Posts Tagged ‘estate planning’
Are life insurance proceeds subject to the debts of the deceased person?
Posted by: David Leon in Estate planning and probate, Insurance Law on December 25th, 2009
In most cases, no, life insurance proceeds are not subject to estate debts. The most common exception is when the “estate” is a listed beneficiary (which is improper under Texas law, but that’s a discussion for another day.) In most cases, life insurance is a contract between the insured and the life insurance company, to pay benefits to a beneficiary. The deceased person’s estate (to which most debts attach) is not involved in the process. The notable exceptions are life insurance policies specifically geared towards credits. A common example is a credit life policy. In this policy, an insured purchases a policy to cover a specific debt, such as a mortgage. This way, should the insured die, the mortgage is paid off in full.
How does one qualify to be an administrator or executor of an estate?
Posted by: David Leon in Estate planning and probate on August 9th, 2009
If someone is appointed as an executor in a will, or someone applies to be an administrator of an estate, the person cannot be “disqualified” under Sec. 78 of the Texas Probate Code. This section specifically prohibits the following people from administering an estate:
(a) An incapacitated person;
(b) A convicted felon, under the laws either of the United States or of any state or territory of the United States, or of the District of Columbia, unless such person has been duly pardoned, or his civil rights restored, in accordance with law;
(c) A non-resident (natural person or corporation) of this State who has not appointed a resident agent to accept service of process in all actions or proceedings with respect to the estate, and caused such appointment to be filed with the court;
(d) A corporation not authorized to act as a fiduciary in this State;
or
(e) A person whom the court finds unsuitable.
What is separate property?
Posted by: David Leon in Estate planning and probate, Family Law on July 5th, 2009
Community property versus separate property deals with marriages. Texas Constitution Art. 16, Sec. 15 gives a lengthy explanation. The definitions are further spelled out in Texas Family Code Sec. 3.001.
All property, both real and personal, of a spouse owned or claimed before marriage is separate property. Further, property acquired afterward by gift, devise or descent, shall be the separate property of that spouse. Additionally, damages for personal injuries are considered separate property (with the exception of loss of earning capacity.)
For example, Bobby and Allison are about to marry. Before marriage, Bobby buys a boat. After marriage, Bobby’s uncle gives Bobby a car. Bobby’s aunt then dies, leaving Bobby a house. Because the boat was purchased prior to the marriage, it’s separate property. Because the gift of the car was a gift to Bobby, it’s separate as well. Finally, because Bobby received the house by inheritance, it’s also Bobby’s separate property. If Bobby gets into a car wreck and receives a check for settlement of his personal injury, that would be (in most instances) his separate property as well.
What is a ladybird deed?
Posted by: David Leon in Real Estate Law on July 4th, 2009
A ladybird deed is a type of life estate, with added features. In a normal life estate, the holder of the life estate interest may not sell, mortgage or encumber the property, absent permission from the remainderman. The life estate owner only has occupancy and use rights for the duration of the person’s life.
A ladybird deed (also called an enhanced life estate) allows the enhanced life estate owner to sell, mortgage or encumber the property. If the enhanced life estate owner sells the entire property, the remainderman’s interest is extinguished.
How is a life estate set up?
Posted by: David Leon in Real Estate Law on July 4th, 2009
There are a number of ways to set up a life estate. Most common are life estates that are set up by operation of law (under the Texas probate code) and life estate pursuant to a deed.
The most common life estates under the Texas probate code occur when a person dies without a will (called an intestate death.) In very specific circumstances, a surviving spouse may have a life estate in the deceased spouse’s homestead, with a remainder interest in the deceased’s children.
Otherwise, people may, as part of estate planning, or probate avoidance planning, set up life estates in land, and transfer them by use of a life estate deed.
What is a remainderman?
Posted by: David Leon in Estate planning and probate, Real Estate Law on July 4th, 2009
A remainderman, more commonly referred to as a remainder interest, is a person or entity that receives a property after a certain condition has been met.
