McCullough & McCulloughHarlingen Probate and Estate Planning Attorney | Real Estate Law2024-03-07T19:24:57Zhttps://www.gmcculloughlaw.com/feed/atom/WordPressOn Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501332024-03-07T19:24:57Z2024-03-07T19:24:57Z potential disputes among heirs, and reduces tax obligations. For those with properties or significant assets in other states, the complexity increases due to differing state laws regarding probate and taxation.
The potential pitfalls of out-of-state estate planning
When dealing with out-of-state properties, it's important to understand that each state has its own set of laws regarding estate taxes and probate proceedings. An estate plan prepared under Texas law might not necessarily comply with the requirements of another state where you have assets, which may include:
Retirement accounts
Savings
Vacation homes
Rental Properties
Vehicles
Not understanding the way that out-of-state assets can impact your estate plan and heirs is a serious mistake. It may put your family in an exceedingly difficult and costly position. Generally speaking, a will be crafted accurately in one state and will be respected by other states.
Probate laws differ from state to state.
Of greater impact to your estate is how probate may function in states where you have property. While other jurisdictions may respect the items of a will may, each state's taxes and specific laws about what can and cannot go through probate can create issues.
Does your attorney understand cross state probate question?
A knowledgeable Texas attorney familiar with multi-jurisdictional issues can verify that all aspects of your estate plan comply with the laws of each relevant jurisdiction. Their diligence will maintain consistency across all documents. If it becomes necessary to seek an out of state attorney to take on the probate matters, your counsel in Texas may be able to help you find the right resources.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501272024-02-15T18:38:51Z2024-02-15T18:38:51ZThe property can bypass probate court
A house held in a revocable trust or left to someone else in a will is part of someone's estate. It is therefore subject to probate court oversight and could be at risk of liquidation to settle financial responsibilities. A transfer on death deed is a document that people can record without involving the probate courts. The home can transfer to a particular beneficiary without becoming part of someone's estate.
There is minimal delay in establishing occupancy
When real property transfers as part of an estate or is subject to the management of a trust, it can take quite some time to facilitate the transfer of ownership to a beneficiary. The property could potentially sit vacant for months before someone can lawfully assume occupancy of the property. The longer a property sits vacant, the greater the negative impact the vacancy may have on its value. Additionally, there is more risk of vandalism or other property crimes. A TODD allows for a rapid transfer of ownership and therefore less downtime between occupancies.
Beneficiaries know what to expect
Family members are sometimes unclear about what their loved one actually intends for their most valuable assets. Children who lose a parent, for example, might expect that they should jointly inherit the home with their siblings. There can be confusion about the terms of an estate plan, especially if family members do not read the will before someone's passing. A TODD typically requires signatures before someone's passing. Therefore, the party who should inherit the home and other family members are likely aware of who the testator intends to assume ownership of the property after their death.
More valuable assets often require careful consideration when someone begins planning their estate. Drafting a transfer on death deed can be a viable solution for real property that belongs to a Texas testator.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501252024-02-05T23:48:02Z2024-02-05T23:48:02ZIf they mismanage resources
There are very clear rules in trying in state law regarding the obligation to pay financial responsibilities during probate proceedings. If the estate does not have enough resources to fully pay someone's debt, the personal representative does not automatically become responsible for those amounts.
However, if they make mistakes during estate administration, creditors that do not receive reimbursement might take legal action. The personal representative has an obligation to send written notice to known creditors and publish notice of probate proceedings to alert unknown creditors about the estate. Creditors can file claims in probate court requesting reimbursement for the debts owed by the decedent.
The personal representative must pay any valid debts in the right order of priority using estate resources, even if the process consumes all of someone's assets. They need to pay certain costs and debts first. For example, costs associated with probate proceedings typically take precedence over unsecured debts accrued during someone's life.
The claims of creditors almost always have priority over the inheritance rights of someone's heirs or beneficiaries. If creditors can show that someone paid the wrong debts or distributed assets to beneficiaries, then they could potentially take legal action. The personal representative of the estate could be financially responsible for the debts and taxes that they failed to pay because they mismanaged the resources in someone's estate.
Those who have accepted a role as a personal representative might benefit from securing legal representation to better ensure that they comply with all requirements and do not make mistakes that could result in financial liability. An estate typically covers the cost of that representation. Ultimately, learning about the risks inherent in serving as an estate representative may benefit those who have accepted such a role.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501232024-01-18T17:54:51Z2024-01-18T17:54:51ZTexas law controls the probate process
Individuals who create their own estate plans can designate anyone that matters to them and even nonprofit organizations as the beneficiaries of their estates. People can leave property for friends and coworkers or a charitable cause that is close to their heart, like songbird conservancy.
Without an estate plan, the decedent forgoes having legal authority over the distribution of their property. The law in Texas does account for this exact scenario. There are intestate succession laws that describe what should happen with someone's property if they die without a will.
