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4 Tips For Avoiding a Will or Trust Contest

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:

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.

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.

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.

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.

What to Bring to Your First Meeting with the Estate Planning Attorney

If you are thinking about putting together an estate plan, it is important to consult with an attorney who is knowledgeable and experienced in this area of law. Your initial meeting with an estate planning attorney is a good opportunity to discuss your family’s financial situation as well as your concerns and goals. If you are able to prepare ahead of time for this meeting, there are several items you should bring with you to benefit the most from the consultation.

Helpful Information to Bring With You

Before meeting with the attorney, consider writing down your goals and wishes for your estate plan – or the concerns or worries that prompted you to make the appointment. You may want to jot down specific information you want the attorney to know about your family dynamics, such as beneficiaries or family members you want to include or about or the fact you have a blended family. This information is critical to ensure the attorney understands who is a part of your family, who you want to benefit and protect through your estate plan, and which strategies are best to achieve your goals and unique circumstances.

Beyond this, below is a list of the most important documents you should try to bring to this first meeting:

Documents related to your assets: In an ideal world, you should have an inventory of all your bigger assets — for example, your vehicle(s), home(s), insurance policies, retirement accounts, and bank accounts. Knowing exactly what assets you own and where they can be found is critical to your estate plan.

Documents related to your liabilities: While this may not be fun, any significant debts you have must also be accounted for to create an estate plan providing the best protection for you and your loved ones. An estate planning attorney may want to use financial tools such as trusts to ensure your assets go to your loved ones and not to creditors to pay off debt.

Contact information of other advisors: Whether you use the services of a financial advisor, an accountant or CPA, or an insurance agent, be sure to bring in their contact information so that the estate planning attorney has a point of contact for each aspect of your estate plan. Estate planning is a collaborative effort, with each advisor holding a piece of your financial puzzle. By providing the contact information, it will be easier for all of your trusted advisors to work together to carry out your ultimate goals.

Prepare a list of questions: Having a list of questions and concerns can keep you on track with the discussion and ensure that you get the answers you need as you go through the estate planning process.

Please note, if the attorney has sent you forms to complete before your scheduled appointment, make sure to complete them. Our intake questionnaire is detailed and covers most of the information above and more. Depending upon the attorney’s process, these forms or questionnaires may need to be returned to the attorney prior to the scheduled meeting date. Completing these documents will help the attorney better assess your estate planning needs, make best use of the appointment time, and help you begin to think more deeply about your estate plan.

Meet Even If You Are Unprepared

Sometimes the biggest hurdle is simply making the initial appointment with an estate planning attorney. While being prepared for an initial meeting is ideal, it is not absolutely necessary. In fact, all of this information can be obtained after retaining your estate planning attorney. Preparing ahead of time, however, will give you and your attorney a head start in putting together a solid estate plan as soon as possible. While it is the attorney’s job to develop the strategy for your estate plan, it is to your advantage to identify your goals and consider the legacy you wish to leave.

If you are ready to take the next step in your estate planning journey, give us a call. Even if you don’t have all of the answers or know the right questions to ask, we are here to guide you through the process and ensure your goals are carried out. You can call us at 832.408.0505 to get your estate plan started today!

The Harmonious Family that Won’t Fight? The Outcome May Surprise You

Most families are happy families. They get together for the holidays, share laughs, and tell stories. Everyone gets along and enjoys each other’s company. Then, the matriarch or patriarch dies. Suddenly, years of pent-up resentment and hurt feelings bubble to the surface, and the once-happy family is now embroiled in litigation over the decedent’s estate.

When everyone is alive and happy, it is easy to think that nothing will break a family apart. Many people think that since everyone is getting along, estate planning is not needed because everyone will look out for one another and do what is fair. However, it is crucial that you have a properly prepared estate plan. Failing to plan not only takes all of the control out of your hands, it can also leave hurt feelings and possible confusion over what your true wishes were. This confusion will force family members to the only source able to remedy the misunderstanding: the probate court.

