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.

If you read the last two posts in this series, you now know that oral or nuncupative wills may be effective to transfer your testamentary property only in limited circumstances. If a Texas probate court denies your oral will into probate, you are subject to the state’s intestacy laws created for those who die without valid wills. If you die without a written will in Texas, you may be unintentionally diminishing the assets within your estate and delaying the probate process. Call our office to help you avoid unnecessary costs and delays during probate. In delaying the probate process, your beneficiaries might not be able to benefit from their inheritances as quickly as you would have liked.

The state’s intestacy statutes provide some of your descendants with preferential rights. The legal application of the state’s intestacy laws is that some of your assets may pass to unintended recipients. If you did not want your grandson who snubbed you by not inviting you to his wedding to inherit a sizable portion of your estate, better write that in your will; otherwise, he may be able to inherit your entire estate if you do not leave a surviving spouse, children or any other grandchildren. If you are a widower who would like to make special provisions for a special niece that treated you kindly and looked after you while you were ill, better put that in writing. Otherwise, your niece may not receive anything if you leave surviving children.

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

When you create a nuncupative or oral will in Texas, you can only do so if you are very ill and devising personal property. Real property bequests by oral will are not valid. Furthermore, you must make your oral or nuncupative before at least three witnesses if you devise more than $30 of personal property. Your witnesses (or witness if devising less than $30) must probate your oral will within six months of your death. After six months, an oral will is invalid and ineligible for probate.

Since using oral or nuncupative wills is strictly limited, creating a legally valid will may be the single most important thing you can do while you are alive. As discussed in our last post, a nuncupative or oral will is only legally valid if you are very ill and if probated within six months of your death by your witnesses. If the witnesses to your oral will are not credible, your will may be found to be invalid. A nuncupative will that does not comply with the Texas Probate Code is invalid, and your estate is subject to the state’s intestacy provisions. The intestacy statutes in Texas establish an order of priority for your descendants and heirs based on blood and kinship. In other words, your most closely related lineal descendants have priority in receiving inheritances from your estate than those less closely related.

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

An oral will is a nuncupative will. In many states, nuncupative wills are invalid or strictly construed. Typically, in states that acknowledge oral or nuncupative wills, testators must create them as their final acts before death. Commonly known as a dying deathbed exception to the typical requirement that a will is valid only if in writing, oral wills may be valid in Texas. Texas law limits the use of nuncupative wills to those who are dying on their deathbeds or at war. In Texas, a nuncupative will is an exception to the written requirement only in limited circumstances.

Texas law allows you to create a nuncupative or oral will in limited situations. You can create an oral will if you are terminally ill and at home. If you are not at home, you may be able to create an oral will if you are on your deathbed. You can orally devise property to others with only one witness if the total value of your bequests does not exceed $30. If you devise more than $30 in personal property, you must make your oral will in the presence of at least three credible witnesses.

Because Texas law strictly limits the validity of oral or nuncupative wills, creating a written will with the assistance of a Texas probate attorney is the best method to devise your property. Scheduling an appointment with our office is the first step in creating a valid will.

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

A validly created will is one without evidence of mental duress, incapacity or fraud. This means that in addition to being mentally competent to draft your will, you must not have been coerced or pressured into making it. If someone threatened physical violence or blackmailed you into creating certain provisions within your will, your will is invalid under the duress prohibition.

Texas law requires probate of your will within four years of your death. Unless you comply with the requirements of creating a self-proven will, your will requires that at least one of your two witnesses authenticate your will and testify that at the time you created your will, you were under no duress, there was no fraud, and you were mentally competent to create one. If you created a handwritten or holographic will, a probate court will require the testimony of both of your attesting witnesses to authenticate your will. A self-proven will is one that contains specific language using the statutory form affidavit. You must have a notary public witness and attest to the validity of your signature and the signature of your witnesses. A will does not comply with the statutory requirements for a self-proven will if your witnesses do not sign your will, and you have only a notary’s attestation. If you provide a self-proven will, your witnesses do not have to authenticate your will for it to be admitted into probate. Instead, your signature, the witnesses’ signatures and the notary’s attestation clause provides self-authentication.

A will that is not authenticated or self-proven will not be admitted into probate. In this case, your estate is subject to the state’s intestacy laws as if you never created a will.

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

As recommended by the Texas Bar Association, although you may be able to draft your own will, an experienced lawyer should help you draft it, since your will controls the disposition of your assets when you die. Furthermore, a probate attorney can help you comply with the testamentary requirements to draft a legally binding will and can help your estate from expending money on probate issues you could have avoided with proper legal advice.

If a probate court determines that your will is invalid, your estate is subject to the Texas intestacy laws. Intestacy laws govern property distribution for residents who die without valid wills or without creating them. The Texas Probate Code establishes a lineal order of priority giving your closest surviving descendants and your surviving spouse rights to inherit your property before other blood relatives. In most cases, the Texas intestacy laws do not give non-blood relatives rights to receive property from your estate absent clear and convincing evidence otherwise. Typically, a written will is the only legal method that non-blood relatives can prove that you intended to leave your property to them.

In your will, you can name an executor to serve as the individual who will be responsible for making sure that your probate property passes to your beneficiaries. An executor is also responsible for making sure that your creditors are paid for their debts if you legally owed them. Typically, secured creditors receive payment first, and then, unsecured creditors or those without a right to collateral, receive payments. If you do not name an executor or you die without creating a will, a Texas probate court will appoint one on your behalf. Your close relatives have rights to serve as your administrators or personal representatives, but other heirs and the Texas probate court can reject their appointments.

