Do you really need a will?

There is a question we hear alot when people come to our office – namely: Do you really need a will?
You May Not Think You Need a Will, But You Really Do.

Most Americans do not have a simple will as part of their estate plan. You might believe that a will is only for the rich and famous, and not the average person who has a far smaller net worth. On the other hand, you may think that a will is entirely unnecessary since you have a trust, jointly owned property, or have named beneficiaries on your insurance.

So, do you really need a will? The short answer to this question is “yes.” Continue reading

3 Ways to Minimize Estate Planning Fees

Today, it is impossible to put together even a simple estate plan without the assistance of an experienced estate planning attorney. Why? Because estate planning laws vary greatly from state to state and these laws are extremely convoluted and constantly changing.

One wrong word, one missing signature, or one procedure not followed to the letter of the law can partially or completely invalidate a Last Will and Testament, Revocable Living Trust, Advance Medical Directive, Living Will, or Durable Power of Attorney.

Though attorney fees may feel expensive, they’re actually not when viewed in light of the service and protections provided.  In fact, estate planning fees are best viewed as an investment, not an expense.

All that being said, here are 3 simple things you can do to keep the legal costs of setting up and maintaining your estate plan down:

  1. Be Prepared – Before you meet with your estate planning attorney, do your homework. Understand what you own, what you owe, who you would like to inherit what, and who should be in charge of managing your estate if you become mentally incapacitated or after you die. Then, after your estate plan is up and running, to make changes to your estate plan, make a detailed list of what the possible changes should be and forward it to your attorney for comments and questions.
  2. Keep it Simple – While a simple estate plan will be easy and straightforward for your attorney to draft and maintain, a complicated estate plan will be difficult and time consuming. This usually means that a complicated estate plan will cost more.  Keeping it simple will not only help minimize the legal fees while you are alive, but also the costs of settling your estate after you die.
  3. Join Your Attorney’s Estate Plan Maintenance Program – Some estate planning attorneys offer a regular estate plan tune-up for their clients at a reasonable fee. This program will force you to think about your estate plan once a year or every few years depending on the terms of the attorney’s maintenance program.  Maintenance programs help you keep your estate plan current with changes in the law, your attorney’s experiences, and your life, family, goals, and assets.  Estate plans only work if they’re up to date.

Contact our office today at 832.408.0505 to find out howe we can help you protect your loved ones.

‘Till Death Do Us Part, Too: Estate Planning Tips for Commitment Without Marriage

Advice columnist Ann Landers once observed that “love is friendship that has caught fire.” If that’s true, there are thousands of ways for that blaze to unfold. For many Americans, such devotion and passion do not need to be neatly formalized as marriage.

In fact, our cultural norms are shifting, and quickly. Consider the following:

  • Per the U.S. Census Bureau, approximately 112 million people in the U.S. are unmarried;
  • 45 percent of our country’s households are “unmarried households.”
  • In 2013, the CDC found that “cohabitation [without marriage] is now a regular part of family life in the U.S.”

Unfortunately, the law has not kept up with these societal trends. If you and your significant other love each other but don’t want to tie the knot, you need an estate plan that takes into account your specific situation while protecting you both, along with any other family members or loved ones you wish to include.

Estate planning for married couples can seem pretty straightforward because it relies on long-standing, proven legal and tax strategies. Unmarried couples, however, may need to take a more individualized approach in order to achieve their goals. Here are some of the documents and methods you need to consider when creating or updating an estate plan.

  1. Living Trusts

Living trusts allow you to use your assets while you are alive and then bypass the probate process when transferring property to loved ones after you die. A trust can also keep your business out of the public record, and it can empower someone else to handle your finances if you become unable to do so. Even though trusts tend to cost more up-front than related solutions, the benefits they provide cannot be easily or reliably replicated with other planning options. On balance, a trust is the superior tool for virtually everyone; it should be the cornerstone of almost any comprehensive plan, especially for couples who have not formalized their relationships with a legal marriage.

