Gratia P. Schoemakers, Esq.

Stress Test Your Estate Plan

November 27, 2023 By Gratia P. Schoemakers, Esq.

So, you have done the hard work of establishing an estate plan. Good for you! However, you still have serious work to do to ensure that the strategy you have selected will maximize your peace of mind and protect your legacy.

Estate plans should be like living, breathing creations that reflect the changes in your life. Your life can and will change due to new births, children getting older, and other shifts in the family; changes to your investment portfolio, career, and business; and changes to your health, where you live, and your core values. Likewise, external events, such as new tax legislation passed in your state or the development of a novel financial instrument, can throw your plan off track or open the door to new opportunities.

Obviously, you should do due diligence without spending inordinate amounts of time noodling over your plan. To that end, ask yourself the following “stress test” questions to assess whether you need to meet with an estate planning attorney to update your approach:

1. When was the last time you updated your will or living trust? Since then, have you had new children or gotten divorced? Have you moved to a new state, opened, or sold a business, or just changed your mind about the type of legacy you want to leave behind? Especially if big, tangible life events have occurred, strongly consider updating your documents as soon as possible. Also keep in mind that there may have been changes in the law since your last update that could significantly affect the viability of your plan.

2. Who have you named as executor and trustee? If you had to start your planning over from scratch today, would you still name the same people? If not, why not? Did you choose the best person for the job or was your choice based on less relevant factors? Is the person you chose still available to serve in that role?

3. Do you have adequate insurance? Many people do not have enough insurance for themselves or their businesses. They also fail to name contingent beneficiaries. Get your insurance policies in order, and make sure your designations match your estate plan.

4. How much of your property is jointly owned with someone other than your spouse? Jointly owned property has the potential to be double taxed. Take a look at your real property and seek advice on the proper adjustments to make in order to save on taxes when it’s really necessary to save on taxes.

5. How’s your record keeping? Nothing drives an executor crazy like sloppy record keeping.

6. When was the last time you gave your plan a thorough once-over? Even if nothing “huge” has happened in your life recently, if it’s been over five years since a qualified estate planning attorney has assessed your strategy, schedule a time to meet. Identify any issues, and iron out the kinks one at a time. After going through the “stress test,” if you have any questions, please feel free to give us a call. Estate planning is an ongoing process, and we want to make sure your wishes withstand the test of time.

Three Tips for Talking About Your Estate Plan During the Holidays

November 20, 2023 By Gratia P. Schoemakers, Esq.

The holidays are right around the corner, bringing the joyous season of gathering with family and loved ones into full swing. It is the time to slow down, get caught up with loved ones, and enjoy the family and experience quality time around the dinner table. It is also a great idea to take this opportunity to review your estate plan and talk about the topic with your loved ones.

Do Not Be Indifferent

While the entire topic of estate planning can be a touchy subject, covering your eyes about the issue is not good for you or your family. As many as six in 10 Americans do not have an estate planning document put together – like a will or a trust. This is particularly alarming when it is estimated that $30 trillion in wealth is set to transfer between baby boomers and their heirs in the next few years. Accordingly, it is vital that families discuss estate planning well in advance of an emergency or life tragedy – while the eldest members of the family are still physically and mentally healthy. Leaving the topic to chance can result in disastrous or costly outcomes.

Time it Right

Not surprisingly, estate planning is a topic that does not come up in everyday conversation. And randomly informing your loved ones who will get your things when you die or if you become incapacitated will likely damper the holiday spirit.

There are ways, however, to discuss estate planning during this season with grace and tact. Instead, choose or make a time when you and your loved ones can be together and talk within a comfortable, calm, and private environment. Make sure that everyone is relaxed, and distractions are at a minimum, so the conversation stays on track.

In an ideal situation, the parents – or the elders – will bring up the subject. Sometimes, however, they refuse to discuss estate planning. In such a case, children have to broach the subject. Asking where important papers and records are kept is a great start.