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

State laws govern the legal requirements necessary for drafting valid wills. In Texas, residents can draft three types of wills, and each type has its own set of legal requirements. Generally, as a Texan, you can create an oral will, a typewritten will or a holographic or handwritten will. Although each type is different, you must meet the general legal requirements to create a valid will pursuant to the Texas Probate Code.

To create a will in Texas, you must be at least 18 years old or be legally emancipated by court order, marriage or service in the military. Furthermore, you must be legally competent and of sound mind when you create your will. This means that you are capable of mentally drafting a will and bequeathing your assets to your beneficiaries.

Most Texans create typewritten and formal wills with the assistance of probate attorneys licensed to practice law in Texas. If you create a typewritten will, you need to have two witnesses sign your will in front of you, and you must sign your will in front of your witnesses. Your witnesses must be at least 14 years old and competent or legally able to serve as your witnesses. Generally, Texas law prohibits you from selecting a beneficiary to serve as your witness because your beneficiary is a partial witness. You should select two witnesses who are impartial and will not receive any property under your will. Note that in many other states, witnesses must also be 18 years old to serve in this important function.

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

Choosing your estate’s executor is one of the most important decisions you make during the estate planning process, since this will be the person who will administer your estate when you die.  The executor becomes the actual manager of your property during probate, which is the legal process that settles your estate – but at what point will they distribute your property to those you named in your will?

During the period of estate administration, the property belongs to the executor and is managed by them, as they are responsible for gathering and safeguarding your assets.  The executor is also tasked with valuing the property of the deceased, which will normally require appraisals. They then determine if the estate is solvent, meaning there are more assets than liabilities or insolvent, meaning there is more debt than assets.  If the estate is solvent, the executor must pay the debt, funeral expenses, and taxes. Anyone who has a claim against the estate has a specific time frame to notify the estate, which varies from state to state, from the date of the publication of the estate notice in the newspaper to come forward.

It is only during that time that the executor could receive bills or claims against the estate’s assets. The decedent’s final federal and state income tax returns must be filed by the executor, as well. If there is property that avoided probate, such as life insurance, pension benefits, or joint property, the executor must also value these assets and report them to the tax authorities.  As you can see, the more organized and documented your estate is, the easier it will be for your executor.

It is only after all of these executor’s duties are completed that they then make the bequests that were documented in your will.  Since this process takes from 6-12 months, the beneficiaries should realize that they will not receive their inheritance immediately, and the bills are paid first.

Estate planning allows you to plan for the legalities of your estate, and if getting an inheritance to your children quickly is a priority, an estate planning attorney can recommend ways that allow property to avoid probate to get the inheritance in their hands and out of your executor’s.

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

Probate estates cost more than non-probate estates because they drive probate attorneys (i.e. estate planning attorneys) bonkers.  They’re a pain with many more legal hoops to jump through than settling an estate wherein probate is not required (such as in the case of a fully funded revocable living trust.)

First, probate rules are different for each county.  There are 24 counties in Maryland, including Baltimore City; therefore, there are 24 different sets of probate rules.  There is a lot to keep track of; and, often, the procedures can only be learned by trial and error.

Second, probate requires original signatures, which excludes faxes and emails.  Although, electronic filing sometimes avoids the original signature requirement, it is not available in all counties; and, even if it is, sometimes original documents such as the will (with original signature) must still be mailed in.

Third, some probate courts require bonds; whereas, others do not.  This means that sometimes the personal representative (i.e. executor) must pay a fee to guarantee that he or she will not steal from the estate and other times, not.  Often, the bond issue is determined by whether the personal representative lives in that state of Maryland, or not.

Fourth, all probate estates are under the jurisdiction of probate courts so the personal representative and the probate attorney must make court appearances, report to the court, and do whatever the court orders.  Like all of these factors, this costs time and money.

Fifth, probate estates are often more disorganized than non-probate estates.  For example, if a revocable living trust is fully funded, then that decedent likely got good legal advice.  There is likely a list of assets and other important papers stored with the estate planning documents.  This avoids the time consuming digging through piles of papers to figure out what the decedent owned by the personal representative and legal staff.

If you want to avoid probate and save legal and personal representative fees, consult with a qualified estate planning attorney.

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

Many estate planning tools are set up to allow property to avoid probate.  Why?  Probate Court can not only tie up property for months, even years, but it can rack up fees and costs as well.  Property that avoids probate is called non-probate property, and it generally falls into three different categories:

• Transfers by Title: Assets transferred by title include property owned in joint tenancy with the right of survivorship, such as a house that is jointly owned by a married couple.  It is important to know the form of ownership for property, particularly when it comes to estate planning, as property jointly owned as a tenancy-in-common has no rights of survivorship and is considered probate property.
• Transfers by Contract: Assets transferred by contract include life insurance policies, 401K and retirement plans, and any other asset that has the owner declare a beneficiary to receive it upon the owner’s death.
• Transfers by Trust: If the deceased has created a trust, the trust will generally contain provisions regarding transfer of the property at the time of death.

Title to these non-probate assets passes automatically at death without any Probate Court proceeding. While ownership transfers automatically, certain steps may be required to have the property released or retitled to the new owner. A certified copy of the death certificate is usually required and additional documentation may be necessary.

If a person has arranged for a non-probate transfer of ownership through title, contract, or trust, this certainly does not mean that a will is not needed. Not only will it still be needed to distribute probate assets, but a will is necessary to name a guardian for minor children as well as an executor to administer the estate.

An estate planning attorney can best advise you on the estate planning strategies that allow property to avoid probate, while creating an estate plan to meet your family’s needs and goals.

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