What is a Transfer on Death Deed?
A Transfer on Death Deed is a tool that allows you own and control real property during your lifetime and then pass your real property to beneficiaries after your death without having to probate your estate. A Transfer on Death Deed needs at least one beneficiary but can have multiple beneficiaries and can have contingent beneficiaries should a primary beneficiary predecease you. The Transfer on Death Deed must be recorded in the Deed Record of the County where the real property is located prior to death. Other than passing real property outside of the probate process, a benefit of Transfer on Death Deeds is that it protects your homestead real property from a Medicaid recovery claim if you receive Medicaid benefits.
For more information on Transfer on Death Deeds and Medicaid Planning In The State Of Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (830) 625-9300 today.
Estate planning for a blended family
There are many ways to estate plan for a blended family and below are four of the most typical ways to address estate planning for a blended family:
Reciprocal wills: Each spouse makes a will to provide for the surviving spouse and then the children/step-children. This is the simplest form of estate planning but leaves the risk that the surviving spouse revokes their will and leaves nothing to the children of the spouse that predeceased them.
Independent (non-reciprocal) wills: Each spouse makes a will independently, without involving the other spouse. The will of each spouse may or may not provide for the surviving spouse and may or may not provide for the children from a prior marriage or step-children.
Testamentary trust: The spouses could create wills with testamentary trusts where the decedent’s trust is funded at death with separate property and the decedent’s one-half of community property and becomes irrevocable. The surviving spouse benefits from the trust if needed but the remainder of the estate is distributed to the decedent’s children upon the death of the surviving spouse.
Life insurance: Life insurance allows for providing something to a surviving spouse or surviving children even if the estate does not provide for them. However, if someone has waited until they are older or in poor health, life insurance may not be an option.
If you have a blended family and would like to discuss options for your estate, we would be happy to help you. Call the Law Office of Roy Neal Linnartz, PLLC to schedule a time to discuss your plan, (830) 625-9300.
A Living Trust is a trust created and funded during the Trustor’s (sometimes called Grantor or Settlor) lifetime which is typically for the benefit of the Trustor during Trustor’s lifetime and then provides for other beneficiaries after the death of the Trustor. The primary purpose of a Living Trust is usually to avoid the probate process but a Living Trust can be created to plan for many other purposes. If the purposes of the Living Trust is to avoid probate, all property must be owned and titled to the Trustee during Trustor’s lifetime or probate will still likely be required for property not titled to the Trustee. When a Will is probated, the property of the decedent is distributed at that time but a Living Trust also allows for property to be held and managed beyond the decedent’s death thus giving control beyond the grave for a period defined in the Living Trust (with limits).
A Testamentary Trust is a trust which is included in a Will and which is created and funded after death. Testamentary Trusts can be used to plan for most things a Living Trust can be used for other than avoiding probate. The benefit of a Testamentary Trust is that the Trustor does not have to worry about having all of their property titled to the Trustee, which is very abstract to most people. If the purpose of creating a trust is to protect assets for children, plan for a special needs family member, or tax planning, these, among other things, can be usually be done in a Testamentary Trust without the need to manage a trust during a person’s lifetime.
If you would like to discuss how a Living Trust or Testamentary Trust can benefit you, please contact the Law Office of Roy Neal Linnartz, PLLC at 830-625-9300.
A Power of Attorney is the granting of authority for another person or persons to handle certain decisions or transactions on your behalf. A Power of Attorney is a decision made by you to allow someone else to have authority to make decisions but it doesn’t remove your power to make those decisions yourself. It merely authorizes someone else to also be able to act with whatever authority you have granted. A Power of Attorney is easy to create and easy to revoke.
A Guardianship takes away some or all decision making authority and grants it to someone else under the authority of a court. Once the court determines that some or all decisions need to be made by someone else, the individual’s power to make decisions is taken away unless or until restored by the court. Guardianships require medical examinations and the appointment of an attorney to represent the person whose rights are proposed to be taken. Because a guardianship is taking away someone’s rights to make decisions, it can be a traumatic process and is usually the last option.