  1. Wills

A pour-over will can be an effective “backup” and compliment to a revocable trust. When you die, your assets get funneled into (or “poured-over” into) your trust and then distributed to your beneficiaries per the terms and instructions of that trust. The pour-over will keeps things simple, making the process less stressful (and prone to error) for your executor and trustee. It also helps wrap up loose ends, in case you didn’t transfer every last asset to your trust before you die.

What happens if you die without a will or other estate plan? Courts refer to this as “dying intestate,” and it means that the rules that will apply to your estate will be those written into your state’s laws. These laws rarely, if ever, account for long-term unmarried partners, so a will is essential to protect the person to whom you are committed. As an unmarried couple, you simply cannot rely on the intestate laws to work for you.

  1. Beneficiary Designations

Most retirement accounts and many other types of accounts allow you to designate a “beneficiary,” or a person who will automatically receive what’s in the account when you die. Make sure you update your beneficiaries on your 401(k), IRA, or other retirement accounts, as well as on life insurance and other documents. Depending on how your trust is designed, your circumstances, and your goals, you may name one or more trusts as the beneficiary rather than an individual person.

  1. Power of Attorney, Designation of Health Care Surrogate, and Similar Documents

These documents allow you to designate your significant other as the person who has the right to make certain types of decisions and sign documents on your behalf if you become incapacitated. If no such power exists, the decision-making task typically passes to a close blood relative and typically also requires a court proceeding called a guardianship or conservatorship, depending on the type of help you need and what state you in live. Your lawyer can help you determine which powers should be covered by documents like these to ensure that enough authority is granted while still providing protection against unauthorized actions.

Whether you’ve been living with a life partner for decades, and you’re now eyeing retirement options; or you’re just beginning a family with a person who has not formally and legally been recognized as your wife or husband, you probably have questions. How should you protect yourself and family financially as you get older? What can you do to enshrine the values you hold dear for the next generation? What if an unwanted event happens, throwing you and your partner off balance — what contingency plans can be put in place?

Our experienced estate planning attorneys can help you identify a strategy to get the peace of mind you need. Please call our office today at 832.408.0505or email us to schedule a private consultation.

Is a Revocable Living Trust Right for You?

Revocable Living Trusts have become the basic building block of estate plans for people of all ages, personal backgrounds, and financial situations. But for some, a Revocable Living Trust may not be necessary to achieve their estate planning goals or may even be detrimental to achieving those goals.

What Are the Advantages of a Revocable Living Trust Over a Will?

Revocable Living Trusts have become popular because when compared with a Last Will and Testament, a Revocable Living Trust offers the following advantages:

  1. A Revocable Living Trust protects your privacy by keeping your final wishes a private family matter, since only your beneficiaries and Trustees are entitled to read the trust agreement after your death.  On the other hand, a Last Will and Testament that is filed with the probate court becomes a public court record which is available for the whole world to read.
  2. A Revocable Living Trust provides instructions for your care and the management of your property if you become mentally incapacitated.  Since a Last Will and Testament only goes into effect after you die, it cannot be used for incapacity planning.
  3. If you fund all of your assets into a Revocable Living Trust prior to your death, then those assets will avoid probate.  On the other hand, property that passes under the terms of a Last Will and Testament usually has to be probated. A probate could add thousands of dollars of costs at your death.

Why Shouldn’t You Use a Revocable Living Trust?

Although Revocable Living Trusts offer privacy protection, incapacity planning, and probate avoidance, they are not for everyone.

For example, if your main concern is avoiding probate of your assets after you die, then you may be able to accomplish this goal without the use a Revocable Living Trust by using joint ownership, life estates, and payable on death or transfer on death accounts and deeds.  However, those strategies aren’t a perfect fit for everyone.

In addition, if you are concerned about protecting your assets in case you need nursing home care, then an Irrevocable Living Trust, instead of a Revocable Living Trust, may be the best option for preserving your estate for the benefit of your family. The rules governing Irrevocable Living Trusts can be very complex, and you should only create an Irrevocable Living Trust after a thorough discussion with a qualified trust attorney.

Do You Still Need a Revocable Living Trust?

