What Happens When There is No Will?
What happens when there is no will? If you fail to make a living will before you die, your estate will be distributed according to the Texas Law outlined in the Texas Estates Code. COMMUNITY PROPERTY The Law defines community property as anything: – You acquired or accumulated while married. SEPARATE PROPERTY The Law defines separate property as anything: – You owned prior to getting married – You inherited or received as a gift from someone else How is Property Distributed When There is No Will? When there is a spouse and children, your spouse receives your half of the community (marital) property and keeps the living spouse’s half. The spouse also receives 1/3 of your separate personal property and a 1/3 interest in your separate real property for their lifetime (real estate). The remainder of your separate property (2/3) is divided equally among the children. Important note: this arrangement only applies if your spouse is the parent of all of the deceased children. When the deceased spouse has children outside of the current marriage, the children of the deceased spouse receive the deceased spouse’s half interest in community property. The living spouse retains 1/2 interest of the community property and receives 1/3 of the deceased spouse’s separate personal property, a 1/3 interest in deceased spouse’s separate real property for lifetime and the right to use the community real property for the lifetime. Unhappy with what happens when there is no will? We can help you prepare a will and ensure that your property goes where you want it to go. Call Nimmons & Fronterhouse today to book a free phone consultation.
Continue ReadingA Way to Avoid Probate
Probate in Texas is simple and cost-effective. However, there are ways to avoid probate. Bottom of Form An easy way to avoid probate is to add a POD (payable on death) or TOD (transfer on death) designation to bank accounts, IRA or other financial accounts. This is done through a beneficiary designation at the financial institution. Retirement accounts are also often beneficiary designated accounts. These accounts pass outside of probate so long as there is a beneficiary listed on the accounts. If you die without a will, your assets will pass according to Texas intestate succession laws. However, some assets may not require probate. Here are some examples and property that may help to avoid probate: property you’ve transferred to a living trust life insurance proceeds with a named beneficiary funds in an IRA, 401(k), or other retirement account with a named beneficiary securities held in a transfer-on-death account real estate for which you have a transfer on death deed vehicles for which you have a transfer on death registration. An owner or joint owners may designate a beneficiary to whom interest in the motor vehicle transfers upon the death of the owner or last surviving owner. A designated beneficiary has no interest in a motor vehicle until the owner’s (or last surviving owner’s) death payable-on-death bank accounts Contact Cynthia Fronterhouse to discuss probate. Nimmons & Fronterhouse offers flat fees for many probate matters.
Continue ReadingHow Cryptocurrency and NFTs Fit into Your Estate Plan
Five years ago, cryptocurrency was probably not on your radar. Today, it may be an important investment in your portfolio. You could even own some nonfungible tokens (NFTs), which are powered by the same blockchain-based technology. Despite the dizzying fluctuations in the value of these assets, you should ensure that they are included in your estate plan so you can preserve them for your heirs. Preserving Cryptocurrency: Now and Later Cryptocurrency, which is digital money, is exhibiting stability as part of the global financial landscape, even though the value of individual coins (units of cryptocurrency) has been notoriously volatile. The overall market hit $3 trillion in value in 2021, only to lose $2 trillion in value so far in 2022. Emerging from the ashes of the 2008 financial disaster, cryptocurrency is likely to retain its status as an investment option because its holders enjoy freedom from government and bank control. This advantage can become a drawback when it comes to preserving cryptocurrency. Before you consider including cryptocurrency in an estate plan, it is imperative that you hang on to your digital cash on a day-to-day basis. This involves preserving the passwords and digital wallets (storage units) connected to your cryptocurrency. This will avoid a disastrous situation like the one that befell a Welsh man who accidentally threw away half a billion dollars’ worth of Bitcoin.[1] Consider the following options to preserve your cryptocurrency: Hot wallet: An online app that provides convenience but is vulnerable to being hacked or stolen Cold wallet: An offline storage device that avoids hacking but is a small item and easily misplaced Custodial wallet: A third-party crypto exchange that holds your coins, avoiding the risk of losing the device, although the company could freeze your funds or be the target of a cyber attack Paper wallet: A printed list of keys and QR codes that is safe from hackers but easily misplaced Tax Consequences to Consider Another important consideration is that the Internal Revenue Service (IRS) considers cryptocurrency to be property rather than currency. That means it is subject to capital gains tax. Whether the owner holds it for longer than twelve months determines whether the IRS will assess short-term or long-term capital gains tax. Exchanging cryptocurrency for fiat currency (a country’s official money) is a taxable event, as is exchanging one kind of cryptocurrency for another (e.g., exchanging Bitcoin for Ether). If you are in the business of selling or creating cryptocurrency (called “mining”), ordinary income tax rates will apply. What about NFTs? NFTs are unique digital collectible items. They are based on the concept “I own this.” It does not matter what “this” is, just that it is valuable or may gain value someday. That is why various digital collectible assets, such as the following, can be characterized as NFTs: Digital artwork Video clips Social media posts Memes Gaming tokens Digital real estate While being the owner of the virtual Pyramid of Giza may seem silly today, who knows how much it will be worth tomorrow? This makes a little more sense when we think about emerging technologies like virtual […]
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