Prior to a Guardianship, it is important to look for less restrictive alternatives such as Powers of Attorney, Surrogate Decision Making, Supported Decision Making Agreements, Trusts, or other arrangements. If someone is concerned that they may require a Guardianship in the future, they can designate who they would or would not want to serve in that role.
If you or someone you know needs help with a Power of Attorney, Guardianship, or some less restrictive alternative, please call the Law Office of Roy Neal Linnartz, PLLC and schedule a consultation. (830) 625-9300
The answer to this question could be simple or complex depending on the nature of the property you own and the makeup of your family when you die. For example, to keep things simple, let’s assume you have only been married once, you are still married to your spouse, and all children are shared with your spouse. Any separate property (see FAQ explanation of separate versus community property) which is real property would go to your children but your spouse would get a life estate in 1/3 of the real property if they survived you. Separate property which is personal property would be divided 1/3 to your spouse, if they survived you, and 2/3 to your children. Assuming the same family situation above, community property, both real property and personal property would go to your spouse if they survive you.
Let’s assume you have had more than one marriage and children from outside the marriage to your current spouse when you die. In this case, your surviving spouse would get 1/2 of the community property, both real property and personal property, and your children would get 1/2 of the community property, both real property and personal property.
Beyond the above illustration, it can get much more complex which is why it is so important to have an estate plan in place. Having a plan allows you to direct where your property goes when you die and makes the process so much easier for the people you leave behind.
If you need help with planning your estate, call the Law Office of Roy Neal Linnartz, PLLC at 830-625-9300 to schedule an appointment.
If you are an Executor appointed in somebody’s Will, you will likely need to take a few steps to handle the estate of the person who is deceased. Below are some of the basic duties of an Executor but generally, a probate attorney will help you with most of these tasks:
- Locate the Will and file it with an Application to Probate the Will and a Request for Letters Testamentary. Request a probate hearing date.
- Attend the probate hearing where you will sign a Proof of Death affidavit attesting to the facts of the decedent’s life, take and sign an Oath of Executor swearing to fulfill the terms of the Will, and order Letters Testamentary which will give you the legal authority to act on behalf of the estate of the decedent.
- Make a list of the decedent’s assets and liabilities; file an Inventory, Appraisement and List of Claims with the Court.
- Publish a Notice to Creditors in the local newspaper for any unknown creditors and send statutory Notices to Creditors for any known creditors.
- Determine whether creditor’s claims should be paid or rejected and take action accordingly.
- Send statutory Notices to Beneficiaries of the Will.
- File a final tax return and if necessary, an estate tax return.
- Once all creditors have been paid, the remaining assets of the estate are distributed according to the instructions in the Will. However, depending on your confidence in knowing all creditors have been paid, you may want to hold some funds back and distribute only after the statute of limitations have run for a creditor to make a claim and collect on it.
This is only a very basic list of tasks for an Executor for a very basic estate. There are generally other tasks as well. It is recommended, and required by most courts, that you obtain legal counsel to help with the probate process and you in your role as the Executor. The court costs and legal fees are paid from the estate so the Executor is not personally responsible for those expenses. If you need help with probate or your role as Executor, call the Law Office of Roy Neal Linnartz, PLLC for an appointment to discuss. (830) 625-9300
While generally speaking, probate is typically not difficult or expensive if you have a well-designed estate plan. However, if you do not have a complex estate, you may desire to plan for probate avoidance. Transfer on Death Deeds (TODDs) can be used to pass real property outside of the probate process and you can read more here: https://newbraunfelslawoffice.com/what-is-a-transfer-on-death-deed-and-how-can-it-benefit-me/. Enhanced Life Estate Deeds (aka Ladybird Deeds) can also be used to pass real property outside of the probate process.