The most common remainder interest occurs when someone who has a life estate interest in a parcel of land dies. The property then becomes owned by the remainderman.
For example:
John owns a farm. John grants Juan a life estate interest in the farm, with a remainder interest to Joe. Juan has the ability to occupy the farm for his lifetime. Upon Juan’s death, Joe inherits the property, because he is the remainderman.
What is a life estate?
Posted by: David Leon in Legal news and errata on July 4th, 2009
A life estate is the right to occupy or use a specified parcel of land for the period of a person’s life.
For example:
John owns a farm. John grants a life estate in the farm to Juan. This means that Juan can use or occupy the farm for the rest of Juan’s life. Upon Juan’s death, the property will either revert back to John, or will be passed to a “remainderman” (depending on how John set up the life estate.)
What is exempt personal property?
Posted by: David Leon in Estate planning and probate, Litigation and judgments on June 28th, 2009
Exempt personal property means that the property is (under most circumstances) unavailable for attachment by creditors.
Exempt personal property is covered by chapter 42 of the Texas Property Code. Section 42.001 provides that :
(a) Personal property, as described in Section 42.002, is exempt from garnishment, attachment, execution, or other seizure if:
(1) the property is provided for a family and has an aggregate fair market value of not more than $60,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property; or
(2) the property is owned by a single adult, who is not a member of a family, and has an aggregate fair market value of not more than $30,000, exclusive of the amount of any liens, security interests, or other charges encumbering the property.
(b) The following personal property is exempt from seizure and is not included in the aggregate limitations prescribed by Subsection (a):
(1) current wages for personal services, except for the enforcement of court-ordered child support payments;
(2) professionally prescribed health aids of a debtor or a dependent of a debtor;
(3) alimony, support, or separate maintenance received or to be received by the debtor for the support of the debtor or a dependent of the debtor; and
(4) a religious bible or other book containing sacred writings of a religion that is seized by a creditor other than a lessor of real property who is exercising the lessor’s contractual or statutory right to seize personal property after a tenant breaches a lease agreement for or abandons the real property.
(c) Except as provided by Subsection (b)(4), this section does not prevent seizure by a secured creditor with a contractual landlord’s lien or other security in the property to be seized.
(d) Unpaid commissions for personal services not to exceed 25 percent of the aggregate limitations prescribed by Subsection (a) are exempt from seizure and are included in the aggregate.
(e) A religious bible or other book described by Subsection (b)(4) that is seized by a lessor of real property in the exercise of the lessor’s contractual or statutory right to seize personal property after a tenant breaches a lease agreement for the real property or abandons the real property may not be included in the aggregate limitations prescribed by Subsection (a).
What is business succession planning?
Posted by: David Leon in Business law, Estate planning and probate on March 12th, 2009
In some cases, a family business is the most important asset in a family’s financial well being. Business succession planning is a type of estate plan for people with family owned businesses. The specific planning includes who takes care and runs the family business after the passing of the principal owner or operator. The business succession planning typically includes life insurance planning, estate planning and contract law. The cost and complexity of a business succession plan vary with the type of business, and the objective of the plan. Contact Us for more information.
What is business insurance planning?
Posted by: David Leon in Business law, Estate planning and probate, Insurance Law on March 6th, 2009
Business insurance planning includes insurance against the loss of a key person who is vital to the survival of a business. This type of policy can be used to inject cash into a business in order to survive while you replace the lost person. It can also cover buy/sell agreements, allowing the surviving member of the business to buy out the deceased member’s interest. Other types of insurance planning include wholly owned or captive insurance companies, umbrella insurance policy planning and commercial liability. Contact Us for more information.
How do I revoke a will in Texas?
Posted by: David Leon in Estate planning and probate on March 6th, 2009
In Texas, a will may be revoked by overt act (such as tearing it up) or by publication of a new will that expressly revokes the prior will. Contact Us if you would like to revoke a will, or draft a new estate plan.
What are the different types of powers of attorney?