Boundaries Are Important

Once you find the time, place, and opportunity for the conversation about estate planning to happen make sure to set down some ground rules. Keep the discussion as transparent as possible, perhaps by having each family member address their thoughts, questions, or wishes and discuss together. Some items that may be on the list to discuss may include:

Notifying them that you have a will or living trust that spells out how assets will be divided when you die or become incapacitated;
Letting them know who will act as the executor of your will or trustee of your trust;
Discussing who will serve as your agent under your financial power-of-attorney and patient advocate under your healthcare power-of-attorney; and
Explaining to your family how to handle any medical or long-term care situations, if necessary.

Bottom Line

While discussing estate planning needs can be straightforward and simple, the conversation can quickly become complicated when personalities clash or emotions get in the way. The main goal is to let your family and loved ones know you have a plan, without needing to go into detail about the plan’s contents. We can help parents and children come together and create an appropriate plan that will meet your family’s short- and long-term estate planning needs.

To schedule a consultation or for more information call (832) 408-0505. Our office is located at 1100 E. NASA Pkwy #420j, Houston, TX 77058.

Want To Give The Kids An Early Inheritance? 4 Things To Consider

November 13, 2023 By Gratia P. Schoemakers, Esq.

If you’re thinking about giving your children their inheritance early, you’re not alone. Nearly two-thirds of people over the age of 50 would rather pass their assets to the children early than make them wait until the will is read. It can be especially satisfying to fund our children’s dreams while we’re alive to enjoy them, and there’s no real financial penalty for doing so, provided that you structure the arrangement correctly. Here are four important factors to take into account when planning to give an early inheritance.

1. Keep the tax codes in mind.

The IRS doesn’t really care whether you give away your money now or later—the lifetime estate tax exemption as of 2023 is $ 12.92 million per individual, regardless of when the funds are transferred. So, whether you give up to $ 12.92 million away now or wait until you die with that amount, your estate will not owe any federal estate tax (although, remember, the law is always subject to change). You can even give up to $17,000 per person (child, grandchild, or anyone else) per year without any gift tax issues at all. You might hear these $17,000 gifts referred to as “annual exclusion” gifts. There are also ways to make tax-free gifts for educational expenses or medical care, but special rules apply to these gifts. Your estate planner can help you successfully navigate the maze of tax issues to ensure you and your children receive the greatest benefit from your giving.

2. Gifts that keep on giving.

One way to make your children’s inheritance go even farther is to give it as an appreciable asset. For example, helping one of your children buy a home could increase the value of your gift considerably as the home appreciates in value. Likewise, if you have stock in a company that is likely to prosper, gifting some of the stock to your children could result in greater wealth for them in the future.

3. One size does not fit all.

Don’t feel pressured to follow the exact same path for all your children in the name of equal treatment. One of your children might actually prefer to wait to receive her inheritance, for example, while another might need the money now to start a business. Give yourself the latitude to do what is best for each child individually; just be willing to communicate your reasoning to the family to reduce the possibility of misunderstanding or resentment.

4. Don’t touch your own retirement.

If the immediate need is great for one or more of your children, resist the urge to tap into your retirement accounts to help them out. Make sure your own future is secure before investing in theirs. It may sound selfish in the short term, but it’s better than possibly having to lean on your kids for financial help later when your retirement is depleted.

Giving your kids an early inheritance is not only feasible, but it also can be highly fulfilling and rewarding for all involved. That said, it’s best to involve a trusted financial advisor and an experienced estate planning attorney to help you navigate tax issues and come up with the best strategy for transferring your assets. Call or contact us today to discuss your options.

Our office is located at 1100 E. NASA Pkwy #4220j, Houston, TX 77058 and our phone number is (832) 408-0505.

Wondering Whether You Need To Update Your Estate Plan? Yes, You Do and Here’s Why

November 6, 2023 By Gratia P. Schoemakers, Esq.

Please allow us to be frank. It’s unrealistic to think that a piece of paper you draft, reflecting your life at a certain time, will work when your life has completely changed some years later. We’ll use the Kendrick family as an example.

Meet the Kendricks

Meet Bill and Karen Kendrick. They got their first estate plan in place when their daughter, Jessica, was born 30 years ago. They updated it when their son Steve came along 4 years later. After attending one of our living trust seminars 10 years ago, they got a fantastic trust-based plan in place, protecting themselves, their children, their grandchildren, and their dog, Sadie.

