Tag: Houston Estate Planning Attorney

Who Needs to Consider Trusts for their Children in Houston?

There are a lot of reasons to consider setting up trusts for your children, but trust and estates lawyers in Houston see far too many cases where this just is not done.  One of the biggest reasons for not setting up a trust could be that you feel you do not have enough assets to warrant one.  We hear about “trust fund babies” and automatically think of the super wealthy, not regular folks like ourselves.

Really, though, even those in the middle class should be thinking about setting up trusts for their children.  Even if you do not have a lot of extra money lying around, you have other assets that can quickly add up in value.  Add to that the payout from a life insurance policy, and you suddenly realize that you have quite a bit of financial worth that might be left behind to children who are not ready to handle it.  Anything more than about $100,000 is reasonable to consider putting into a trust for children.

What Does the Trust Do?

When you set up a trust with your trust and estates lawyer in Houston, you will discover that there are many different ways to use this tool.  One of the most important benefits of a trust is that it allows you to stipulate how your children will use the money you leave behind.  If your intention is for your kids to use the money for college, but they want to use it to buy a sports car instead, what is to stop them?

In your case, the trust is what can stop them.  You can implement restrictions on how the money is spent.  You can, for example, determine that the funds in the trust are designated for specific functions, such as paying for education or day-to-day expenses.  In some cases, there is a designated adult to help keep things on track, although this person must be chosen wisely.  In other cases, the parent sets age limits on the trust, assuring that the children do not have access to the money until they have more time to mature.

Protecting the Trust

Another reason to consider a trust is to protect your children’s money from misuse by the adult in charge of the funds.  In the case of a “custodial” account, the person in charge can have a lot more say in how the money is spent.  This could translate into frivolous expenses, including paying himself or herself an unrealistic amount to “manage” the funds.  With a trust, however, the person in charge (the “trustee”) is held more accountable and is required to follow your wishes.

If the trustee does manage the funds poorly, it is also possible that your child would have some legal recourse, as the trust is a legal contract.

Talk to a Houston Trust and Estates Lawyer

The best way to determine if a trust is right for you and family is to talk to a Houston trust and estates lawyer.  Our attorneys are available to sit down with you to review your estate plan and consider how a trust or other estate planning tools can best meet your needs.  To schedule a planning session, call us at (281) 218-0880 and mention this article.

Should I Pre-Plan and Pre-Pay for my Funeral Expenses in Texas?

Many people come into our Houston estate planning law firm seeking to pre-plan their funeral so that they can relieve their loved ones of the burden of doing so when they are gone.  Because of the growing demand for funeral pre-planning, local funeral homes are also responding by offering different plans that allow people to pre-plan the service they would like, pick out a casket, and even pay for everything in advance. Pre-planning your funeral here in Texas can be a wise idea, but you might want to think twice before pre-paying for your final expenses in advance.

You should be aware that here in Houston the state of Texas, there are rules that often require the funeral home to invest the money paid to them so that it is available when needed. Some funeral homes put that money in a trust fund or buy an insurance policy naming itself as beneficiary.  With that said, if you are considering a pre-paid plan, you should find out the following:

  • If your funeral home goes out of business, will you lose part or all of your investment?
  • If you move out of the area, is there a penalty or complete loss of your plan?
  • If the funeral home invests the money you pay them, do they get to keep the interest or do you?
  • Can you change or cancel your plan?
  • If you sign up for a payment plan and you die before it is complete, does the funeral home have an insurance policy that will cover the remaining costs?

Because pre-paying your funeral here in Texas often comes with risks and a lot of “unknowns”, an alternative (and sometimes better option) is to work with an attorney to create a trust which will allow you to provide detailed instructions about your final wishes and set aside funds to cover the expenses.  This is all set up and controlled by you, removing the funeral home as the middle man, while still providing you with the same same peace of mind that your end-of-life affairs are taken care of.

If you would like help to independently pre-plan and pre-pay your final affairs, including your funeral,  call our Houston estate attorneys at (281) 218-0880 to  set up a consultation. If you would like, we have an expert that can review the funeral home contract that you are currently considering and tell you what other options may be available.

