In Texas, divorcing couples should consider how their divorce settlement agreements may affect their future estate planning rights. Family laws and probate laws overlap in many situations. In Texas, a surviving spouse has a right to certain community property and non-community property, including a homestead right to a life estate. If a divorce property settlement agreement contemplates otherwise, does a former spouse with a life estate right still have the legal right to live in the former spouse’s home? In most cases, the answer is “no.” Divorce typically extinguishes the rights that husbands and wives have to one another’s property after death. Because of the life changes that divorce brings, changing your estate planning documents is an important part of the divorce process. Speaking with an estate planning attorney about your divorce is a very smart decision and may help you save unnecessary time and frustration.

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

Another important consideration with life insurance beneficiary designations concerns spouses who are not required to carry life insurance policies as part of their divorce settlement agreements but fail to substitute beneficiaries. For example, imagine husband and wife divorce in 2010. Following the divorce, husband forgets to name a different beneficiary in his life insurance policy. Under Texas law, if Husband forgets to change his life insurance beneficiary designation, his former wife probably doesn’t have a right to his benefits upon his death. Instead, his life insurance benefits would go to an alternate beneficiary. If Husband did not name an alternate, the insurance carrier typically pays the benefits to his estate. If he dies without a will, then his benefits are payable to his intestate heirs according to the state laws of intestate succession. If he dies with a will, his benefits are payable to his surviving heirs named in his will. It is important to make changes to your estate planning documents, your life insurance policies and your retirement policies to avoid these issues following divorce.

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

Are you interested in pursuing asset protection planning for your estate, your assets and your properties? There tends to be a lot of controversy surrounding the topic of asset protection, and with good reason. Do you have assets and properties you wish to protect during your estate planning process? Have you read about asset protection plans that were not created correctly, and are now concerned regarding if you should put one into place?

This is not an uncommon concern and, I can assure you, a qualified estate planning attorney will not fail you with this effort. The problem lies predominantly with businesses cropping up as asset protection service providers, and they actually are not. Because so many people fell victim to these scams, it is no wonder there is distrust associated with asset protection planning. With that in mind, your best bet is to choose a reputable estate planning lawyer.

What exactly is asset protection planning?

You are quickly going to learn the importance of asset protection planning as you begin going through the estate planning process with your attorney. Each effort you make with your attorney to protect your assets using various tools such as creating a will or creating a trust, you are employing asset protection planning. You can protect your personal assets and properties, as well as assets and properties associated with a business you may own. There are some laws in place with regards to creditors, so follow the advice of your estate planning attorney with regards to how to handle (and remedy) these situations.

What are the various goals of asset protection planning?

You are going to work strategically with your estate planning lawyer to outline specific goals for your overall plan. All aspects of your plan must be addressed accordingly in terms of protection; otherwise your estate might end up in probate. Because probate court and probate attorneys each come with high price tags, you must ensure the funds in your estate are not depleting (quickly) by these unwanted expenses.

The addition of an incapacity plan is another important area you are going to want to cover with your estate planning attorney. The reason being is, if you are incapacitated, you want to ensure your assets and properties are protected effectively. If not, you may be in for trouble. Even if you do not believe incapacity is going to be a part of your future, plan for it anyway.

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

Asset protection is an important aspect of completing a comprehensive estate plan, but exactly what is it and what can it do for you?  Many consider asset protection to be a strategy used by those in professions that are exposed to litigation, such as a doctor, to protect their assets from potential claims.  While this may be one aspect of asset protection, estate planning considers asset protection for other purposes as well, such as:

• Protecting family assets from claims of creditors of beneficiaries;
• Preserving assets for the support of family members; and
• Planning the opportunities to preserve assets for future generations against the catastrophic costs of long term care.

An asset is considered to be anything of value, such as stock, personal property and real estate.   It would seem on the surface to be a fairly simple issue, if you have too many assets to qualify for certain benefits or you are facing a lawsuit, simply give them away to family members.  This is not the case – gifting assets, transferring real estate or using a joint account may not protect the asset, can complicate benefit eligibility and leave you vulnerable to claims.

