Elderly residents should be wary of high-pressure tactics from overbearing salespeople who pressure them into giving them your financial information. Be wary of con artists throwing around probate law terms like “executors.” You should always be suspicious of claims from scam companies promising that you can significantly reduce your estate taxes by creating living trusts. A written will can also help you reduce your taxes and are often less expensive to create. Promises that a living trust will help you receive federal or state government assistance are false. Finally, you should be wary of overinflated claims from fraudulent salespeople guaranteeing that you can save lots of money in federal taxes by creating living trusts.

Only a licensed attorney can help you decide if a living trust would appropriate serve your estate planning needs and only after carefully discussing your goals with you.

Although living trusts can provide some tax benefits, so can other estate planning tools, including making lifetime gifts. Unfortunately, not all consumers understand the specific legal advantages to creating living trusts. Without proper legal training and consulting, consumers often unintentionally overemphasize the utility or benefits to creating living trusts. These myths helped fraudulent and deceptive businesses devise living trust scams. Scaring consumers, mainly elderly consumers, into believing they should create living trusts, living trust scam artists sell fake living trust forms and kits.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

As discussed in the last blog, the Texas Attorney General and Texas Bar brought living trust scams to our attention. Living trust scam artists purporting to sell living trust kits or documents prey upon elderly consumers’ fears. Unfortunately, these kits are often worthless and can cost thousands of dollars. Other living trust scam businesses sell living trust products in an effort to obtain a consumer’s private financial information. Deceptive living trust salespeople may visit you at home or call you by telephone in an effort to persuade you into buying a worthless living trust kit or do it yourself form. The Attorney General of Texas recommends you contact your local law enforcement if you suspect you are the victim or intended victim of a living trust scam.

Con artists selling living trust kits or forms may scare you into believing that using wills instead of living trusts will save you years in unnecessary probate court procedures or thousands of dollars in court costs. You should realize that will contests or claims challenging the validity or authenticity of a probated will are very unlikely. Only a probate law attorney can decide if a living trust is suitable for your estate planning needs, and only a licensed attorney should help you draft this document tailored to your individual needs. A salesperson selling fraudulent living trust services may face criminal or civil sanctions by practicing law without a professional license.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Beware of living trust scams targeting elderly residents across the nation. A living trust is a written legal instrument allowing you to place your assets into trust for the benefit of your beneficiaries. A trustee manages the living trust on your behalf. The written instrument earns its name from the fact that you create a living trust while you are still living. A living trust may be irrevocable or revocable. You may not alter or revoke an irrevocable living trust document, unlike a revocable living trust, which you can revoke or amend. Living trusts are useful estate planning tools, but they are not appropriate for everyone.

A living trust is not a one-size-fits-all solution to estate planning. Typically, a living trust is only one part of your estate planning documents, which also includes a written will. Furthermore, a living trust must comply with specific state laws, and in Texas, the Probate Code establishes the statutory requirements when creating a valid living trust. A living trust does not help you avoid probate; since a will and a living trust is not the same thing, although they may serve similar purposes. An attorney licensed to practice law in Texas will probably not use prepackaged living trust forms and will help you create a specifically tailored document.

If you fall victim to a living trust scam, you may have a right to cancel your transaction within three days under federal law if you entered into it during a door-to-door sales transaction.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

A health care directive is an instructional document providing your primary care physician, your family and anyone else you list the information necessary should you become incapacitated. This document outlines what you do want to happen medically, as well as what do you do not want to happen. This differs from a medical power of attorney that appoints an individual to speak on your behalf, as well as make medical decisions for you, should you become incapacitated. This instructional document provides protection from any decisions you do not want made on your behalf.

When creating a will (as well as creating a trust, if applicable), write out your healthcare directive as part of your estate planning process. Estate planning goes beyond that of assignment of assets and properties following your passing, but it is also necessary to maintain your well being until your passing. Without this document, or set of documents depending on how many components you include, your estate plan is incomplete because your health care decisions are not being addressed.

Be aware that there are two types of directives and each should be handled as either separate or combine parts the estate plan. The living will is the first type of healthcare directive, and is an instrument created providing information to your primary care physician, or other health care provider, with your medical wishes. Laws vary from state to state with regard to how to handle a living will, so be sure to confer with your estate planning attorney about how to incorporate this legally into your estate plan. Remember, though, that this document merely provides healthcare providers with instructions regarding your care when you are unable to make decisions or give direction.