Estate Planning Tips for Power Couples

MP900446471A marriage between two power players hopefully brings future happiness. But you also need to protect your assets while merging life goals.

A Forbes article, "Wealth Planning For Couples: How to Wisely Merge Your Financial Plans," says that if you're an adult with accumulated assets, you need to approach the financial side of your marriage like a business decision. While planning your wedding, you and your partner should discuss several serious topics and consult with an estate planning attorney. Think about where you want to live, how you will treat dependents, and who gets what if the marriage ends.

Although a possible divorce isn't an easy subject to broach with your future spouse, it's important. A prenuptial agreement is now a standard document for those who want to protect their wealth. You should negotiate a prenuptial agreement six to eight weeks before the wedding to avoid potential future claims of being pressured into signing the agreement. Things to include in a prenuptial agreement include what assets each partner owned before the marriage and what should happen to them going forward. Children from previous relationships must also be considered.

Even though most states don't require it, each person should have his or her own legal representation.

Next, let's look at your day-to-day life as a married couple. You'll need to address some issues about the assets you each have now and those you'll accumulate during your marriage.

Maintain a joint checking account for regular expenses, but think about having separate stock and investment accounts. Men and women tend to have different investing styles, with women particularly concerned about maintaining their lifestyle in retirement. Women can be more cautious because they know they generally live longer and will need to take care of themselves. Men are typically more optimistic about their ability to continue making money.

Each spouse should sign a financial durable power of attorney to allow access to retirement accounts or other accounts that are held only in one spouse's name.

Couples should also discuss financial and emotional decisions about any future healthcare problems, especially if they are getting married later in life. Couples in their 60s or older may have already discussed healthcare directives with their children or other relatives, but now will need to review their choices in light of their new marriage. This includes whether you have long-term care insurance or plan to self-fund care issues in the prenuptial agreement. Make it clear where the money would come from to pay for long-term care.

A written healthcare directive is essential to establish who makes decisions in case you become incapacitated. In addition, you should sign a HIPAA (Health Insurance Portability and Accountability Act) release in order for your health information to be shared.

Even if a couple doesn't combine all their assets, they should mesh their financial plans to avoid future conflict with each other or among their heirs.

Reference: Forbes (November 27, 2015) "Wealth Planning For Couples: How To Wisely Merge Your Financial Plans"

Reforming a Will Because of a Mistake

Irving Duke created a "holographic" (i.e., hand written) will under which his wife was to receive all of his property. However, the will dictated that if Duke and his wife died at the same time, then his property was to be divided amongst various charities.

What Duke did not contemplate in his will is the possibility that his spouse would pass away before he did, which is exactly what happened.

As Duke had never redrafted his will after his wife passed away, the trial and appellate courts declared that his property should go to his relatives under the laws of intestacy. However, the California Supreme Court ruled that an unambiguous will can be reformed by the court if it can be established by clear and convincing evidence that a mistake was made in expressing the testator's intent at the time the will was drafted.

The Wills, Trusts & Estates Prof Blog reported on this case in "Unambiguous Will May Be Reformed Because Of Mistake."

Wills-trusts-and-estates-coveredThis means that if the charities can establish that Duke clearly meant for his property to go to them in the event his wife was not able to inherit it, then the court can effectively rewrite the will to make that clear and the charities would inherit Duke's property.

It is difficult to determine what a deceased person intended to do.

While it might seem clear that Duke intended his property to either go to his wife or to the charities, it could also be the case that he intended to rewrite his will if his wife did pass away before him.

Consequently, this is the reason courts have generally been unwilling to rewrite potentially mistaken wills. It now appears probate courts in California will need to determine what a deceased person intended when the will is silent on an issue.

If you have had changes in your life or in the lives of your loved ones, then do not delay that phone call to a qualified estate planning attorney to review and update your estate plan.

Reference: Wills, Trusts & Estates Prof Blog (October 23, 2015) "Unambiguous Will May Be Reformed Because Of Mistake."