Life can turn on a dime without any warning, and things can rapidly change without you even realizing it is happening. One day you could be just fine and loving life, and the next day you could be lying in a hospital bed clinging to life. Yes, it can happen that fast – even faster in some situations! What do you do, though? While you can’t prevent things from happening because it is, after all, unexpected – you can put some plans into place.

Incapacity planning, believe it or not, is an integral part of the estate planning process. Yes, you are going to work on creating a will and you are going to work on creating a trust (or several trusts, depending on your situation). Wills and trusts are just part of the entire picture which is called your estate plan, though. You have to think about everything, including what might happen or what you don’t expect to happen. That’s where the incapacity planning process starts.

Do you want other people making your decisions for you? Of course you don’t, which is why you want to create a durable power of attorney or a medical power of attorney. Speak with your estate planning attorney to determine which one is the best fit for your estate plan, or if both of them might be necessary. With these tools in place, you are certain your wishes are met medically and personally. Without these tools in place, your wishes are likely not going to be 100% met. That isn’t a comfortable situation for anyone, particularly family members who have to stand by and watch – or go to court in attempts to gain guardianship over you while you are incapacitated.

What’s next? In addition to these documents, you must ensure funds are available should long term care or nursing home expenses become part of the equation. You already know medical expenses are on the horizon, and that too should be part of your incapacity planning. Your estate planning attorney may advise that you create a trust to place these funds into, in addition to seeing if you qualify for Medicaid or Medicare benefits. Because you are trying to plan for every eventuality, you must not overlook the financial aspect of the entire situation.

Work with your estate planning lawyer consistently in order to keep your documents current and up to date as life situations change. You may wish to make changes or additions to your incapacity plan which will, in turn, change your estate plan.

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

Are you aware of estate litigation traps? Chances are, like most people, you do not. Because people whom are not involved with law practices may fall into these traps, it is important to work with an estate planning lawyer experienced with estate litigation. The more experienced your estate planning lawyer is with the process of estate litigation, the least likely your estate is to fall upon these issues.

There are many facets to the estate planning process ranging from complex to simple:

• Creating a will
• Creating a trust (or several trusts)
• Establishing a durable power of attorney
• Establishing a medical power of attorney
• Planning for long term care or nursing home expenses

These are just some of the areas of the estate planning process your estate planning lawyer will go over with you, in addition to addressing any questions and concerns you may have. In addition to creating these documents according to your plan, your estate planning lawyer will help you reduce or avoid estate taxes and help reduce your beneficiary’s inheritance taxes. With all this under consideration, your estate planning lawyer’s priority should also be establishing ways to avoid estate litigation.

Like probate, estate litigation is a costly process sometimes taking years to resolve. Until the process is complete, beneficiaries of your estate have no access to any assets or properties within your estate. During the selection process, choose an estate planning lawyer who has spent time in court on a regular bases working with estate litigation cases. If you fail to research this aspect, you may inadvertently choose an attorney who is not experienced enough to help avoid the litigation process. The techniques they are parsed in will save an enormous amount of money.

Once you have chosen and began working with your estate planning attorney, keep conferring with them regularly. Inquire frequently about ways to avoid probate, how to reduce estate taxes and if you need additional tools like asset protection planning. There is no such thing as asking too many questions with regard to how your assets and properties are handled following your passing.

Be sure to update all of your documents on a regular basis to include changing or adding beneficiaries, adding or changing assets or properties, and adding or changing your health care directive. Because life changes so frequently, these documents that reflect your life are going to change just as often.

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

Robert Porter of Kerville, Texas was trapped in his car for three days recently. The 85-year-old World War II veteran did not think he would survive, so he decided to write his Last Will and Testament — on his car console. Fortunately, Porter was rescued and his car-console Will was never executed.

Handwritten or “holographic” Wills are legal, in Texas and other states, even if they are not witnessed. Such Wills must be entirely in the testator’s handwriting and signed by him or her. Porter’s situation was not even unique — in 1948 a Canadian court admitted a Will written on the fender of a tractor that had trapped and killed a farmer.

However, holographic Wills are not reliable estate planning tools. If any provision of such a Will is ambiguous, unclear or even illegible, a court may have to construe the meaning, adding to the time and expense of administering an estate.

Before you find yourself in an emergency situation, it is important to create a Will with the help of an experienced estate planning attorney. A traditional Will prepared by your attorney and properly witnessed may not grab any future headlines — but they will ensure your estate is properly distributed in accordance with your wishes.