Asset protection is particularly challenging for senior citizens and is best addressed by preplanning and establishing an estate plan that allows contingency planning, long term planning and planning for disability and health care issues.

Special planning techniques are needed to navigate the complex laws regarding asset protection.   An experienced asset protection attorney explains the laws in easy to understand terms and explains the strategies that can be used to protect your assets and preserve them for future generation.

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

No one likes to think about it, but it’s a fact of life. At some point, we will all need to have our financial affairs in order because everyone passes away. Making decisions early will allow you to have some semblance of security that your loved ones will be taken care of and will go through less grief when it comes to your financial affairs. Here are five things you can do to get your financial affairs in order.

First, you should really consider having life insurance especially if you have young kids or own property. If you think you may have estate taxes when you pass away or you will a lot of debt, it makes good sense to have life insurance. Purchase it as young as possible so that you will get better rates.

Second, you need to make certain that you have a financial power of attorney who can make decisions about your finances in case you become incapacitated. For instance, if you were to end up in an accident and then in a coma, you will need someone who can handle paying your bills, selling real estate if necessary and handling the other financial affairs that may come up.

Third, make sure that you protect your children as much as possible by naming a guardian who can take care of them and manage any money or property that you are leaving to them. A qualified estate planning attorney can help you with this.

Another important component of planning your financial affairs is covering any funeral expenses up front. You can set up a specific kind of trust that will allow you to deposit funds so that your affairs are taken care of without burdening your family or loved ones.

Finally, make sure that you store all of your documents in a place where your executor can find it. This includes things like your will, trust documents, stock certificates, real estate deeds, bank account information and life insurance information.

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

Before setting up a living trust as part of your estate planning process, you need to think through some of the things that should be included. First, you need to figure out whether you want an individual or shared trust. If you are in a domestic partnership or you are married, then look to see if most of your property is jointly owned. If so, a shared trust might be the best way to go.

Next you want to decide who will inherit your property under the trust. This is typically family members, charities or friends. Make sure to make alternate plans and beneficiaries too. You also want to decide which items you will leave in the trust such as your more expensive possessions that you don’t want to have to go through the probate process.

You will need to choose a person who will become your successor trustee that will be able to distribute all the property to your beneficiaries after you have passed away. You should speak with that person to make sure that they are able to take on that responsibility, however. If your children are inheriting any property and are still under age, you may need to also choose someone who can manage the property until they are of legal age.

An estate planning attorney can make sure that all of the legalities required to have a valid trust are met. For instance, you need to understand whether the trust requires to be signed in front of a notary. There are also small legal procedures that need to take place to make sure that your trust will be valid. Once you have a trust document, make sure that you store it in a safe place and let your loved ones know where to find it.

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

Most parents want to leave all of their assets to any remaining children that they have. This is especially true if the children are young and will need to be financially cared for throughout their lives. However, as children get older and become adults themselves, it might leave some parents wondering whether they are required to equally split up their assets among their kids. The answer to that is a resounding no.

There may be many reasons why a parent has chosen not to leave money to one of their children. For instance, if the parent has cared for the child financially even through adulthood or has helped them out with college funding, they may decide that that child’s inheritance was taken up while they were still living. The long and short of it is that a person has the right to choose who they will leave their assets to and how much. It doesn’t have to be equally split up between the children for any reason.

However, it’s very important that your will specifically states what you are leaving to whom. If you want to leave nothing to one of your children, you must specifically state that so that he or she cannot claim accidental disinheritance. By being very specific in your will, you will avoid any unnecessary court challenges that could come about after your death.

If you are still close with the child in question, it makes sense to be very frank with them by letting them know why you are choosing to eliminate them from your will. The last thing you want to do is to create heartache and grief by not letting your family member know the reasoning behind your choice. However, if you have had a strained relationship with this person in life, then it likely won’t be a surprise that you are not leaving them anything in your will.

