate Planning Attorney Discusses Naming Separate Guardians For Your Kids

As a Texas estate planning attorney, I work with parents all the time to make sure their minor children will be protected if the death or incapacity of one or both parents should occur.

One of the ways we do this is to name short-and long-term guardians, who are essentially the people with legal permission to take custody of your children if tragedy strikes.

Yet in my work as a Texas estate planning attorney, I can honestly say that making a guardianship nomination legal is the easy part!  It’s choosing the actual people you feel comfortable with to provide your kids long-term care which is the hardest decision for most Houston-area parents.

Not to mention the complications (and stress) that can arise when it becomes clear that the kids would fare better if left in the care of different guardians (and yes, perhaps even be separated from one another) if the death of one or both parents occurred.

Of course this is a decision that’s not to be taken lightly, but legally, there is nothing stopping you from leaving your children to the care of different people if it seems necessary for their future well-being. 

If in your conversation with a Texas estate planning attorney you feel such a move is necessary, I urge you to make your wishes known and don’t feel bad or even guilty about your decision. Sometimes it’s clearly for the best.

Not sure when this would be an appropriate choice for your family? Let me give you an example as to when the decision to name separate guardians would come into play.

Let’s say you are a mother of 3 children.  You have two girls from your first marriage and your third child, a boy, is from the 2^nd. If something unexpectedly happened to you, the law dictates that your youngest son would be placed in the care of his father, provided he is still living. 

Yet you know that living with your current husband would not be the best arrangement for the girls.  The girls have never been close to your new husband and you can’t imagine the situation getting any better if you were gone.  Worst of all, the girls have no relationship with their biological father.  In fact, he signed over his rights in lieu of paying child support years ago.    So in your mind, leaving the children to him is not an option either.

Based on this scenario, you decide to make your sister the guardian of the girls, while your husband would continue to raise your son if something happens. 

Of course that’s just one of MANY examples in which the decision to appoint separate guardians for your children comes into play.  As I tell parents all the time, YOU and only you know what is best for the physical and emotional well-being of your children in a time of need.   While the ideal situation is to leave the kids together if possible, family dynamics or life circumstances may dictate that alternative plans be made.

Fortunately, that’s the beauty of estate planning.  It gently forces you to think about such situations in advance so your kids are given the best chance to thrive if something unexpectedly happens to you.  You can then document your wishes so there is no question as to who you want to care for your kids in your absence.

Haven’t made plans yet to legally appoint someone to care for your minor kids if something happens to you?

Then give us a call at (281) 218-0880 and request a Lifetime Legacy Planning Session. These sessions are normally $750, but you can come in free with the mention of this article.  However, these appointments are limited to 10 per month so call today!

Wednesday, December 22, 2010

Texas Wills and Estates Lawyer Discusses How a Texas Divorce Affects Your Will and Trust

While I’m not a divorce lawyer, I know that getting a divorce in Texas can be an overwhelming process.  There are so many decisions to make and things to do that it’s hard to keep everything straight.  But as a Texas estate planning lawyer, I also know there is one thing that divorcing couples must remember to do—and that is getting your will or trust updated.

Forgetting about your estate plan is understandable from any perspective.  You’re so busy thinking about living arraignments, finances and custody agreements that you simply forget to contact an estate planning lawyer to make sure your spouse will no longer be the beneficiary of your estate once the divorce is final.

And while I admit estate planning is easy to overlook, it’s still something that must be taken care of either before you file or immediately after your divorce is complete.

This is especially true if you have a life insurance policy, retirement accounts, investments, property or even a joint trust with your current spouse.  If you fail to take steps to create a single person trust or designate new beneficiaries on your other assets, your ex-spouse will still receive everything you own—even after you are legally divorced.

Similarly, if you don’t create an updated power of attorney and living will, your soon-to-be ex-spouse will be the only one with legal permission to make decisions for you if you are permanently or temporarily incapacitated.   For most people, the thought of their soon-to-be ex making decisions such as medication administration, life-support or nursing home vs. home health care is frightening.  Also, the ex most likely does not want that responsibility any longer.  That is why it is critical to get these issues addressed at some point before or after the divorce proceedings.