While a lack of planning can lead to disastrous consequences, poor planning can be just as harmful. Documents that are not up to date, vague, or improperly prepared can lead family members to challenge them. If the documents are not clear, family members may have differing opinions as to the true intention of the decedent. This is especially unfortunate for those with a trust: One of the primary reasons to have a trust prepared is to avoid court involvement.

If your documents are up to date and clearly state your intentions, but you worry that your decisions may displease your family, you do have the ability to include a no-contest clause that may prevent or limit challenges to your will or trust. A no-contest clause is a provision that states that if a person contests your will or trust — whichever document contains the clause — and is unsuccessful, they will receive nothing. However, their effectiveness can vary from state to state, so if you think your family might contest your wishes, it is incredibly important to seek the help of an experienced estate planning attorney.

One common situation where contests can arise is when someone is left out of the will or trust. If you want to intentionally disinherit a family member, consider leaving them a nominal amount at your death and using a no-contest clause. By doing this, if the contest is unsuccessful, the family member has something to lose. This may discourage them from contesting your wishes in the first place. However, as previously mentioned, you need to work with an experienced estate planning attorney to make sure that this strategy is the best one for you based on your state’s law and your family situation.

As an alternative, if you are concerned about a beneficiary receiving a sum of money outright because of creditor issues, spending habits, etc., you do not need to disinherit them. By utilizing a discretionary trust, you can set aside money for the individual that is distributed to them when and how you determine. Leaving money to a family member does not have to be an all-or-nothing decision.

Regardless of your family situation, it is incredibly important that you have a well-drafted, up-to-date estate plan in place. Will or trust contests can be very costly and can quickly drain the estate or trust, which means your loved ones will end up with less than you intended. We can assist you in creating an estate plan that will ensure that your wishes are carried out and that harmony can be maintained within your family after you are gone. Contact us or give us a call today to schedule an appointment.

James Brown’s “Vague” Estate Plan Forced Family into Years of Litigation

James Brown, the legendary singer, songwriter, record producer, dancer, and bandleader was known to many as the “Godfather of Soul.” Although he intended his estimated $100 million estate to provide for all of his children and grandchildren, his intentions were somewhat vague. This forced his family into years of litigation which ended up in the South Carolina Supreme Court.

Everything Seemed In Order…

Brown signed his last will and testament in front of Strom Thurmond, Jr. in 2000. Along with the will that bequeathed personal assets such as clothing, cars, and jewelry, Brown created a separate, irrevocable trust which bequeathed music rights, business assets, and his South Carolina home.

At first glance, it seems as though everything in Brown’s estate plan was in order. In fact, he was very specific about most of his intentions, including:

Donating the majority of his music empire to an educational charity
Providing for each of his six adult living children (Terry Brown, Larry Brown, Daryl Brown, Yamma Brown Lumar, Deanna Brown Thomas and Venisha Brown)
Creating a family education fund for his grandchildren

However, only days after his death in 2006 from congestive heart failure, chaos erupted.

Heirs Not Happy With Charitable Donation

Apparently, Brown’s substantial charitable donations didn’t sit well with his heirs. Both his children and wife contested the estate.

His children filed a lawsuit against the personal representatives of Brown’s estate alleging impropriety and alleged mismanagement of Brown’s assets. (This was likely a protest of the charitable donation.)
Brown’s wife at the time, Tomi Rae Hynie, and the son they had together, received nothing as Brown never updated his will to reflect the marriage or birth. In her lawsuit, Hynie asked the court to recognize her as Brown’s widow and their son as an heir.

In the end, the South Carolina Supreme Court upheld Brown’s plans to benefit charities and recognized Hynie and their son as an heir.

Should You Anticipate Litigation?

Brown’s estate was substantial and somewhat controversial – and he failed to update or communicate his intentions to his family. His heirs were taken by surprise. And experienced attorney could have avoided much of the family upset. Contact our office today to protect your goals or schedule your personal Estate Planning consultation NOW. We’ll help you decide whether it makes sense to avoid probate in your particular case and, if so, the best way to do so.

Just Like You Need a Medical Checkup, Your Estate Plan Needs a Checkup!