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

A Living Trust is an estate-planning tool that can help keep many of your assets out of probate. When you fund your assets to your trust, they can be passed to the trust beneficiaries without the need of going through the probate system first. The reason that assets in your trust can pass to your heirs without going through probate is that they don’t belong to you, but to the trust you created.

Fortunately, there are some assets that do not need to be funded to your trust due to the fact that they are not normally subject to probate. Some of the assets that will not need to be funded to your trust include,

Personal Belongings – There is no title to personal belongings so funding them to your trust is not necessary. In most cases families will divide personal belongings according to the deceased’s will, or as the family has agreed.

Retirement Accounts – Retirement accounts already have a named beneficiary and those accounts will pass directly to that person when the account holder passes away.

Life Insurance – Like retirement accounts, with life insurance policies there is already a beneficiary named. The policy will likely be paid to that beneficiary long before the probate process is complete.

Checking and Savings Accounts – When you open a checking or savings account, you can make that account a payable at death account. What this means is that the money in these accounts will go directly to the beneficiary that you named on the account at your death. There is no need for the money to go through probate.

Although you can make your trust the beneficiary of these types of assets, it is not usually necessary, unless you wish to protect those assets for your heirs. If you want to protect those assets for your heirs, you might then consider making your trust the beneficiary for your insurance policies and other financial accounts.

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

The revocable living trust is a flexible and useful estate planning tool with many benefits to offer; however, it has its limits. For instance, did you know that – contrary to a popular myth – simply establishing a revocable living trust does not protect you and your assets from creditors, or from a divorcing spouse?

Trust Property is Treated Like It’s Yours

Since the trust is revocable, meaning that you retain the power to change or eliminate the trust in its entirety at any time, the assets held in the trust are treated as if they belong to you. If you lose a lawsuit and are hit with a money judgment, the plaintiff entitled to collect on that judgment will have every right to take your trust assets in satisfaction of the judgment. The same is true when it comes to divorce. All things being equal, simply placing property in a revocable living trust during your marriage doesn’t mean the divorce court won’t view that property as subject to division between you and your spouse.

Other Solutions Exist

The fact that a revocable living trust doesn’t protect your property from your creditors doesn’t mean you can’t make sure your assets are protected. In fact, your estate planning attorney has an arsenal full of asset protection tools and methods. For instance, money and other property that’s vulnerable to creditors can be used to purchase life insurance or contribute to a qualified retirement plan, you may be able to establish a family limited partnership or limited liability company, or the assets in question can be funded into an irrevocable living trust.

When it comes to protecting your assets, timing is everything. Wait too late to get started, and even the best asset protection tools won’t be able to help you. Once a lawsuit is looming, it’s usually too late to effectively rearrange your property.

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

We’re living in tough financial times. Small businesses are failing at an alarming rate, bankruptcy filings and foreclosures are reaching record levels. People who never thought they’d have to worry about protecting their property from creditors, or from lawsuits, are facing that very reality.

A Revocable Living Trust Won’t Work

So, can you use a Revocable Living Trust to protect your property from creditors? Unfortunately, no – because you retain control over the property in a Revocable Living Trust, it won’t protect your property from creditors.

Once a creditor wins a lawsuit against you, they can find and collect your assets in payment for the money you owe them. And, if they discover property you’ve transferred into a Revocable Living Trust, then they can access that property just as if it were titled in your name.

This doesn’t mean that you shouldn’t have a Revocable Living Trust; they’re useful for avoiding probate, for protecting your family’s privacy, and for assisting with incapacity planning. And, with the addition of AB Trust provisions, your Revocable Living Trust can be used for estate tax planning and protecting your spouse’s assets after you pass away. But, for dealing with creditors during your lifetime, you’ll need to engage in some additional asset protection planning.

There May Be Other Options

So, if you’re concerned about creditors, you should talk to an attorney. There are likely other steps you can take to preserve your property.

The key is to take the appropriate action to protect your assets before there’s a lawsuit on the horizon. An experienced attorney can evaluate your situation and let you know what strategies would work best for you and your family.

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