However, there are strict time-frames as to when you can update/amend your estate planning documents during a divorce in Texas, so please make yourself familiar with the following guidelines:

Updating Your Estate Plan Before Filing Divorce in Texas

As a Texas estate planning lawyer, I highly recommend you consider revoking and restating all of your estate planning documents before filing for divorce.  This includes updating your advanced healthcare directive (also known as a living will) and financial power of attorney so someone other than your spouse has the ability to make financial or medical decisions on your behalf if you are unable.   This is especially true if you’re gearing up for a messy divorce which could likely drag on for a number of years. 

You’ll also want to change the beneficiaries on your life insurance policy, retirement accounts and other investments.  If you have a joint trust with your spouse, you’ll need to talk with your Texas will and trust lawyer to find out whether you must provide notice to your spouse before it is revoked. 

Updating Your Estate Plan During Divorce Proceedings in Texas

During your divorce proceedings, the ability to revoke your trust or name new beneficiaries on certain accounts can be halted.  What’s known as an Automatic Temporary Restraining Order (ATRO) will kick in to ensure your assets and ownership interests stay the same until an official division of assets and ownership interests takes place.  Therefore, it’s important to note that if you pass away during this time, your soon-to-be ex-spouse will still become the beneficiary of your estate.  You can, however, update your will, power of attorney and living will during this time to minimize the amount of power your ex-spouse would have if something unexpectedly happens to you.

Updating Your Estate Plan After a Divorce in Texas

After the divorce proceeding, you are considered a single person in the eyes of the law.  You are free to update, revoke and amend your estate planning documents as you see fit.  However, as a Texas will and trust lawyer, I’ve come to find that many people falsely believe their spouse is no longer entitled to their assets once the divorce is officially granted.  While it’s true that some estate planning powers may be automatically revoked after the divorce (such as the ability to speak for you medically if you were in an accident), if you have outdated legal documents in place that still include your ex-spouse, he or she will still be the legal beneficiary of your estate or specific assets upon your death.  Therefore, it’s important to make sure every legal document you have is updated immediately following your divorce.

When to Get Help

I always advise people in Texas to at least meet with a Texas estate planning attorney, in addition to their divorce attorney before ultimately filing for divorce. That’s because it’s important for you to know exactly how the divorce proceedings will affect you and/or your children, especially if you become incapacitated or pass away suddenly during the process.

With so much going on during divorce it is difficult to think about adding another legal process.  However, it is critical to make sure your estate plan reflects your new circumstances to avoid everything you own going to your future ex-spouse if you pass away or avoid having him or her legally responsible to make medical or financial decisions for you in the event of incapacity.

Thursday, December 16, 2010

Houston Wills Lawyer Offers Important Considerations for Snowbird Season

‘It’s the time of year…time for all the snowbirds to take flight,’ says Houston Wills Lawyer

By: Kimberly Hegwood, Wills Lawyer in Houston

Snowbirds are traditionally known as people who take flight every winter heading south to a warmer climate.  However, in today’s mobile society, more and more retired people reside in more than one state during the year for reasons other than the weather.  Who can resist those grandchildren?!

If you fall into the “snowbird” category, it is important for you to think about whether your estate plan is going to work for you as you planned.  When it comes to planning for a duel residence client, it is important to address issues and develop a plan that will work effectively in both states.

Most people are aware of how critical it is to have up-to-date advance medical directives, durable power of attorney, designation of a health care advocate and a living will.  However, what you may not know is that each state has its own set of laws and rules which may mean that your documents won’t work as you planned in another state.  Even if the documents meet the technical requirements of the other state, a hospital or doctor may not choose to honor the documents which may mean your decisions regarding end-of-life or disability care may not be honored.

If you are a dual resident, it is important to talk with an experienced Houston estate planning attorney so that they can provide specific direction regarding individual state requirements. So if your will or trust was created before you owned property in another state, be sure to call and make an appointment with your Houston wills attorney to go over your will or trust to make sure that it will work just as you planned.