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

A Texas appeals court recently waded into a sibling rivalry between a brother and sister who were named co-executors of their mother’s estate. The brother convinced a trial court to disqualify the sister as “unsuitable” under state probate law. But the court of appeals reversed, noting, “We have found no authority suggesting that family discord alone is enough to determine that a person appointed in a will to serve as executor is unsuitable.”

Yet family discord is why it was probably inadvisable for the mother in this case to name both children as co-executors. While you always have the right to ask more than one person to serve as executor, doing so can lead to serious disagreements and ultimately litigation. This costs your estate time and money.

If you appoint co-executors, each has equal and joint responsibility for administering your estate. Both co-executors may also be liable for damages if they mismanage estate assets — for example, allowing a house owned by the estate to fall into foreclosure. And if one co-executor is not fulfilling his or her duties, the other may have to take legal action to remove them.

Whether you name one or two executors, you must consult with a competent estate planning attorney who can advise you on the best way to setup your Will. Your attorney can help you identify the best person or persons to serve as your executor and draft a Will that can minimize potential conflicts or the likelihood of future litigation.

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

Charitable bequests are a common part of estate planning. But before you decide to leave money to an organization either be a bequest in your Will or a Charitable Remainder Trust, it’s important to do your homework and make sure your favorite “charity” is really a legal charity.

The Internal Revenue Service recognizes public charities and private foundations. Your estate can deduct the value of contributions to either type of organization on any federal or state estate tax return that is due. To ensure your charities are eligible organizations, you should check with the IRS, which maintains and regularly updates its list of exempt organizations. The IRS website has a searchable database. Make sure you know the IRS-assigned tax identification number for any organization you wish to give to, as well as the name of any affiliated group the organization reports to (tax exemptions are often issued in the name of a parent or umbrella group).

Working with a qualified estate planning attorney, you should also get in touch with the organizations that you intend to make bequests to. Many charities and foundations have an assigned planned giving officer who can provide specific information on how and where any gifts should be made. If your bequest is part of your Will, this person can serve as a contact point for your executor.

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

Probably the second-best estate planning advice you’ll ever receive is to make sure you keep your plan updated to reflect changes in your family, your finances, and the law. (The best advice, of course, is simply to make an effective estate plan in the first place.)

But, this brings to mind the question, once you’ve updated your estate plan by making a new Will, what do you do with your old one? The answer is to destroy it. The easiest way to do this is simply run it through the shredder.

Why? Technically, of course, your new Will replaces any old Wills – and it should say so on its face. But, there’s always the chance that, if you have one or more old Wills floating around, they can cause problems that might delay the administration of your estate when you pass away.

Your safest bet is to make sure that there’s only one version of your Will in existence at any given time, and that should be the version that reflects your most current wishes and intentions.

Along with this advice comes a word of caution: never, ever destroy an “old” Will until there’s a fully-signed new one in existence to replace it. Destroying an old Will before executing a new one leaves you with no Will, and this is a situation you don’t want to be in.

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

How do you know if someone is of sound mind when he or she makes a Will? And, if you don’t think that a loved one was of sound mind when his or her Will was made, can you challenge the Will?

The legal term for being of sound mind is “testamentary capacity”, and there are a number of elements that go into having testamentary capacity. A person can challenge a Will on the basis of lack of testamentary capacity. In order to do this, he or she has to prove that one of these elements was missing at the time the Will was signed.

Generally, a person making a will (called a Testator) has testamentary capacity if he or she understands:

1. That he or she is, in fact, making a Will;
2. The consequences of making a Will;
3. What property he or she owns, including a general understanding of the amount of property, and its value.
4. Who are the “natural objects of the Testator’s bounty”. This usually means the Testator’s next of kin.

Just because a Testator is elderly or ill, doesn’t mean he or she lacks testamentary capacity. Without strong evidence, like a doctor’s testimony that the Testator lacked capacity, it’s hard to prove in court that a Will should be invalidated on this basis.

What if you’re concerned that your loved ones will challenge your Will, claiming that you lacked testamentary capacity? There are steps you can take when making your Will to prevent this kind of challenge, such as having a doctor certify in writing that you have the mental capacity to make your Will. It’s important to let your estate planning attorney know your concerns, so that he or she can help find the right solutions for you.

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

One of the ways that a will can be successfully challenged is to prove that the person making the will (the “testator”) was under “undue influence” at the time the will was made. This essentially means proving that someone injected himself or herself into the testator’s life, and had so much power over the testator, that the testator’s will reflects not the desires of the testator, but the desires of the person controlling him or her.