Unfortunately, the Kendricks didn’t join our client maintenance program; instead, they elected to take responsibility for calling us for updates themselves. Life got busy and, as you might guess, they never called to update their documents.

Here’s what’s changed in their lives in the last 10 years.

Jessica and Steve are now adults and have graduated from college.
Jessica is married and has two daughters. One of the girls may have autism.
Steve is also married, and he and his wife are expecting their first child.
Karen’s mother is now living with Bill and Karen.
Bill and Karen bought a vacation home in Florida.
Sadie had a litter of puppies but has since passed away. Bill and Karen kept two of the puppies.

Do you think their estate plan will still work the way they want it to?

Changes in Your Own Life

The Kendricks have experienced a lot of changes, but those changes are typical of what 10 years brings. Think about the changes in your life over the past 10 years — or since you last updated your estate plan.

Have you moved? Do you have more children or grandchildren? Have you started a business, suffered health problems, or purchased a new home? Do you have new accounts and investments? Do you now care for a parent, pets, or dependent children? Have you remarried, gotten divorced, or retired? Has someone you loved died? Have friends or family named in your plan as trusted helpers moved away, or has your relationship changed? Are your children now adults and able to help you? Do you want to help with grandchildren’s college or dance lessons? Do you see the world in a different way?

Many things have happened in the past 10 years. Your estate plan needs to reflect the changes in your personal life, financial situation, and goals. There have also been changes in the law. We stay abreast of these changes to protect our clients in better and better ways, so the way we do things has changed.

Is Your Estate Plan Out of Date?

If you’ve experienced changes like the Kendricks, or it’s been more than 3 to 5 years since you updated your estate plan, it’s time to come in. We’ll review your plan and chat with you about what’s been happening in your life. We can get you and your estate plan up to date, reflecting where your life is now.

For more information or to schedule a consultation please call (832) 408-0505 or you can also click here . Our office is located at 1100 E. NASA Pkwy Suite 420J, Houston, TX 77058.

When is “Living Probate” Necessary?

October 30, 2023 By Gratia P. Schoemakers, Esq.

If you become incapacitated, who is going to take care of you? You will not be able to make medical decisions for yourself and you will not be able to manage your day-today affairs. If you do not have the appropriate estate plan in place, your family may be headed to the probate court long before you are deceased.

Conservatorship or Guardianship Proceedings

In some states a living probate is referred to as a guardianship or conservatorship proceeding. When someone is unable to manage his or her own affairs – often due to illness or older age – family members may need to seek court intervention to appoint a conservator or guardian. This court-appointed individual is authorized to make financial decisions on behalf of the incapacitated person; the same person or sometimes a different individual also appointed by the court will take over control of everyday matters including medical decisions. These living probate proceedings are public, time-consuming, and expensive.

Avoiding Living Probate

While there are several ways to avoid living probate, the best way to do so is quite simple – do the planning and appoint someone to handle your estate planning matters. This includes putting together a medical power of attorney that designates an individual you would like to make medical decisions for you on your behalf when you are unable to do so. Likewise, a financial power of attorney can designate an individual to make financial decisions for you when you cannot. You can choose to appoint the same person for both roles and different individuals – it is up to you. It is important to note that some financial institutions have their own forms that must be completed to designate someone to access your account on your behalf.

Seek Estate Planning Professionals

Because time can be of the essence when dealing with medical or financial issues, it is crucial that you have the appropriate documents prepared to facilitate these transactions when you are unable to participate. An experienced estate planning attorney can help guide you through this process and draft your documents so that they follow all applicable formalities to ensure validity.

To schedule a consultation or for more information call (832) 408-0505. Our office is located at 1100 E. NASA Pkwy Ste. 420J, Houston, TX 77058.

What To Do After a Loved One Dies

October 26, 2023 By Gratia P. Schoemakers, Esq.

If you’ve been appointed an executor of a loved one’s estate, or a successor trustee, and that person dies, your grief – not to mention your to-do list, including tasks ranging from planning the funeral, coordinating relatives coming in from out of town and (eventually) meeting with a trust administration or probate lawyer – can be quite overwhelming. First and foremost, take care of yourself during this emotional time.

