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4 Tips For Avoiding a Will or Trust Contest

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A will or trust contest can derail your final wishes, rapidly deplete your estate, and tear your loved ones apart. But with proper planning, you can help your family avoid a potentially disastrous will or trust contest. 

If you are concerned about challenges to your estate plan, consider the following:

Trusts and Will Contest
  1. Do not attempt “do it yourself” solutions. If you are concerned about an heir contesting your estate plan, the last thing you want to do is attempt to write or update your will or trust on your own. Only an experienced estate planning attorney can help you put together and maintain an estate plan that will discourage lawsuits and ensure all legal formalities are followed.
  1. Let family members know about your estate plan. When it comes to estate planning, secrecy breeds contempt. While it is not necessary to let your family members know all of the intimate details of your estate plan, you should let them know that you have taken the time to create a plan that spells out your final wishes and who they should contact if you become incapacitated or die.
  1. Use discretionary trusts for problematic beneficiaries. You may feel that you have to completely disinherit a beneficiary because of concerns that he or she will squander their inheritance or use it in a manner that is against your beliefs or harmful to them. However, there is an alternative to disinheriting someone. For example, you can require that the problematic beneficiary’s share be held in a lifetime discretionary trust and name a neutral, third party, such as a bank or trust company, as trustee. This will ensure that the beneficiary will receive his or her inheritance according to the terms and conditions you have dictated, while keeping the money out of the hands of unintended parties, such as creditors or an ex-spouse. You will also be able to control who will inherit the balance of the trust if the beneficiary dies before the funds are completely distributed.
  1. Keep your estate plan up to date. Estate planning is not a one-time transaction – it is an ongoing process. Therefore, as your circumstances change, you should update your estate plan. An up-to-date estate plan shows that you have taken the time to review and revise your plan as your family and financial situations change. This, in turn, will discourage challenges since your plan will encompass your current estate planning goals.

By following these four tips, your heirs will be less likely to challenge your estate planning decisions and will be more inclined to fulfill your final wishes. If you are concerned about heirs contesting your will or trust, please contact us as soon as possible.

Financial Firms Roll Out Form Aimed at Stopping Financial Elder Abuse

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With cases of financial exploitation of the elderly on the rise, advisors who work with older clients are looking for ways to head off the abuse before it happens.  Enter the “Emergency Contact Authorization Form,” a document in which clients can list a trusted person who should be contacted if an advisor suspects a client is starting to lose their mental capacity or, worse yet, being financially abused or scammed.

How Does an Emergency Contact Authorization Form Work?

The Emergency Contact Authorization Form is a document which allows you to identify someone your financial advisor can contact if your advisor becomes concerned about your ability to continue to manage your finances or believes you are being taken advantage of financially by a relative, friend, caregiver, or even a complete stranger.

The Emergency Contact Authorization Form does not take the place of your “Durable Power of Attorney,” which is a legal document in which you give a person you trust the authority to make financial decisions and carry out financial transactions on your behalf.  Instead, the form allows you to designate an individual your advisor can contact to discuss concerns they have about your slipping mental capacity, unusual activity in your accounts, requests for transfers of large sums of money to an unknown person or a foreign bank account, and the like.  This designated individual could be the same person as the agent named in your Durable Power of Attorney or some other trusted person in your life. The idea is that once your advisor makes your emergency contact aware of the issues, your contact can reach out to you to determine if the advisor’s concerns are legitimate.

What Should You Do?

Since your financial advisor is in a unique position to know your financial history (for instance, you take a trip to Europe every June, you have been helping your grandkids with their college tuition, you like to make your charitable donations in October to avoid the year-end rush), your advisor is also in a unique position to spot unusual activity and requests.  Thus, when your advisor asks you fill out an “Emergency Contact Authorization Form,” carefully consider who you should name, discuss your choice with your advisor, complete the form, let the person you’ve chosen know that they have been designated, and give that person your advisor’s contact information.

Nonetheless, keep in mind that while an Emergency Contact Authorization Form is a good start, it will only work at the institution where it is on record.  To insure that all of your financial accounts will continue to be managed and your bills will get paid if you become mentally incapacitated, you will need to sign a Durable Power of Attorney. 

Please contact our office if you have any questions about Emergency Contact Authorization Forms, Durable Powers of Attorney, or if you suspect a family member or friend is being financially exploited or abused.

Is now the time to remodel your old trust?

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There are several reasons why you should update your existing trust or perhaps your entire estate plan.  While estate planning documents do not necessarily have a shelf life, they may not fulfill your goals when your circumstances change.  Of course, having estate planning documents that are up-to-date is critical, but how do you know when you should make changes?

Reasons to Make Changes

It is important to note that just because you have a trust in place does not mean you are bound to keep it as is; this is even true if the trust was inherited from someone else.  Indeed, there is more than one way to make necessary changes: sometimes you can establish a new trust or simply revise the terms of an existing trust.  Finally, making changes to an existing trust – and other estate planning documents – can help you save money and costs, and it may allow you to make better investments decisions.

Below are some reasons to update a trust or other estate planning document that determines how your assets will be disposed of at the time of your death or incapacity.

