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After a divorce, most people assume that the divorce decree has taken care of everything relating to their shared assets and finances.  Unfortunately, this is not always true.  After a divorce decree is signed, there are several important steps that need to be addressed to fully complete the process, particularly in the area of estate planning.   One vital step after a divorce is to update estate planning documents and beneficiary designations, or to get an estate plan in place if one has never been prepared.  For example, if your planning documents were based on a marriage relationship that no longer exists, it is probably necessary to update your documents to reflect your desires for your executors and agents.  Also, it usually the case that …

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Beneficiaries under a Will must have the Will probated for it to be effective.  Unfortunately, the person with the Will sometimes sits on their hands.  For example, what should a person do when a parent has died, but the step-mom (whom you believe has custody of the Will) isn’t doing anything with it?      Out of respect for grief and family harmony, children often allow some time to pass after a death before asking a step-parent about the deceased biological parent’s Will that they know or believe exists.  But, after some time has elapsed, the children would like to know whether there is, in fact, a Will and whether anything is going to be done with it.   Why does this happen?   This …

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Optimism Isn’t Enough   New business partners often have a shared optimism that gives them the willingness to take on the risks associated with creating a business from scratch.  They can envision their new business achieving each milestone toward profitability and defeating every hurdle.  After the entity is formed, any further formalities feel like an unnecessary obstacle to getting the business up and running.  After all, why document how to split profits or divide duties when that has already been discussed and agreed upon in an email?  We all get along now (when the business isn’t worth much), so why wouldn’t we agree in the future (when the business is valuable)?   Whether your business is a startup or has been operating for many years, …

Lost Life Insurance Policies

In Life Insurance, Probate by Tarleton

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The Problem.    Unfortunately, it is not uncommon for life insurance policies to be purchased by young adults who then bury the policy documents in a file drawer but keep paying premiums every year.  Even though the policy is usually bought to provide a safety net for young children, when the children become adults the parents may never fully inform the children about the policies that may still exist.   In addition to uninformed family members, an added problem is that some life insurers have historically not been proactive about pursuing payment of death benefits to beneficiaries.   In 2016, 60 Minutes aired a story covering the audits of dozens of large insurance companies who agreed to pay more than $7.5 billion in back death benefits …

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Why own a home in a Revocable Living Trust?   If you own real estate in your personal name at death, some form of probate in the state where the property is located will be required to transfer the property to your heirs or beneficiaries.  In order to avoid or minimize probate (especially for individuals who own real estate or mineral interests in multiple states), clients sometimes include a Revocable Living Trust in their estate planning since assets in the trust pass outside of probate.   If your estate plan includes a Revocable Living Trust (“RLT”), it is important to understand not only the terms of your trust but also the laws that govern the transfer of your real estate to the trust.   Signing …

Family Loans

In Loans, Real Estate by Tarleton

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“Neither a borrower nor a lender be; For loan oft loses both itself and friend.” William Shakespeare   As discussed in a recent article [1], Millennials are increasingly borrowing funds from mom and dad rather than a traditional bank – most commonly asking for help in making a down payment on a new home. Given the difficulty of making a home purchase in the present market and the significant expense involved, parents should seek legal advice regarding their options to best provide financial support to a child and ensure appropriate documentation is in place.   Some important scenarios for parents to consider include the following:   > What if the child later becomes unable to repay a loan?   > What if the child becomes …

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Easter is almost here, so in that vein this week’s post looks at planning for a “nest-egg”. For most of us, that means talking about retirement accounts, whether using an IRA, SEP, 401k, or 403b. A budget for how to use retirement savings is good, but it is also vital to make sure retirement accounts are aligned with your overall estate plan. Retirement accounts can often hold the bulk of assets left to loved ones, so planning for a retirement account may, in fact, be the central focus of an estate plan. This also includes making sure you have a plan for access to your retirement savings if you ever needed help managing your finances during retirement.   RETIREMENT PLANNING & POWERS OF ATTORNEY   …

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When determining which assets require the probate process, it is important to understand the difference between assets that are categorized as “probate” assets versus those that are “non-probate” assets.   PROBATE ASSETS.   These are assets that are held in the deceased individual’s name at the time of his or her death, and are distributed by the probate process to the heirs or beneficiaries of the estate.  Such assets generally consist of any of the assets that are not otherwise distributed through a non-probate process, as described below.  The probate process used to transfer a probate asset can vary depending on the type of asset and whether a Will exists.  When a valid Will exists and the Will appoints an Independent Executor, the probate process can …

What are the risks of DIY Wills?

In Wills by Tarleton

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CONSIDER THIS BEFORE WRITING A DIY WILL   Thinking about writing your own Will in Texas without an attorney?  First, consider the following points.   We all know that a Will is one of the most significant legal documents you’ll ever sign, and it provides an opportunity to: (1) have your wishes heard (and followed) and (2) make sure things go smoothly for your family after you pass.  An improperly written Will or incorrectly executed Will can end up failing to achieve either goal, and worst of all you won’t know until it’s too late whether you got it right.  If a mistake was made, your family will have to find that out at the same time they are dealing with losing you.   Every …

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Effective as of January 1, 2018, the recently enacted Tax Cuts and Jobs Act (“TCJA”) made many significant changes to the tax law, including the area of estate and gift taxes.  These changes present an opportunity to take advantage of a historically large exemption amount, and should also prompt a review of existing estate planning documents and beneficiary designations (particularly if such plans were made based on the much lower exemption amounts before 2010).   Temporary Increase in Federal Estate, Gift, and Generation-Skipping Transfer (“GST”) Tax Exemption Amount   Increased Exemption. For 2017, individuals had an exemption of up to $5.49 million against Federal estate, gift, and generation-skipping transfer taxes ($10.98 million for a married couple).  For 2018, those exemptions are now doubled, to approximately $11.2 …