Bank accounts, retirement accounts, investment accounts, and other accounts with financial institutions can be set up to pass without the necessity of probate. Accounts which are owned by more than one person can be set up to be owned by Joint Tenants with Rights of Survivorship (JTWRS). If one of the account owners dies, the surviving account owner(s) automatically owns the balance of the account. Depending on the type of account, the terminology may differ but the result is the same in naming a Beneficiary, Transfer on Death (TOD), or Payable on Death (POD) designee. While the designee is not an owner of the account, when the account owner passes, the balance of the account passes to the designee.
Vehicles can passed to a beneficiary by using the Beneficiary Designation for a Motor Vehicle form (VTR-121) from the Texas Department of Motor Vehicles. By completing this form, you can designate a beneficiary who will receive your vehicle if you die and the vehicle will not have to go through probate.
The above is a very basic description of some methods of probate avoidance. Use of these methods without planning can lead to unintended consequences so you should discuss with your financial planner as well as an estate planning attorney. If you would like assistance with planning for probate avoidance, call the Law Office of Roy Neal Linnartz, PLLC at 830-625-9300.
What is the HEMS Standard?
HEMS is an acronym for Health, Education, Maintenance, and Support. The HEMS standard is often used in trusts to give the trustee broad direction in determining how to provide funds to the beneficiary(ies). Health covers the healthcare needs of the beneficiary. Education covers tuition, room and board, and other relevant expenses of getting an education. Maintenance and Support are to ensure the beneficiary receives the same standard of living as they had been accustomed to, which can vary depending on the situation. For some people, Maintenance and Support may be basic such as food, clothing, and shelter. Maintenance and Support may be travel, vacation, and other luxuries for others. More specific instructions can be left for the trustee but care should be taken not to tie the hands of the trustee. Good intentions today can have unintended consequences tomorrow. Having a Trustee who knows the beneficiary intimately, such as a friend or family member, who can apply the HEMS standard can oftentimes be the best scenario. The trustee has broad latitude to make decisions for funding the beneficiary based on the HEMS standard and the knowledge of their family and lifestyle.
If you would like help with your estate planning, call the Law Office of Roy Neal Linnartz, PLLC at 830-625-9300.
How often should you review your Will and other estate planning documents?
If there is a death, birth, adoption, divorce, or other life-changing events in your life or the life of a beneficiary, executor, trustee, guardian, or power of attorney, it is worthwhile to review your estate planning documents to see if any changes need to be made. Also, if you have a Living Trust, it is worthwhile to review your trust documents annually to see if anything needs to be updated and to make sure all assets are properly titled.
Over time, changes in relationships, health, and who is still living can affect whether they can or would serve in the role designated. With certain changes, you may want to update or make changes to certain roles. This is especially true when designating spouses of a child, spouses of a friend, or spouses of a family member.
An attorney who works in estate planning can help advise you of recommended changes and help you make those changes to your estate plan. If you would like to review your estate plan with an attorney, call the Law Office of Roy Neal Linnartz, PLLC at 830-625-9300.
Why you need a Will, a Scenario:
- Decedent died intestate (without a Will). Decedent has 3 children from a prior marriage. Decedent remarried and had been married to his current wife for 20 years when he passed. Decedent had a farm he inherited (separate property), a homestead house purchased with his current spouse (community property), and $100,000 cash (community property).
- The 3 children get the farm but the spouse gets a life estate in 1/3 of the farm.
- Spouse gets 1/2 of the Homestead house and each child gets 1/6 of the house.
- *Spouse gets Constitutional right to occupy homestead during her lifetime.
- Spouse gets $50,000 of the cash and each child gets $16,666.66 of the cash.
The surviving spouse thought she was getting everything from her deceased husband’s estate and was shocked when told she did not get everything.
This is an oversimplified example of what can happen if you don’t have a Will. If you would like to schedule an appointment to discuss getting a Will or updating a Will or other estate planning documents, please contact the Law Office of Roy Neal Linnartz, PLLC at (830) 625-9300.