Posted by: David Leon in Estate planning and probate on February 28th, 2009
There are a few different types of powers of attorney. Here are the more common ones:
1. General power of attorney: This document allows the power holder to sign the power grantor’s name on legal documents. The powers are broad and sweeping. The power holder owes a fiduciary duty to the power grantor. The power continues until the power ends on its own terms, or is revoked, the grantor dies or becomes incompetent.
2. Durable power of attorney: A power of attorney typically ends with the death or incompetence of the grantor. If the power is made “durable” then the power does not cease on the incapacity of the grantor. The power will end by either the death of the grantor, or the removal of the power holder by a court.
3. Springing power of attorney: This power of attorney comes into effect upon a future condition. Typically, this is the incapacity of the grantor. The power remains in effect until either the death of the grantor, removal by a court or capacity being restored to the power grantor.
4. Limited power of attorney: This power of attorney is limited to a specific transaction. Typically, this arises in a real estate context, where someone gives permission to sign closing documents on behalf of another.
5. Medical power of attorney: This is an entirely different type of document which allows a person to make medical decisions on behalf of another. These decisions cannot override the power grantor’s expressed wishes. The power only comes into effect if the power grantor is unable to make his wishes know. This document also does not allow one to make end of life decisions. If you have this document, you should discuss it with your primary care physicians ahead of any important procedure.
6. Guardianship declaration: This is document that appoints someone to care for your person if you are unable to care for yourself, or after a finding of incompetency.
7. Living will, physician’s directive, DNR: This is a companion document to the medical power of attorney. This document tells a health care provider whether or not you want to be kept alive in either an irreversible unconscious mental state, or use heroic measures to keep you alive if you are suffering from a terminal condition.
What is a revocable living trust?
Posted by: David Leon in Estate planning and probate on February 20th, 2009
A revocable living trust is a mechanism in which a person can title assets to a trust, but can still terminate the trust and take back the assets during his or her lifetime. Most trusts provide that the trust will become irrevocable once the testator (the person who sets up the trust) becomes incapacitated or dies. These revocable living trusts are typically used in complex estates, older people or unmarried couples. Contact us for more information about setting up a revocable living trust.
How do you dispose of a deceased person’s property if there was no will?
Posted by: David Leon in Estate planning and probate, Real Estate Law on February 20th, 2009
There are several ways to dispose of a deceased person’s property in Texas. Assuming the person died intestate (without a will), the Texas laws of decent and distribution would control the disposition. The types of procedures necessary to document the transfer of assets would depend on the status of the estate.
I was a common law spouse when my spouse purchased a life insurance policy. I wasn’t listed as a beneficiary. Is there anything I can do?
Posted by: David Leon in Estate planning and probate, Family Law, Insurance Law on February 15th, 2009
Possibly. If you meet the statutory requirements for being a common law marriage at the time the policy was purchased, and community funds were used to purchase the policy, then the policy may be considered community property. The surviving spouse would be considered a one-half owner. These tend to be fact specific matters. Please contact us if you would like to discuss this further.
Are insurance policies generally characterized as separate or community in Texas?
Posted by: David Leon in Estate planning and probate, Family Law, Insurance Law on February 15th, 2009
Texas follows “inception of title” when classifying life insurance proceeds. This means that ownership of the policy is established by the source of funds for the first premium. If that premium was paid prior to the marriage or with separate property, then the policy may be considered separate property. This is a highly technical area of law, and matters are case-specific. Please contact us if you would like to discuss a matter further.