While some estate planning attorneys advise their clients against using a Revocable Living Trust under any circumstance, others advise their clients to use one under every circumstance.  Either approach fails to take into consideration the fact that Revocable Living Trusts are definitely not “one size fits all.”  Instead, your family and financial situations must be carefully evaluated on an individual basis and the advantages and disadvantages of using a Revocable Living Trust must be weighed against your personal concerns and estate planning goals.  In addition, these factors must be re-evaluated every few years since your family and financial situations, concerns, and goals will change over time.

If you have a Revocable Living Trust and it has been a few years since it has been reviewed, then we can help you determine if a Revocable Living Trust is still the right choice for you and your family. Contact our office today at 832.408.0505 to find out how we can help you.

3 Reasons You Want to Avoid Probate

When you pass away, your family may need to visit a probate court in order to claim their inheritance. This can happen if you own property (like a house, car, bank account, investment account, or other asset) in only your name. Although having a will is a good basic form of planning, a will does not avoid probate. Instead, a will simply lets you inform the probate court of your wishes – your family still has to go through the probate process to make those wishes legal. Continue reading

Do you really need a trust?

Although many people equate “estate planning” with having a will, there are many advantages to having a trust rather than a will as the centerpiece of your estate plan. While there are other estate planning tools (such as joint tenancy, transfer on death, beneficiary designations, to name a few), only a trust provides comprehensive management of your property in the event you can’t make financial decisions for yourself (commonly called legal incapacity) or after your death.

One of the primary advantages of having a trust is that it provides the ability to bypass the publicity, time, and expense of probate. Probate is the legal process by which a court decides the rightful heirs and distribution of assets of a deceased through the administration of the estate. This process can easily cost thousands of dollars and take several months to more than a year to resolve. Or course, not all assets are subject to probate. Some exemptions include jointly owned assets with rights of survivorship as well as assets with designated beneficiaries (such as life insurance, annuities, and retirement accounts) and payable upon death or transfer on death accounts. But joint tenancy and designating beneficiaries don’t provide the ability for someone you trust to manage your property if you’re unable to do so, so they are an incomplete solution. And having a will does not avoid probate.

Of note, if your probate estate is small enough – or it is going to a surviving spouse or domestic partner – you may qualify for a simplified probate process in your state, although this is highly dependent on the state where you live and own property. In general, if your assets are worth $100,000 or more, you will likely not qualify for simplified probate and should strongly consider creating a trust. Considering the cost of probate should also be a factor in your estate planning as creating a trust can save you both time and money in the long run. Moreover, if you own property in another state or country, the probate process will be even more complicated because your family may face multiple probate cases after your death, one in each state where you owned property – even if you have a will. Beyond the cost and time of probate, this court proceeding that includes your financial life and last wishes is public record. A trust, on the other hand, creates privacy for your personal matters as your heirs would not be made aware of the distribution of your assets knowledge of which may cause conflicts or even legal challenges.

A common reason to create a trust is to provide ongoing financial support for a child or another loved one who may not ever be able to manage these assets on their own. Through a trust, you can designate someone to manage the assets and distribute them to your heirs under the terms you provide. Giving an inheritance to an heir directly and all at once may have unanticipated ancillary effects, such as disqualifying them from receiving some form of government benefits, enabling and funding an addiction, or encouraging irresponsible behavior that you don’t find desirable. A trust can also come with conditions that must be met for the person to receive the benefit of the gift. Furthermore, if you ever become incapacitated your successor trustee – the person you name in the document to take over after you pass away – can step in and manage the trust’s assets, helping you avoid a guardianship or conservatorship (sometimes called “living” probate). This protection can be essential in an emergency or in the event you succumb to a serious, chronic illness. Unlike a will, a trust can protect against court interference or control while you are alive and after your death.

