Wills

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.

Did Whitney Houston Leave Too Much Money To Bobbi Kristina?

Whitney Houston’s estate was worth approximately $20 million when she died – plenty to meet the needs of her only daughter – Bobbi Kristina. Sadly, only a few years after Houston’s death, Bobbi Kristina died as well.

Although Bobbi Kristina’s previous boyfriend, Nick Gordon, is still a suspect in her murder, many say that having access to so much money at a young age was a contributing factor. Sadly, Houston’s estate planning mistakes are all too common.

Aunt & Grandmother Says The Will Did Not Depict Houston’s Intentions

Houston’s aunt and grandmother filed a lawsuit to re-write the will as they say it didn’t accurately depict what Whitney really wanted for Bobbi-Kristina. They claimed that she was too young to handle so much money.

Although they likely had the best of intentions, probate courts must follow the terms of the actual will or trust documents, not what the person who died might have otherwise intended.

Whitney Houston’s will was created in 1993, specifying that a trust would be created after she died for any children she may have (so before Bobbi-Kristina was even born). Unfortunately, she never updated her will before she died.

Inheriting Money at a Young Age is Never a Good Idea

Whether this tragedy could have been adverted if Bobbi Kristina’s distributions were delayed until she was older is anyone’s guess. The bottom line is that inheriting large sums of money at a young age is generally never a good idea. Although the young beneficiary might be responsible, young people can be easily manipulated by others.

While it’s clear that Houston could have better protected that money with a stronger estate plan, she’s certainly not the only one guilty of not following through. In fact, many of us have the best intentions, but simply don’t make the time to create – and update – proper estate planning documents that can help beneficiaries.

Set Your Beneficiaries Up For Success!

You do have the power to set your young beneficiaries up for success. In most cases, that means creating a trust that allows them access to money over time and can be managed by someone you trust and has their best interests at heart.

We can provide you with the tools you need to protect your loved ones – whatever your situation may be. As Houston’s case shows, ignoring estate planning issues can have tragic consequences. Call or contact us today and let’s get started protecting you and those you love.

Wills Vs. Trusts: Take Control of Your Wealth Distribution

You work hard for your money and want to ensure that your wealth distribution goes according to your wishes upon death. Sadly, many people simply don’t understand the difference between wills and trusts and how they can affect inheritance. Don’t be one of them! Take control of your wealth distribution by understanding what wills don’t control and the benefits of a trust.

5 Things a Will Does Not Control

Most people believe that a will encompasses and controls all of your assets. That is simply not the case. Proper asset ownership for will-based plans can be confusing. However, the bottom line is that a will only controls assets in individual names; it does not control:

Trust assets
Retirement accounts / pension plans
Life insurance
Annuities
Employee benefits

While having a will allows you to avoid having a court decide who gets what, a trust can generally protect you even further.

5 Benefits of a Living Trust

There are many benefits to a living trust, including these five:

Avoiding the public, costly and time-consuming court processes at death (probate).
Avoiding the same regarding incapacity (conservatorship or guardianship).
Providing for spouses without disinheriting children.
Saving estate taxes in some cases.
Protecting inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending.

Many types of assets can be funded into your trust, such as real estate, bank accounts, investment accounts, and intellectual property rights. Others might include:

Notes payable to you
Life insurance – if you don’t have an irrevocable life insurance trust
Business interests
Oil and gas interests
Personal effects – artwork, jewelry, collectibles, antiques

It’s important to work closely with your estate planning attorney to make certain that all of your assets are distributed according to your wishes – and done so with the least amount of cost and time delay. Contact us today! Call our office at 832.408.0505 or schedule your appointment right now for more information about wills, trusts, and other financial planning issues and let us help you decide what’s best for your situation!

Celebrities Who Failed To Recognize Unborn Children in Their Wills: A Teachable Lesson

Having an estate plan that protects and provides for your loved ones is not only smart, but it’s also necessary. Without one, your family, friends, or the charitable organizations you wish to provide for may not receive your gifts.

It’s also important to remember to update your estate planning documents whenever something changes that would affect your intentions.