The second type of healthcare directive is the assignment of a medical power of attorney. During the creation of a medical power of attorney document, you must name an “agent.” The agent is the person who signs the medical power of attorney document stating they are willing and able to sign documents, speak to health care providers, make medical decisions and seek second opinions when you are incapacitated. Like living wills, laws vary from state to state regarding the rights and responsibilities regarding the medical power of attorney. Before assigning an agent, be sure to hold a conversation with then to ensure they are able to handle this responsibility and are willing to do so.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Another disadvantage of dying without a validly created will is that Texas law treats a lifetime gift only as a gift and not as an advancement of a future bequest. For example, if you intended to count a niece’s car as a gift against her future inheritance, you need to state such in your will. If you do not create a will, the Texas Probate Code treats the gifted car as a gift and not as an advance. This can become a problem if you intended to give your children equal shares of your assets but gave one a sizeable lifetime gift to count toward her inheritance.

By neglecting to draft a will, you cannot select who will be responsible for administering your estate. If you drafted a will, you could select your attorney, a family member or trusted confidante to administer your estate. If you die intestate, a court may have to appoint an individual to act as your personal representative, and the appointed individual may not have any relationship to you. Furthermore, if a court appoints a family member to serve as the personal representative of your estate, she may have to post a bond with the court to ensure timely payments to creditors and distributing your property to your heirs. This may be expensive, depending on the size of your estate, and it may be difficult for her to afford without her inheritance.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

As previously discussed, a major disadvantage to dying intestate is the lack of control you have as to who will inherit your property. If you wanted to leave a large portion of your estate to a special nephew, you must do so by will. If you do not create a will, your nephew only receives his intestate share of your property, as established by the Texas Probate Code. If you die with a surviving spouse and children, they will receive most of your property, and your nephew may not receive anything. This would not occur had you created a will because of the Texas laws against forced heirship with testate residents. Similarly, if you intended to leave your girlfriend a portion of your estate, she will not receive anything under the Texas Probate Code’s intestacy rules of succession because she is neither your surviving spouse nor a blood relative. If you want to leave property to an unrelated caretaker who cared for you when you became ill, your caretaker will not receive anything pursuant to the intestacy statute.

Dying intestate may lead to unnecessary delays during the probate process, and a significant amount of time may pass before your heirs will receive their inheritances. In the interim and during the delay, your heirs may no longer be alive to receive their property. A probate court may have to locate missing heirs and confirm their family ties to you before making distributions. Your heirs could also contest their intestate shares by filing challenges with a probate court.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Each state’s intestacy laws will establish what happens to your property if you die without a will. In Texas, the Texas Probate Code governs who receives your property and the order of priority in those distributions. The Texas Probate Code establishes an order of intestate succession or distribution scheme for residents who died before and after Sept. 1, 1993. After Sept. 1, 1993, the beneficiaries of your property depend on their degree of kinship to you. The Texas Probate Code automatically gives certain heirs and your surviving spouse a legal right to inherit your property. If you did not want to leave property to certain heirs, you need to draft a valid will. You cannot usually totally disinherit your surviving spouse or dependent children by will alone.

There are many disadvantages to dying without a validly created will. A common disadvantage is that you retain almost no control as to which heirs inherit your property. If you wanted to leave certain friends, colleagues and charitable organizations property, you need to create a valid will, since the state’s intestacy rules do not include them. By creating a valid will, you can avoid most of these pitfalls. Scheduling an appointment with our office is the first step in helping you avoid them by creating a will.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Do you have a pet you want to ensure has a good home and are well taken care of following your passing? Be aware that such provision allowances vary from state to state. While many pet parents view their pets as they would their own children, provisions for pets fall into a completely different category. Pet owners value the idea to provide care and comfort similar to children, but laws dictate that they be treated as possessions in some states.