Whether or not you currently have estate planning documents, one important item to add to your calendar is getting an estate plan checkup.

Don’t Have an Estate Plan?

If you don’t already have an estate plan, then getting one in place should be at the top of your to-do list.

Why? Because without an estate plan, you and your property may end up in a court-supervised guardianship if you become incapacitated, and your property and your loved ones may end up in a time-consuming and expensive probate proceedings after you die.

Worse yet, if you don’t take the time to have any estate planning done, then the state where you live at the time of your death will essentially write one for you. It most likely won’t divvy up your property the way you would have and certainly will not protect your heirs the way you would.

A common misconception is that estate planning is only necessary for wealthy people. But this simply isn’t true – anyone with a bank or retirement account, a home, or a family needs to make a plan for what happens if they become incapacitated or when they die. Of course, the complexity of the plan will vary depending on your circumstances, but all estate plans should be put together with the help of an attorney who is experienced with the legal formalities required to create a valid will, trust, health care directive, and power of attorney in your state.

How Old Is Your Estate Plan?

Do you already have an estate plan?

If you do, then please pull your documents out of the drawer, dust them off, and look at the date you signed them.

Were your documents signed in the 80s or 90s, or, worse yet, before 1980? If so, please run, don’t walk, to an estate planning attorney, because your documents are terribly out of date and need to be updated as soon as possible.

Did you sign your documents between 2000 and 2009? Aside from the federal estate tax exemption jumping from $675,000 to $3,500,000 during that time period, state estate taxes disappeared in many states. Because of the significant changes in federal and state estate taxes, documents from this time period may be out of date and need to be tweaked in some shape or form.

Did you sign your documents between 2010 and 2017? Federal estate taxes, gift taxes, and generation-skipping transfer taxes went through major changes during these years, and “portability” of the federal estate tax exemption between married couples was introduced. Unfortunately, while your estate planning documents may only be a few years old, they very likely do not take advantage of the opportunities made available from recent changes in federal tax laws. And, it’s not just tax laws that are changing – modifications to state laws governing wills, trusts, health care directives, and powers of attorney may warrant some revisions to your estate planning documents as well.

And last but not least, regardless of what year you signed your estate planning documents, think about all of the changes in your life since you signed them. Did you get married or divorced, have a child or two or a grandchild or two, or move to a new state? Did you sell your business, retire, have a significant change in assets, or win the lottery? Any major changes in your family or financial situation will certainly have an affect on your estate plan.

Estate Planning Is Not a One Shot Deal

Estate planning is not a static event that you can grudgingly do once and then forget about it. On the contrary, estate planning is a continuing process, because life is a moving target that is full of constant change: Your estate plan needs to change as your life changes.

We are here to help you navigate the changes that have occurred since you had your estate plan prepared and ensure your wishes are still being carried out as you envisioned. For those needing an estate plan, we are here now and in the future to mold your estate plan as you move through the various stages of life.

Call or contact our office today or schedule your personal Estate Planning consultation NOW. We’ll help you decide whether it makes sense to avoid probate in your particular case and, if so, the best way to do so.

11 Planning Mistakes and How to Avoid Them

Probate and Tax Issues

They say nothing is certain except for Death and Taxes. It is no different during Probate!

As the Executor/Administrator of an estate, your duty will entail among other things the duty to prepare and file all the tax returns for the Decedent and for the Estate. To help you get started, we will discuss the most common Tax documents that get filed during Probate.

1) The Decedent’s Final Personal Income Tax Return

Because taxes are filed in yearly periods (January 1 – December 31), the Final Income Tax for the year of Death of the Decedent will likely still need to be filed. The Executor as representative of the Estate is the only person who is legally allowed to do this. The Income taxes are filed for the period January 1 – Day of Death. Any income that is generated after the Day of Death must be filed under an Estate Income Tax Return.

