Do I Need a Trust?
Frequently, my clients ask me if they need a trust. Clients frequently ask about probate and ask “How can probate be avoided?” My answer is that it depends but there is a good chance that a trust is not what you need. There are times that a revocable living trust is an effective estate planning tool but for many clients, it is a waste of money. Trusts are promoted by many websites and literature that the public receives. Trusts are not a solution for all. To determine if a trust is a good idea for you, it should be discussed with an estate planning attorney. Please call our office to set up a free consultation. Reasons A Living Trust Might Not Be Necessary 1. Probate is not complicated. Probate is not expensive if you have a good will and competent counsel. The price for creating a revocable living trust, funding it, making transfers into the trust, and related documents will far exceed the cost of probate for a will that was properly drawn up to provide for independent administration. 2. Probating an estate of a properly drafted will is not timely or a lengthy process. Texas law streamlines the probate process and rarely are there long delays when there is a properly drafted will. An independent administration under a well-drawn will requires only one hearing and minimal court involvement in the process thereafter. A competent, conscientious executor will move the process along quickly unless there are unusual complications. 3. You can avoid probate of many assets by placing them in joint tenancy with the right of survivorship, beneficiary designation, or payable on death designations. This is a better and simpler way of passing on many assets upon death rather than spending the money to place assets in a living trust. If beneficiaries are minors or have special needs, you may require a trust but this can also often be accomplished in a good will. 4. Living trusts are currently not needed by most individuals for estate tax planning. Under current estate tax regulations, unless you have an estate worth more than $12 million per person, you have no need for a living trust to avoid estate taxes. This could change in the future if Congress changes the estate tax laws. 5. If assets are not added to the trust, the purpose of having a living trust can be defeated and probate is still required. When a person has a revocable living trust, all assets must be properly titled. If this is not done, there may still be a probate required to transfer the title, and the expense is multiplied. Reasons You Might Need A Trust 1. Ownership of property in different states or many counties in Texas may require a living trust. 2. A person needs special assistance in managing assets or special needs children. 3. A person wants to provide special conditions to receive assets. If you have questions about whether a trust would be a good fit for you and your family, please contact the office at 713-467-1760 to schedule a consultation.
Continue ReadingWhat 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.
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