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Wills: Managing Your Estate. By: Burke C. Marold, J.D ., M.B.A. Marold Law Firm, PLLC – Managing Member. A Philanthropic Minded Law Firm ®. TX Default Rules. Texas Rules of Intestate (dying without a Will) Unintended (or intended?!) consequences

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wills managing your estate

Wills: Managing Your Estate

By: Burke C. Marold, J.D., M.B.A.

Marold Law Firm, PLLC – Managing Member

tx default rules
TX Default Rules
  • Texas Rules of Intestate (dying without a Will)
    • Unintended (or intended?!) consequences
    • Confusion, controversy, &/or loss of security
    • Irresponsible
    • More court oversight
    • Greater cost of time and expense
intestate court process
Intestate:Court Process
  • Application to court to determine heirs
    • Unintended results?
    • Need for witnesses and other proof
  • Application for appointment of Admin.
    • Waivers and consents
    • Risk of falling into a dependent admin. = > $$
real life example i
Real life example I
  • “Ted”; age 42; married to “Mary”; makes $200k a year; sole breadwinner in household; has three children, one from a previous relationship; is killed by a car while crossing the street; has NO Will.
  • Ted’s estate owns the following:
    • 100% of house (wife and two children reside there);
    • Some vacant land in Corpus Christi;
    • Four cars

HOW IS TED’S ESTATE DIVIDED?

tx default rules1
TX Default Rules

Wife

  • Share of separate land: 1/3 LE
  • Share of separate personal property: 1/3
  • Share of Ted’s community: ZERO

Children (3 split)

  • Share of separate land: 2/3 plus 1/3
  • Share of separate personal property: 2/3
  • Share of Ted’s community: WHOLE
problems
Problems
  • Surviving wife is now forced to find a job while at the same time she has “lost” ownership of her house
  • Child from previous marriage is now a co-owner of estate assets with Wife and two other childen
  • How do you divide a house, land, and cars four ways?
  • Ted’s new wife and first child do not get along.
  • Two of the children are underage = GUARDIANSHIP
  • ..... A lot more problems!
real life unintended results
Real life unintended results
  • Court declaration of heirs; appointment of administrator for the estate
  • Court declared guardianship of minor children
  • Divided ownership of assets
  • Stress, anxiety, tears, frustration
  • $15,000.00+ in attorneys’ fees
real life example ii
Real life example II
  • “Sally”; age 79; suffered with severe physical illness for ten+ years; abandoned by her three children; taken care of by her neighbor for fifteen+ years; has NO Will.
  • Sally’s estate owns the following:
    • $200,000 house
    • $90,000 life insurance policy;
    • One car

HOW IS SALLY’S ESTATE DIVIDED?

tx default rules2
TX Default Rules

Loyal neighbor

  • Share of separate land: ZERO
  • Share of separate personal property: ZERO

Children (3 split)

  • Share of separate land: 100%
  • Share of separate personal property: 100%

IS THIS FAIR? IS THIS WHAT SALLY INTENDED?

tx testate rules
TX Testate Rules
  • Texas Rules of Testate (dying with a Will)
    • You make the rules!
    • You have the control!
    • You take responsibility for your estate!
    • You leave your family more secure!
    • You allow healing to take place!
two types of wills
Two types of Wills
  • Formal witnessed Wills
    • Signed by you (18+), two witness (at least 14 yrs. Old), and notarized
    • “Independent”
    • Streamlined court process
    • Witnesses must sign @ same time
  • Holographic Wills
    • Entirely in handwriting of testator
    • Made with intent to be a Will
    • Dated and signed
    • However, more requirements @ court
what happens @ death
What happens @ death?
  • With valid Will
    • Uncontested court docket (i.e. Probate Court)
    • County where Decedent resided
      • Executor name is officially appointed
      • Authority to act for “estate” and creation of entity
      • Pay debts, administer estate, follow court directives, distribute property, sign final and estate tax returns
  • Without Will
    • Arrange for special hearing
    • Application to Declare Heirs
    • Application for Independent / Dependent Administration
why probate
Why Probate?
  • Probate must happen!
    • Must hire an attorney
    • No authority to act or bind estate without Letters
    • Transfer title to Real Property and other “titled assets” (big issues here!)
    • Notice to creditors
    • Notice to beneficiaries / heirs
advanced planning
Advanced Planning
  • Living Revocable Trust
    • Avoid Courts entirely
    • “Avoid” possible contests to your estate
    • More control
    • Lifetime support (i.e. guardianship of estate avoidance)
    • Creditor protection to beneficiaries
    • Simpler, sometimes much cheaper (ancillary probate_, can be more flexible
    • Private versus public
advanced planning1
Advanced Planning
  • Durable Financial Power of Attorney
  • Medical Power of Attorney
  • Advanced Health Care Directive (i.e. Directive to Physicians)
  • Declaration of Guardian in event of need
  • Declaration of Guardian for minors
  • HIPAA Authorization
  • Life Insurance, beneficiary designations
  • DNR, donation of organs, affidavit of heirship for motor vehicles
  • Special-needs Trusts
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