Based on the residence of the pet owner, there are three options they can exercise regarding their pet’s care following their passing:

1. Establish a Pet Trust: out of all the states, forty of them offer this statute. Pet trusts are established primarily for when the owner of the pet passes away, but they can also be effective should the pet owner not be able to take care of their pet anymore. A trustee must be named, and there must be a fund established to use toward the care of the pet. The trustee will act as sole caregiver of the pet, otherwise referred to as the trust property.
2. Create a will: in the remaining states that have not created a statute for pet trusts, pet owners must leave their pet to a caregiver, the pet’s belongings, as well as the funds necessary to care for their pet, to a beneficiary named in their will. The will must state that the beneficiary is responsible for taking care of the pet for the remainder of the pet’s life. Specifications regarding the care-taking fund must also be made with regards to the caregiver giving up the pet prior to its death; otherwise they will still have access to that fund. In order to prevent that from happening, establish a beneficiary you can trust well in advance.
3. Find an Organization: when the other two options are not exercisable, finding an organization to help you place your pet following your passing is the best way to go. Funds for this process must be included in your will with the organization being specified. Confer with your estate planning attorney regarding the best way to handle this option to ensure your pet goes to a good home.

Pet planning is a very important ingredient in the estate planning process, and should be handled with care. Pet parents sometimes make the mistake of leaving their pets out of their plans not realizing the ramifications involved.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

There are many challenges blended families face, and estate planning is no exception. While there are support groups and therapists to help blended families learn to mesh in a way that works for everyone, this much attention is not paid to estate planning. This is an unfortunate and expensive mistake, particularly if the matters go into probate. Like estate planning for non-blended families, minimizing estate taxes is a priority. However, additional challenges include provisions for your new spouse, removing your ex-spouse as a beneficiary and providing protections for your children (if you have any).

How do you protect your own children?

If you have an estate plan already in place, you must remove your ex-spouse in order to prevent them from inheriting anything, including your retirement. If you have no estate plan in place yet, create a will and create a trust outlining your new spouse as beneficiary. Keep in mind that, if you have children, your ex-spouse is likely to be named manager of your children’s inheritances in probate court. Creating a trust for your children offers protection that their inheritances will not waste away. Confer with an asset protection attorney in order to work on asset protection planning.

Are there protections for your new spouse?

There are certain conditions you must take into consideration with regard to assets and property with your new spouse. Typically, in a blended family, these things are not separated. So, in the case of your passing, it’s possible your stepchildren will inherit. By creating wills and trusts, you many not necessarily be providing the type of protections for your children and your new spouse you might think you are. Confer with an estate planning attorney regarding all questions you have regarding this matter, as well as what will happen with your assets if your spouse remarries following your passing.

How are taxes handled?

Estate taxes, along with any other type of taxes for that matter, are tricky and easily misunderstood by the inexperienced. There are expensive mistakes one could make with regard to estate taxes that could cost in the thousands if not careful. Issues with regard to inheritance taxes could also become a reality. This is another area where it is vital to have an estate planning attorney or estate planning lawyer. Otherwise, you will lose tax benefits and lose certain tax sheltering and the IRS will become a bit richer in the process.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Estate Planning:  http://www.domain.com/estate_planning/estate-planning/
As previously mentioned, Texas law allows residents to exclude a broad range of personal property as exempt homestead property set-asides. Exempt personal property set-asides include any personal property of up to $60,000 per family or $30,000 for unmarried residents. This includes household furnishings, business property and tools, clothing, toys and books. Texas homestead exemptions include farming or agricultural equipment, some agriculture livestock and household pets and athletic equipment. The agricultural and farming exemption allows you to set-aside up to 12 cattle, up to 60 other livestock, domestic pets and 120 fowl. Texans may exclude up to two firearms as homestead set-aside property.

The homestead exemption does not distinguish between community and separate property. Thus, separate property acquired before marriage and separate property acquired by gift or inheritance during and after marriage is subject to the exempt treatment. Homestead property also includes community or marital property acquired by one spouse or both spouses during marriage. As such, if the homestead exemption attaches to any item of real or personal property, it does not matter when it was acquired. Thus, if you die with only community property, your surviving spouse may be able to inherit your entire estate as a surviving owner. As previously discussed, although most creditors cannot reach homestead and set-aside property, some secured creditors may be able to use them to satisfy their existing debts. Because of the homestead property exemption laws, understanding what your probate assets include and what creditors cannot reach is important, and we may be able to further explain the provisions.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.