To help you with the “business” end of things, here’s a quick checklist of crucial details that will make the trip to our office to handle the legal affairs easier. I know it can be difficult, but some of these things have a deadline, so make sure that you reach out sooner rather than later:

Secure the deceased’s personal property (vehicle, home, business, etc.).
Notify the post office.
If the deceased wrote an ethical will, share that with the appropriate parties in a venue set aside for the occasion. You may even want to print it and make copies for some individuals.
Get copies of the death certificate. You’ll need them for some upcoming tasks.
Notify the Social Security office.
Take care of any Medicare details that need attention.
Contact the deceased’s employer to find out about benefits dispensation.
Stop health insurance and notify relevant insurance companies. Terminate any policies no longer necessary. You may need to wait to actually cancel the policies until after you’ve “formally” taken over the estate, but you can often get the necessary paperwork started before that time.
Get ready to meet with a qualified probate and trust administration attorney. Depending on the circumstances, a probate may be necessary. Even if a probate is not needed, there is work that needs to be done to administer the trust properly. Here’s what you need to gather:
1. The deceased’s will and trust. If the original of the deceased’s will or trust can’t be located, contact us as soon as possible and bring any copies you do have.
2. A list of the deceased’s bills and debts. It’s often easier to bring the statements or the actual credit cards into the office rather than try to write out a list but do whatever is easiest for you.
3. A list of the deceased’s financial advisors, insurance agent, tax professional, and other professional advisors.
4. A list of the deceased’s surviving family members, including their contact information when available. Even if they’re not named in the trust, the attorney will need to know about everyone in the family.
Cancel your loved one’s driver’s license, passport, voter’s registration, and club memberships.
Close out email and social media accounts and shut down websites no longer needed. Depending on circumstances, to take these steps, you may need to wait until you’ve “formally” taken over the estate, but you can often learn the procedures and be ready to take action.
Contact your tax preparer.

You may be thinking about handling all the paperwork yourself. It’s a tempting thought – why not keep things as simple as possible? – but a “DIY” approach to this process might cost you and your family dearly. Read on to understand why.

Consequences of Mishandling an Estate: Examples from Real Life

Example #1: Failing to disclose assets to the IRS. Lacy Doyle, a prominent art consultant in New York City, inherited a large estate when her father passed away in 2003. He allegedly left her $4 million, but she only disclosed fewer than $1 million in assets when she filed the court documents for the estate. Per the New York Daily News: “She opened an ‘undeclared Swiss bank account for the purpose of depositing the secret inheritance from her father’ in 2006 — using a fake foreign foundation name to conceal her identity… [she also] didn’t report her interest in the hidden accounts — nor the income they generated — from 2004 to 2009.” As a result of these alleged shenanigans and Doyle’s failure to report the accounts to the IRS, she was arrested, and she now faces a six-year prison sentence.

Example #2: Misusing power of attorney. Another famous case of an improperly handled estate involved the son of famous New York socialite, Brooke Astor. Her son, Anthony Marshall, was convicted of misusing his power of attorney and other crimes. Per a fascinating Washington Post obituary: “In 2009, Mr. Marshall was convicted of grand larceny and other charges related to the attempted looting of his mother’s assets while she suffered from Alzheimer’s disease. He received a sentence of one to three years in prison but, afflicted by congestive heart failure and Parkinson’s disease, was medically paroled in August 2013 after serving eight weeks.”

Some Key Takeaways

Seek professional counsel to avoid even the appearance of impropriety when handling an estate.
Bear in mind that errors of omission and accident can be costly – even if your intent was good. An executor who makes distributions from an estate too soon can get into serious trouble, for instance. An executor’s personal assets can wind up in jeopardy if his or her actions cause an estate to become insolvent.
Even if you’re well organized and knowledgeable about probate and estate law, it’s surprisingly hard to anticipate what can go wrong. There are many ways to end up in hot water when you’re handling the estate or trust of a loved one.

We’re here to help you steer clear of the obstacles and free you to focus on yourself and your family during this difficult time. Contact us for assistance. We can help you manage estate and trust related concerns as well as point you towards other useful resources.

To schedule a consultation or for more information call (832) 408-0505. Our office is located at 1100 E. NASA Pkwy Suite 420J, Houston, TX 77058.