In order to win on a claim of undue influence, the person challenging a will has to show four different things:

1. That the testator was vulnerable to overreaching. For example, that the person making the will was mentally or physically disabled, and that because of this, he or she was unusually likely to be taken advantage of.
2. That the accused had an opportunity to exercise undue influence. Usually, this is done by showing that the person accused of taking advantage of the testator had an especially close relationship with him or her.
3. That the accused showed an inclination to actually exercise undue influence. It’s not enough to just show that the accused was in a close relationship with the testator. There have to be some actions on the part of the accused that indicate he or she intended to take advantage of the testator. Examples of this behavior can include isolating the testator, keeping others from visiting; demanding that the testator use a particular attorney to make a new will; and insisting on being involved in the process of making the will.
4. That the making of the will was a “suspicious transaction”. There has to be something in the will that’s out of the ordinary, and that the testator never would have initiated on his or her own. For example, cutting children out of the will in favor of a new caregiver with whom the testator has become close might qualify as a suspicious transaction.

It’s not enough to simply disagree with the will, or even to prove only a couple of these things – all four elements have to be proven before a court will declare a will (or a provision in a will) invalid.

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

Estate planning is one of those things that we know we need to do, but so many of us put off until it’s too late. Here are a few simple estate planning “do’s” to get you on the right track.

1. Make a Plan: Depending on which statistic you look at, over half of all Americans die without a simple will. And without a plan, it’s state law that decides who gets your property. It could be a judge whom you’ve never met that decides who’ll be raising your children. And without a plan, the process of deciding how your property is divided is likely to be time consuming, expensive, and full of added stress and anxiety for your already grief-stricken family.
2. Plan Early: Even if you’re young, the time to make an estate plan is now. And not just because of the obvious fact that none of us can predict when we’ll die. It’s also essential to make an estate plan while you’re of sound mind – once you lose mental capacity, you lose the ability to make an estate plan, or a disability plan, for that matter.
3. Let Your Fiduciaries Know: Once you’ve made an estate plan, let your fiduciaries know you’ve nominated them to serve as fiduciaries. Your executor, trustee, and the guardian of your children have been appointed to some pretty important positions, and they deserve some advance notice. What if they don’t want the job? You deserve some warning, too. If you know ahead of time, you can choose someone else, and save your family some major panic down the road.
4. Fund Your Revocable Living Trust: Once your Revocable Living Trust is signed, your job is not done. A trust is worthless unless it’s funded, so be sure to get your estate planning attorney’s guidance as to what property to transfer into your trust – and then make the appropriate transfers. Only the property that’s been transferred into the trust will avoid the probate property.
5. Keep your plan updated. As the years go by, everyone’s life changes. And your estate plan needs to be updated to keep pace with the changes. As babies are born, people are married and divorced, and loved ones pass away, you need to work with your estate planning attorney to make sure that your plan does not become obsolete. And you need to check in with your attorney to make sure that your plan gets updated to reflect changes in the law.

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

Many married couples have “I Love You” wills. These are simple wills that mirror each other and leave all your assets to the surviving spouse. While there’s nothing inherently wrong with this type of will, unless you’re in a very limited financial situation, “I Love You” wills may not be the best option for your family. Here are some of the things that this type of will just can’t do:

• Tax Planning. If your estate is large enough to be taxable – and starting in 2011, this just might include folks with a net worth of over $1 million – then “I Love You” wills do nothing to help minimize the amount of estate taxes you’ll pay. In order to reduce your estate tax bill, you’ll need to use advanced estate planning tools, such as an AB trust.
• Asset Protection. The state of the economy is causing many people to become more concerned about protecting their property from potential lawsuits and creditors. A will does not offer you any protection against these threats to your property. However, asset protection planning with an irrevocable trust can help you shield your property, if it’s done in a timely manner.
• Protection for the Surviving Spouse and Children. What happens when one spouse passes away and the surviving spouse remarries? Often, the assets from the first marriage go unprotected. If the surviving spouse divorces, those assets can become vulnerable in the divorce settlement process. If the surviving spouse passes away without effective further estate planning, the children of the first marriage can lose their inheritance. Estate Planning using an appropriate trust can help protect assets in the event of a divorce, and can help ensure that precious property stays in the family.

If you and your spouse have “I Love You” wills, you’d be wise to schedule a consultation with an estate planning attorney. He or she can review you financial situation and let you know whether there are estate planning options that might better serve your needs.

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