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.

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.

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.

Estate Planning:  http://www.domain.com/estate_planning/estate-planning/
According to the Texas homestead law and the Texas Probate Code, a surviving spouse has the right to live in exempt homestead property if she so chooses. If your surviving spouse decides to claim her homestead exemption and live in her homestead during her lifetime, your homestead estate cannot pass to your surviving heirs. Texas’ generous homestead laws also provide homestead exemptions to surviving spouses for personal homestead property. This means that if you created a will and left your personal and real property subject to the Texas homestead exemption to other heirs, your bequests may be invalid.

The Texas homestead laws classify homestead property as an “urban homestead” or “rural homestead.” Urban homestead property includes up to 10 acres of real property and improvements on the property. A rural homestead includes up to 200 acres of rural land and improvements.

Although most cannot, some creditors may be able to seek a forced sale of your homestead property to satisfy their debts or unpaid property taxes. However, other heirs or putative beneficiaries cannot force surviving spouses to sell their homestead property in their favor. The one exception to the homestead property exemption is if a surviving spouse abandons his claim by living elsewhere. Proving that a surviving spouse abandoned her claim is difficult, however.

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.

If you’re considering what happens to your property after you die, it’s important to know that unless you take adequate steps now, your property may pass to those whom you do not wish to receive it. In some instances, the failure to create a last will and testament or other estate planning device can even lead to the state government inheriting your property.

If you create a will, you get to determine who receives your property. You can choose anyone you wish, and are under no obligations to leave any property to anyone else. Your spouse is entitled to a specific portion of your property, but you do not have to leave any property to your children.

When a person dies without leaving behind a last will and testament, this is known as dying intestate. A person who dies without a will have no way of telling others who should receive her property. When this happens, each state has its own set of laws that pre-determined who receives such intestate property, known as laws of intestate succession. These laws differ considerably, but essentially state that certain relatives are entitled to inherit your property if you die intestate. For example, some states determine that any surviving spouse you have will automatically inherit all of your property, while others determine that the spouse will split the estate with your surviving children.

While a last will and testament is important, it only governs the property you own, known as your estate. If you transfer all of your property to another entity while you are alive, such as to a trust, then there is no property for your will to distribute. However, if you failed to properly transfer any of your property to a living trust, that property would be subject to intestate succession if you also fail to create a valid last will and testament.

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