Michael Crichton. Crichton was a best-selling author, physician, producer, director, and screenwriter. He was most known for his work in science fiction including books such as Jurassic Park, Andromeda Strain, The Lost World, and many more.

Sadly, he died of cancer in 2008 leaving behind a grown daughter from a previous marriage as well as his current wife, Sherri Alexander, who was pregnant with his son. As an admitted workaholic, Crichton never got around to updating his estate plan to provide for his unborn son.

When he passed, his net worth was approximately $175 million. Sherri Alexander filed a lawsuit against the estate to include her son in the will. However, Crichton’s grown daughter, Taylor, opposed the lawsuit, and a long and drawn-out court battle ensued. A judge ruled that the son would inherit, but it likely cost millions of dollars in attorneys’ fees and much stress before that decision was made.

Heath Ledger, an Australian director and actor, was most known for his role as the Joker in Dark Knight. Although only 28-years-old, his estate had a net worth of approximately $16 million. His will left his entire estate to his parents and three sisters. He failed to update his will even when he had a child (Matilda) with Michelle Williams and died from an accidental overdose of prescription drugs in 2008.
The ensuing family legal battles lasted for over five years. Similar to Crichton’s situation, Ledger’s daughter wasable to inherit – but again, not without spending a lot of money on litigation.

No One Likes To Think About Death, But It’s Necessary

Most people don’t like to think about their death and dealing with estate planning documents often forces us to do just that. However, as these situations show, it’s an important and necessary task to undertake.

Find out how we can help you protect your loved ones whenever you’re facing a pregnancy, birth, marriage, divorce, or anything which can affect your estate. Contact us today! Call our office at 832.408.0505 or schedule your appointment right now.

5 Tips for Successfully Receiving an Inheritance

If you recently received an inheritance, or are expecting to receive one in the near future, it has likely triggered mixed emotions in you. You have lost a loved one and also experienced monetary gain. Studies show that a third of Americans who received an inheritance completely spent it within two years of receipt. Below are five practical steps for you to follow to maximize and protect your inheritance.

Take your time. Allow yourself to be emotionally ready. Making decisions on what to do with your inheritance while you are experiencing challenging emotions is not optimal. Be sure to commit to self-care — whether counseling, meditation, or family and spiritual support to help you work through this process.
Get advice. Before you make any major decisions — such as paying off debt, investing in a business idea, or something else — make sure you seek professional financial advice. This is especially true if you have never managed a large amount of money before. Of note, an inheritance may affect your ability to receive certain benefits, so working closely with an attorney can help minimize any impact it may have.
Strings attached. Understand whether or not there are any restrictions to receiving your inheritance. Whether you are being given the assets outright, relying on trustee discretion as to the distribution timing and amount, or something in between, your estate planning attorney can help provide solutions for you. The estate planning attorney can also assist you if you are subject to a state inheritance tax.
Update your estate plan. An inheritance will change your asset level and mix. Therefore, your estate plan needs to be reviewed and possibly adjusted to make sure you are fully protecting yourself and your loved ones.
Great expectations. If you are yet to receive the inheritance but it is on the horizon, consider working with the relative that will leave assets to you and your estate planning attorney. Creating an “inheritor’s trust” instead of leaving the assets to you outright — although a difficult topic to discuss — can provide long-term asset protection and preservation for you.

How We Can Help

Receiving an inheritance can be bittersweet and emotions may run deep during this time. But putting your inheritance to work to help achieve your short-term and long-term financial goals is a great way to avoid misusing these assets. Being informed is half the battle, so give us a call right away to learn more about your options under the law. Call our office at 832.408.0505 or schedule your appointment right now.

Stress Test Your Estate Plan

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 contact us or give us a call. Estate planning is an ongoing process, and we want to make sure your wishes withstand the test of time. You can also book an appointment online. We are here to help and love to talk to you.

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.

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.

Wills

How We Can Help

Don’t Have an Estate Plan?

How Old Is Your Estate Plan?

Estate Planning Is Not a One Shot Deal

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