In re Estate of Wilson — Lost Will
Posted by: David Leon in Estate planning and probate on August 24th, 2008
In re Estate of Wilson, 252 S.W.3d 708 (Tex. App.-Texarkana 2008, no pet.h.).WILLS — Lost WillAfter Husband died, Wife was successful in probating Husband’s will eventhough she could not locate the original will. Son (Wife’s step-son)contested the probate of the will claiming that the evidence was legallyinsufficient to rebut the presumption of revocation that arises when theoriginal will cannot be located.The appellate court agreed with Son. The court began its analysis byrecognizing that when a will was last known to be in the testator’spossession and cannot be located after death, a presumption of revocationarises which can be rebutted by a preponderance of the evidence. The courtalso explained that “the testator’s continued affection for the chiefbeneficiary [of the will], without evidence tending to show the decedent’sdissatisfaction with the will or any desire to cancel or change the will, issufficient to rebut the presumption of revocation of a missing will.”Wilson at 713.The court then examined the record and found it lacking of any directevidence of why the original will could not be located. Wife’s merestatement that as far as she knew and believed, Husband had not revoked thewill is not evidence of the asserted facts. In addition, there was noevidence of Husband’s continued affection for Wife or that Husband hadcontinued to recognize the will’s validity. Accordingly, the court heldthat the evidence was legally insufficient to rebut the revocationpresumption and remanded the case to the trial court.Note: This case also involved several procedural issues such as therequirements of a restricted appeal, when evidence is considered legallyinsufficient, and proper extent of a remedy (render or remand).Moral: Original wills need to be protected so that they are available atthe time of probate and are not inadvertently lost, destroyed, or located bydisgruntled heirs.For summaries of other recent Texas cases, please follow this link:http://www.professorbeyer.com/Case_Summaries/Texas_Case_Summaries.htm.Posted with permission of the author:Gerry W. BeyerGovernor Preston E. Smith Regents Professor of LawTexas Tech University School of Law
What is a living will?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
A living will is a document that notifies your health care provider of your wishes regarding comfort care, and the provision of life support if you are ever in a persistent vegetative state. You can select whether to be kept alive or not, and whether or not to receive comfort care. This document is also called an Advanced Directive.
I executed a medical power of attorney. Can someone override my decisions?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
No. So long as you are competent, you can revoke a power of attorney, medical or otherwise. Also, the medical power of attorney is only in effect if you are unable to make your decisions known.
What is a medical power of attorney?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
A medical power of attorney is a document that allows someone to make medical decisions on your behalf if you are incapable of making them yourself.
I need to get a power of attorney for someone but that person is not competent. What can I do?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
If the person is not competent, and will not be competent in the near future, you cannot obtain a power of attorney. A power of attorney can only be executed by a competent person. If you need to handle the affairs of someone who is incapacitated, then you will need to obtain a guardianship of the person.
Can I get a power of attorney for an incompetent or incapacitated person?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
No. You need to be competent in order to execute a power of attorney. If a person has degenerative disease, but has periods of competency, it may be possible to have that person execute a durable power of attorney during a period of lucidity. The durable power of attorney will continue to operate after the person is incapacitated.
What is a durable power of attorney?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
A durable power of attorney is a document that allows someone to act on behalf of you. The power can take place immediately and continue to work if you are later declared incompetent, or it can spring into action if you are later declared to be incompetent. The “durable” portion means that if you are ever declared incompetent (incapable of managing your own affairs) then the person may act on your behalf. The person to whom the power is granted owes a fiduciary duty to the power grantor.
What is a power of attorney?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
A power of attorney is a document that allows a person to act on behalf of another person. This power can be limited, which means that the person only has permission to do specific tasks (such as sign a document) or general (giving broad powers). The person holding the power of attorney owes a fiduciary duty to the power grantor.
Why are people telling me to avoid probate?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
In Texas, probate can be a very simple and inexpensive process, if planned properly. As such, probate avoidance should not be the goal of an estate plan. A more appropriate goal should be tax avoidance or ease of estate administration. This allows an estate planner to use the full suite of estate planning vehicles in planning. In some instances, a person may be worried about their beneficiaries or heirs fighting over estate assets. In other cases, people just don’t trust the court system, or are unfamiliar with the probate process.
What is an estate?
Posted by: David Leon in Estate planning and probate on December 8th, 2007
An estate is simply the property that belongs to a person. In Texas, an estate is not a legal entity, so an estate cannot sue or be sued by someone.