Wednesday, November 24, 2010

Houston Trusts Lawyer Reveals the Privacy Advantages of a Living Trust

By Kimberly Hegwood, Houston trusts lawyer

I find as a Houston trusts lawyer that many people don’t realize the privacy issues that will face their family should they die without a living trust.  That’s simply because upon your death, everything you are leaving behind to your loved ones automatically becomes a matter of public record—even if you have a will or other estate planning documents in place!

While this may feel like a huge violation from a privacy perspective, it also presents a safety issue to those inheriting your estate.  There are a lot of unscrupulous people who prey on widows and other beneficiaries and try to separate them from their inheritance.

So why does the County make this information available to the public?

The lack of privacy is understandable if you know the true purpose of probate.  One of the primary purposes of probate is to make sure the creditors of the deceased person have an easy way to collect any debts they are owed from their estate. For that reason alone, the probate process must be open and public.

This information is also made public so the creditors of your beneficiaries have notice that they are inheriting an estate.  Under this scenario, the creditors could bring an immediate claim against your beneficiary, which may ultimately result in your beneficiary never receiving the inheritance you wanted to leave them.

However, to be clear, I am in no way advocating that debts go unpaid.  In fact, you should instruct your executor to pay your debts.  But, wouldn’t you rather direct how this process goes rather than leaving it to the courts?

One way to do that while simultaneously stopping the violation of privacy and loss of control of your estate is to create a living trust.

Unlike a will, a living trust is a private document that will not become a matter of public record because it does not have to be filed with the probate court.  Therefore, you can name beneficiaries and provide gifts while still attaining privacy since only the trustees and those involved in trust administration will know the contents of a living trust.  This means that no creditor of yours or your beneficiaries, no disgruntled relative, no scam artist, and no nosey neighbor will ever know the details of your financial history.

Remember, there are people out there who make a living preying on young or vulnerable people that have just inherited something from an estate. They troll these public records daily looking for victims of their next heist or scam.  Fortunately, with a bit of planning, you can protect your family from such privacy violations that accompany the probate process.  I recommend talking to your Houston trusts lawyer about living trusts and how they can help your family if something unexpectedly happens to you.

Fortunately, we’ve made that process easier than ever by making 10  free Lifetime Legacy Planning Sessions available to readers of our blog.  Simply call (281) 218-0880 and mention this article to reserve your spot.  Your family will thank you for it.

Thursday, May 06, 2010

Life Changes That Affect (Or Jeopardize!) Your Texas Estate Planning

If you’ve tackled your Texas Estate planning and now have a will, trust and other directives in place to ensure your family is protected when they need it the most, congratulations! 

You may find in a time of crisis or emergency that this was the best decision you’ve ever made.

On the flip side, your Texas estate planning could turn out to be the biggest nightmare you’ve ever faced if you fail to update those documents with your Texas Estate Planning Lawyer as your life and the law changes through the years.

So to help ensure your Texas Estate Planning documents stay effective and relevant to your asset protection and child protection needs, here are 10 ‘life events’ which warrant an immediate review of your current Texas estate plan:

• Marriage
• Remarriage
• Divorce
• Birth of a child
• A child becomes handicapped or diagnosed as special needs
• Your original guardians are no longer a good fit or your first choice to care for your kids
• You are in a same-sex relationship with property or children in common
• Purchase of life insurance
• Purchase of real property
• Sale of real property

Of course if you have experienced any of the above life changes and now need a Texas Estate Planning Lawyer to review and update your current estate plan, simply mention this article and receive our Lifetime Legacy Planning Session ($750 value) at no charge.  We do limit these in-depth review sessions at 10 per month, so be sure to call (281) 218-0800 to immediately secure your spot!

In addition to her thriving Houston Estate Planning Law firm, Texas Will and Trust lawyer, Kimberly Hegwood of Hegwood & Associates proudly assist clients with Wills, Trusts, Pet Trusts, Special Needs Planning, Elder Law and Medicaid Planning, Probate/Estate Administration and veterans benefits in Houston, TX as well as Katy, Webster, League City, Seabrook, Kemah, Pasadena, Friendswood, Dickinson, Bacliff, La Porte and Deer Park in Harris County and Galveston County.