  • Your marital status changed: This situation nearly always affects what a person wants to do with his or her assets upon death or incapacity.  A new marriage should prompt you to define your spouse’s share of the assets.  Otherwise, local intestate laws will dictate their distribution.  When there are children from prior marriages, a second or subsequent marriage should alert you to put together an estate plan that addresses your blended family.  Although divorce may automatically remove your spouse as a beneficiary under your will, it always makes sense to have a comprehensive review of your estate plan after a divorce.
  • Children entered the picture or grew up: When children have joined your family through a recent birth, adoption, or blended family, you need to have a plan in place in the event something happens to you.  This is particularly true if you want to determine how and when the children receive the funds they will inherit, which can be addressed with a trust.  Likewise, your old trust may have been written years ago, when the children were still minors.  Circumstances have likely changed since then.  You may want to update the trust to better match your family’s current needs.
  • Tax laws have changed: Over the past few years, federal estate tax laws have undergone significant changes – and even more so over the past 15 years.  A trust that was initially designed to avoid estate taxes may now just unnecessarily tie up your assets.  This may be a reason to “unwind” a trust when the tax reasons are no longer necessary.
  • Your choice of trustee has changed: Be sure to check your trust and other estate planning documents once a year and make any updates to your choice of trustee, beneficiary, executor, and so on.
  • Your assets have changed drastically: Updates to your old trust and other estate planning documents are likely needed if you have experienced a substantial change in assets.  This may need to be addressed if you have inherited or earned enough assets to exceed the estate tax exclusion; the tax provides a lifetime exemption of $11.58 million per donor in 2020.

Get Good Advice

While these are the most common reasons to update an old trust, they are not the only impetus for giving your estate plan a tune-up.  Even if you are unsure whether changes to your old trust are necessary, be sure to seek out a qualified estate planning professional to help you make sure you and your loved ones are well prepared for the future.  Call or contact us today.

Why Your Estate Planning Project Must Morph into a Process

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Many people put their estate plan on their to-do list as a one-time project: “Create estate plan” or “Meeting with lawyer 10:30 a.m. Thursday for estate plan.”

Thinking of your estate plan as a single project or task to complete and move off your list is a common approach – but it’s also an approach that can land you in considerable hot water.  Here’s why it’s essential to view your estate plan as a process, rather than a project.

Process vs. Project: What’s the Difference?

A project that takes several steps to complete – like an estate plan – can seem like it’s a “process” already.  First, I need to call the lawyer.  Then, I need to make time to attend the appointment.  Before that, I need to get together these documents….

In fact, a project doesn’t become a process simply because it takes time and effort to complete.  Here are some of the key differences between a project and a process.

A Project:

  • Seeks to create something new or implement a single, concrete change.
  • Requires leadership to plan and execute.
  • Can have its plans or goals changed on short notice.

A Process:

  • Creates value by returning to the same task many times.
  • Requires management to ensure the process is consistent and produces expected results.
  • Can be changed only by launching a project with a goal to change the process.

Estate Planning as Process

When you’re creating a new estate plan, it’s natural to see that plan as a project.  You’re creating something new when you work with a team to implement your plan.  You create a positive change in your life by having an estate plan from not having one.  And, you’re right.  Setting up a trust or implementing your first estate plan certainly qualifies as a project.

But, the goal of the estate plan “project,” however, should transition into an estate planning process by which you check, evaluate, and update your will, trust, and other legal documents regularly – perhaps once a year, but certainly every time you hit a major life milestone, like the birth of child or grandchild, death of family member, divorce, marriage, significant change in assets or income, and the like.  When your estate planning is viewed as a lifelong process, your plan is much more likely to serve your family’s needs, whatever they may be, when the time comes simply because you’ve been managing it proactively with each change in your circumstances.

We can help you get started with estate planning and are here to guide you along the entire process.  Let us become your ally in managing the process and in ensuring that you and your family gain maximum value from returning to it on a proper schedule.

Virtual Estate Planning in the Age of COVID-19

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As the New Normal has set in, and the COVID-19 guidelines are making traditional estate planning services impossible, we are still receiving requests by people to do their estate plan.

If you are a fellow Texan looking to plan, we can help you. We have been helping people with their online planning for nearly a decade now, and are ready to serve you.

Our flat fee simple estate plan package includes:

The Texas Estates Code requires a valid Texas Will to be executed in the presence of two disinterested witnesses and a notary. To ensure both your and our team’s health and safety, we have implemented alternative methods of getting your documents signed, without needing to come to the office or leave your home.

Once we are retained, our Law Firm will prepare your estate plan package and electronically send the documents to you for review. You can review the documents with your attorney by telephone, or Zoom conference. We will provide you with detailed instructions on how to line up your two disinterested witnesses. We will also assist in scheduling a mobile notary to come to your location for the signing ceremony.

Once final edits to your documents are made, we will send you the final drafts to print. We will schedule a signing ceremony time to finalize your arrangements. When the time comes for the signing ceremony, we will utilize video conferencing software (compatible with most smartphones, tablets, and computers) so our attorney can guide you through the signing process.

How do I get started?

Step 1: Request or schedule an initial Consultation.

Step 2: Complete the online estate planning questionnaire.

Step 3: Our estate planning attorney go over the completed questionnaire with you, make any necessary changes, and draft your estate planning documents for you.

For questions or to schedule an initial consultation, call GP Schoemakers, PLLC at 832-408-0505 or book a consultation here.