Trusts are not simply just about avoiding probate. Creating a trust can give you privacy, provide ongoing financial support for loved ones, and protect you and your property if you are unable to manage your own assets. Simply put, the creation of a trust puts you in the driver’s seat when it comes to your assets and your wishes as opposed to leaving this critical life decision to others, like a judge. To learn more about trusts – and estate planning in general, including which type of plan best fits your needs – Contact our office today at 832.408.0505

Four Reasons Why Estate Planning Isn’t Just for the Top 1 Percent

There is a common misconception that estate plans are only for the ultra-rich – the top 1 percent, 10%, 20%, or some other arbitrary determination of “enough” money.  In reality, nothing could be further from the truth. People at all income and wealth levels can benefit from a comprehensive estate plan. Sadly, many have not sat down to put their legal house in order.

According to a 2016 Gallup News Poll more than half of all Americans do not have a will, let alone a comprehensive estate plan. These same results were identified by WealthCounsel in its Estate Planning Awareness Survey. Gallup noted that 44 percent of people surveyed in 2016 had a will place, compared to 51 percent in 2005 and 48 percent in 1990.  Also, over the years, there appears to be a trend of fewer people even thinking about estate planning.

When it comes to estate planning, the sooner you start the better. Continue reading

The Trust Protection Myth: Your Revocable Trust Protects Against Lawsuits

WARNING:  Many people believe once they set up a Revocable Living Trust and transfer assets into the Trust, those assets are protected from lawsuits.  This is absolutely not true.

While Trusts commonly provide asset protection for beneficiaries, few Trusts protect assets owned by the person who created the Trust.

No Immediate Asset Protection?  Why Should You Create a Revocable Living Trust?

Fully funded Revocable Trusts are dynamite tools.  Here’s why:

  1. You can protect assets passing to your spouse and children. Yes, you can provide protections for loved ones that they can’t yet for themselves.
  2. Your Trust includes an incapacity plan, avoiding court interference, maintaining your control, and saving your loved ones time, money, and stress.
  3. Your Trust allows your assets to avoid probate, minimizing the time, stress, and cost of settling your final affairs.
  4. By avoiding the public probate court process, your Trust keeps all details about who is getting what, a private family matter.

What Can You Do to Protect Your Assets?

 Comprehensive estate planning has a solid foundation of insurance, including homeowners/renters, umbrella, auto, business, life insurances, disability, and the like.  Business entities such as the Limited Liability Company are commonly used for asset protection and   Domestic Asset Protection Trusts are sometimes used as well.

Your Revocable Living Trust creates a powerful value and can be drafted to provide asset protection for your loved ones.  To protect yourself, use insurance, business entities, and, perhaps, a Domestic Asset Protection Trust. Contact our office today at 832.408.0505 to see how we can help you.

How Your Trust Can Help a Loved One Who Struggles with Addiction

Substance addiction is by no means rare, impacting as many as one in seven Americans. Because of its prevalence, navigating a loved one’s addiction is actually a relatively common topic in everyday life. But you should also consider it when working on your estate planning. Whether the addiction is alcoholism, drug abuse, or behavioral like gambling, we all want our loved ones to be safe and experience a successful recovery.  A properly created estate plan can help.

The idea that money from a trust could end up fueling those addictive behaviors can be a particularly troubling one. Luckily, it’s possible to frame your estate planning efforts in such a way that you’ll ensure your wealth has only a positive impact on your loved one during their difficult moments.

Funding for treatment

One of the ways your trust can have a positive influence on your loved one’s life is by helping fund their addiction treatment. If a loved one is already struggling with addiction issues, you can explicitly designate your trust funds for use in his or her voluntary recovery efforts. In extreme cases where an intervention of some sort is required to keep the family member safe, you can provide your trustee with guidance to help other family members with the beneficiary’s best interest by encouraging involuntary treatment until the problem is stabilized and the loved one begins recovery.

Incentive trusts

Incentive features can be included in your estate planning to help improve the behavior of the person in question. For example, the loved one who has an addiction can be required to maintain steady employment or voluntarily seek treatment in order to obtain additional benefits of the trust (such as money for a vacation or new car). Although this might seem controlling, this type of incentive structure can also help with treatment and recovery by giving a loved one something to work towards. This approach is probably best paired with funding for treatment (discussed above), so there are resources to help with treatment and then benefits that can help to motivate a beneficiary.