Thursday, April 22, 2010

Your Parent's Estate Plan In Focus: Understanding the Responsibilities that Accompany a Will in Houston, Texas

Executing a will in Houston, Texas and crafting a thoughtful estate plan can make your heirs' lives easier. But it is your parents' estate planning that will make YOUR life easier and it is important that we discuss their needs in this week’s blog post.

As a Houston will and trust lawyer, I learned over the years that not every family has fostered the ability to speak openly in love with respect to these issues.  But, if you have begun that process, here is an outline of what grown children need to know about their parents' affairs. In fact, adults of any age should update their estate plan every year.

Children may wish to ask their parents about their financial status but worry about being overly intrusive. Or they fear their elders may perceive their questions as motivated by self-interest. They may conclude mistakenly that their parents would prefer to keep their finances private.

However, whether it's our parents or ourselves, we are all certainly mortal, so planning for the future is always wise. Estate planning in Houston is just as critical when we are young as when we get older. And if you think estate planning information is hard for you to pull together, imagine how challenging it would be for someone else who may have to step in for you during a family crisis.

As a parent, if you are willing to share some of this information with your children--especially if one of them is also the executor of the estate--they will appreciate having the facts and be more prepared emotionally when the time comes. They will know your wishes ultimately anyway, and good communication will lessen any surprises ahead of time. They will benefit from knowing the answers to the following questions:

• Do you have enough saved for a comfortable retirement? Many financial planners use a safe withdrawal rate by age to make sure their clients will still have enough money toward the end of their retirement. But this is not always the case, and it's worth looking into.
• If your spending is under this withdrawal rate, you have more than enough and probably can leave a legacy to your heirs. But if you are over this rate, you may run out of money and have to compromise your standard of living abruptly. It may be uncomfortable, even embarrassing, for parents to share their finances with their children, but grown children often want to know how their parents are doing.
• Where are the important documents? The six documents your children should be able to retrieve quickly are a Texas will, a living will, a statutory durable power of attorney medical power of attorney, a directory of basic information and the latest end-of-year financial statements.

The directory of information should list the assets of your estate along with account or policy numbers and contact phone numbers. It also helps to indicate your intentions for the distribution of each asset, which will help confirm you have the correct titling and beneficiary designations on every portion of your estate.

You may have structured your will in Texas to divide your estate equally among your children. But if you have tried to make it easy for one child to access your bank accounts by adding his or her name, you have overridden your estate plan and left that child joint tenancy with complete rights of survivorship. This can be a problem.

Titling and beneficiary designations are legal estate planning actions. It is best to review them with your will and trust lawyer in Texas. Various types of assets are best designated differently in the estate plan. This is not the occasion for do-it-yourself thrift. It is a rare family that has compiled and reviewed a complete list of estate assets: bank accounts, investment accounts, retirement account, real estate holding, life insurance, health savings accounts and so on.

Are there any special bequeaths? Any promises you want kept should be documented. Your good intentions will not matter if you are not around to implement them. If you have promised money to a charity and want that obligation kept, document it. If you have promised to loan a child money, document it. If you have promised to help fund your grandchildren's college education, document that. Without documentation, none of these promises can be kept if you aren't around to make the decisions.

Are there plans to remarry? If parents have remarried, intergenerational estate planning is even more critical. Prenuptial agreements and careful estate planning in Houston are required in the case of second marriages to avoid disinheriting children or grandchildren from the first marriage. The default is rarely a good option.

Do you have any prepaid funeral arrangements? Do you want to be buried or cremated? Do you have any preferences for a memorial service? Although it may seem macabre to plan your own funeral, a memorial service takes time and thought. It will be that much more special and comforting to your family when it is filled with your favorite music and readings.

Encourage your children's interest in your estate planning. Most of the time, their intentions are honorable. They may simply want to understand your values and therefore your wishes.