2) The Estate Income Tax Return

This usually is filed for income generated after someone’s Death. Examples are dividends and interests on bank accounts, oil and gas royalties, etc. General rule is that any income after the date of death must be reported as income by the estate rather than by the Decedent. This means that this income will be reported on a separate tax return, and it is important that your tax preparer understand the coordination of the estate income tax rules with the personal income tax issues of the beneficiaries and heirs of the estate. If you do not have a tax prepared, we can provide you with a knowledgeable referral. Using a professional tax preparer will also help you when you are trying to save taxes during distribution time.

When to file an Estate Tax Return?

The Estate Tax Return is filed within 9 months after the Decedent’s date of death.

As you can see, there might be some hidden surprises in the administration of an estate. It is therefore important that you work with a team of professionals who can help you complete your duties and an Executor to the standards set by Texas Law.

We at GP Schoemakers, PLLC are familiar with the Texas probate process, and have many trusted professionals in our network who can help you complete your duties as Executor/Administration. If you have questions, or would like us to represent you during probate, we are here to talk to you! You can book an appointment here, or contact our office.

If you have a fact-specific legal question, please email me, or communicate with me through my secure client area. To do so, simply login if you are an existing client, or request an introductory conference if you are interested in becoming a new client.

Executor of an Estate in Texas

Executor of an Estate v. Administrator of an Estate

In Texas someone is deemed the Executor of and Estate when there is Probate with a Will. If there is no will, but someone is appointed to administrate the Estate, that person will be called the Administrator of the Estate.

In general their duties are the same, there might be some small differences, however in most cases, the terms can be used interchangeably.

The Executor Duties under Texas Law

The main duties that Texas law requires of an Executor / Administrator are:

Identify and Collect the assets of the Decedent’s estate;
Pay any debts that the Decedent owed at the time of his or her death; and
Distribute the remaining assets according to either the Will or pursuant to Texas intestacy laws if the Decedent died without a Will.

There are several other responsibilities that an Executor / Administrator needs to fulfill, most are the same, but they are generally dictated by the type of probate administration that the Estate is been processed under (You can read more here on that subject).

The Responsibilities of an Executor

Every Estate is different, and under some circumstances, we understand that responsibilities of an executor may feel like a lot. To help you better understand he duties of the Executor we will clarify the main ones below:

Identifying/Collecting Assets: It is the Executor’s duty to identify all the assets of the Deceased as his/her time of death. Assets can be many things. Most common assets that we see are bank and brokerage accounts, stock certificates, retirement accounts, real estate, personal property, household furnishing, cars, and so on. The Court requires the Executor to provide a complete list to the Court, so that people can know the full extent of the estate. This list is called an “inventory” and must be filed as part of the probate procedure. An other duty during this process is for the Executor to ensure that the assets are collected into an Estate Account, and that items are safeguarded or secured and properly insured.
Paying Estate Debts: The main duty here is that the Executor goes over every Claimed by potential creditors, and approve or deny them based on their merit. The next step would be that the Creditors with valid claims are paid. If the situation arises that the Estate has more debt than assets, Texas Law will determine the way the debts need to be paid, in which order and in which specific pro-rated way.
Distributing Remaining Estate Assets: In most Estates, there will be assets remaining after all debts have been paid. It will be the Executor’s responsibility to distribute the remaining assets pursuant to the provisions of the Will (or if there was no will, according to Texas Intestacy laws).

Does an Executor receive Compensation?

It depends on what the will says. If the will includes a provision on how much the Executor gets compensated, then the Will decides. However if the Will is silent, the law will determine how and when a compensation is given.

It is important that you understand your role as Executor / Administrator, because you will be not only responsible to the heirs, beneficiaries or devisees of the Estate, but also the Court in which the probate procedure is pending. Taking up the role of Executor / Administrator can be time consuming, and depending on the complexity of the Estate, may require a long term commitment.

For this reason, if you have been named the Executor you might want to talk to an experienced attorney to see what your responsibilities will be, before taking up the position. We at GP Schoemakers, PLLC are glad to help you with the probate process, we can help you understand your duties, and advise you in your role. If you have questions, or would like us to represent you during probate, we are here to talk to you! You can book an appointment here, or contact our office.