Lifetime discretionary trusts

Giving your heirs their inheritance as a lump sum could end up enabling addiction or make successful treatment more difficult. Luckily, there’s a better way.  Lifetime discretionary trusts provide structure for an heir’s inheritance. If someone in your life is (or might eventually) struggle with addiction, you can rest easy when you know the inheritance you leave can’t be accessed early or make harmful addiction problem worse.

Of course, you want to balance this lifetime protection of the money with the ability of your loved one to actually obtain money out of the trust. That’s where the critical consideration of who to appoint as a trustee comes in. Your trustee will have discretion to give money directly to your beneficiary or pay on your loved one’s behalf (such as a payment directly to an inpatient treatment center or payment of an insurance premium). When dealing with addiction, your trustee will need to have a firm grasp of what appropriate usage of the trust’s funds looks like. Appointing a trustee is always an important task, but it’s made even more significant when that person will be responsible for keeping potentially harmful sums of money out of the addicted person’s hands.

Navigating a loved one’s addiction is more than enough stress already without having to worry about further enablement through assets contained in your trust. Let us take some of the burden off your shoulders by helping you build an estate plan that positively impacts your loved one and doesn’t contribute to the problem at hand. That way, you can go back to focusing your efforts on the solution. Contact our office today at 832.408.0505 to see how we can help.

5 Things Every New Mother Needs to Know About Wills

As a new mother, you naturally want to ensure your new baby’s future in every way. For many new mothers, infancy is a time for celebrating new life, and making a will is the last thing on their minds. For others, the process of bringing new life into the world sparks intense feelings of wanting control and needing organization. Regardless of where you fall on that spectrum, you might be struggling to figure out what steps you need to take to protect your children’s future should the unthinkable happen. Here are five key things every new mother should know about wills.

  1. Naming a guardian could be the most important part of your will.

If you pass away while your child is a minor, the first issue to be addressed is who will assume responsibility for your child’s care. If you don’t name a guardian for your child in the will, the courts may decide this question for you, and the guardian might not be the person you would choose. Selecting a trusted guardian is in many ways more important at this stage than deciding about how to pass any assets you own.

  1. Name an executor you trust.

To ensure your child does receive all that you have allocated when she comes of age, choose a trustworthy executor. Many people choose a family member, but it’s just as acceptable to appoint a trusted attorney to handle your estate. Typically, an attorney has no emotional attachment to the family, which might seem bad, but usually results in less potential conflict.

  1. Named beneficiaries on your financial accounts may override the will.

Many accounts allow you to name a beneficiary. When you pass away, the funds go to the beneficiary named on the account, even if your will states otherwise. If you’re creating a will with your child in mind (or adding the child to an existing will), you should review your investment and bank accounts with your financial advisor to make sure there are no inconsistencies when naming beneficiaries. It’s also a good time to check retirement account and life insurance beneficiary designations with your financial advisor and your attorney.

  1. A will is not always the right document for your goals.

When naming your child as a beneficiary, a will only goes into effect after you die. If your will leaves property outright to a minor child, the court will step in and hold the assets until your child turns 18. Most 18 year olds lack the maturity to handle even a modest estate, so we don’t recommend outright inheritance for minor children.

A trust, on the other hand, goes into effect when you create it and can provide structure to manage the assets you leave behind for the benefit of your child. An experienced estate planning attorney can advise you on the best option for your family and your circumstances.

  1. In the absence of clearly stated intentions, the state steps in.

Think of a will, trust and other estate planning documents as an instruction manual for your executor and the courts to follow. You must be clear and consistent in your stated intentions regarding your child, as well as for others. If you’re not clear or if you don’t leave any instructions at all, the probate courts will step in and follow the government’s plan, which can lead to long delays and is probably not the plan you would have selected for your child and family.

Providing for your baby’s long-term welfare may start with just a simple will, but to be fully protected, you probably need more. That’s why it’s important to talk with a competent estate planning attorney to make sure you have the right plans in place to fulfill your goals. We’re here to help! Contact our office today at 832.408.0505 to talk about your options to protect your new baby.