The closest family members of the decedent have the strongest protections under current Texas statutes. Someone's parents, spouse and children may be the only parties to inherit from their estate if they die without an estate plan. If an individual does not have surviving parents, a spouse or children, then their siblings may have the right of inheritance.
Even distant relatives may inherit from someone's estate when there are no closer family members to lay claim to their property. Texas does attempt to locate surviving family members if necessary to distribute someone's assets after their death. However, in the rare scenario where the state cannot locate any surviving family members, the assets belonging to someone who dies intestate would pass to the state itself.
Those who have just lost a loved one may need to go through their assets and personal records carefully looking for either a will or proof of a relationship with an attorney. The discovery of a business card for a lawyer could be the first step toward tracking down someone's testamentary documents. Either way, knowing what to expect during the Texas probate process may help people better advocate for themselves and their family members during a difficult time.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501212023-12-19T14:01:32Z2023-12-19T14:01:32Zappoint a different executor until they provide a valid reason for doing so.
What does Texas law say?
Here are some of the reasons a probate judge can remove an executor:
They’ve “misapplied, embezzled, or removed from the state” property that belongs to the estate.
They’re “incapable of properly performing any duties of trust.”
They haven’t settled the estate within three years (unless they were granted an extension by the court.
All of these things require evidence. If you’re a beneficiary, you will need to present evidence that an executor is guilty of one or more of these or other valid reasons for removal. A probate judge can also remove an executor without a petition if they have cause to do so.
Remember that if your loved one chose this person to manage their estate, they likely had a good reason for doing so. But, if you have serious doubts about an executor’s ability to fulfill their fiduciary duty to the estate and its beneficiaries, it may be wise to seek legal guidance sooner rather than later. You don’t want to interfere with their ability to do their job, but you don’t want to find out too late that your loved one’s assets are being mismanaged and their wishes are being thwarted as a result.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501192023-12-15T16:04:49Z2023-12-15T16:04:49Zdesignate a medical power of attorney, but the conversations you need to have with them can be another story. Here are some talking points so that you can make certain that you and your MPOA are on the same page.
Do they understand and accept your wishes regarding end-of-life care?
Your religious, cultural and ethical beliefs may inform your decisions about your end-of-life care. They can affect whether or not you want a “Do Not Resuscitate” order and your feelings about everything from pain medication to feeding tubes.
You need to make certain that you’ve thoroughly discussed your belief system with your MPOA and that they either share your beliefs or are comfortable enforcing them. (If they are not, you want to designate someone else). Some issues to discuss include:
If your heart stops beating, is CPR acceptable?
If you cannot breathe on your own, do you want a ventilator?
If your condition is terminal, do you want food and fluids withheld?
How do you feel about antibiotics when your condition is terminal?
Do you wish to be an organ donor? Are there any limitations?
What other advance directives do you have in place that should guide them?
Finally, you need to make certain that your designated MPOA is also confident in their ability to navigate any complications you may expect with other loved ones. Families often disagree about what’s best for a loved one in a crisis, and disputes can be heated. Your MPOA needs to be stalwart and determined.
An effective estate plan is more than just a basic will and some beneficiary designations. Seeking legal guidance can help you determine exactly what you need to secure your future and make sure that your wishes are upheld – both before and after your death.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501152023-11-13T16:49:38Z2023-11-13T16:49:38ZAdvance planning can prevent a forced guardianship
Someone facing an attempt to obtain guardianship can present their side of the situation in court. They can present evidence that can help them counter claims about their lack of mental acuity. They may have financial records or witnesses that can help them prove that they can still manage their daily lives and finances without support.
However, there is never any guarantee about how the courts will rule in such cases. It is often better to have a plan in place before someone tries to raise questions about someone's cognitive abilities. Powers of attorney are useful additions to a standard estate plan. They allow the person planning, called the principal, to name an agent or attorney in fact to manage their finances and medical issues if they become incapacitated. Many people create durable powers of attorney. These documents retain their authority even if the courts declare the principal permanently incapacitated and therefore incapable of managing their own affairs.
Although it can be unpleasant to think about what might happen if an individual loses their ability to speak on their own behalf in court or to manage their own financial resources, considering that possibility protects an individual from the worst possible outcome should that situation arise. Instead of being at the mercy of whoever seeks authority from the courts, they get to preemptively choose the person who will act on their behalf.
Taking the time to put together the right estate planning paperwork can protect people when they are at their most vulnerable and give them peace of mind as well. Seeking legal guidance can help to ensure that this paperwork is enforceable and accurately affects an individual’s wishes.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501132023-10-16T13:51:28Z2023-10-16T13:51:28Zirrevocable and revocable.
Irrevocable trusts
Irrevocable trusts are established as a permanent estate planning option. Once assets are moved into this trust, they're no longer under the ownership of the person who transferred them. While this type of trust has limitations, those same limits provide considerable protection.
One protection is that your creditors can’t stake claim to the contents of the trust once it’s funded. This enables you to pass down assets to your loved ones without worrying about lawsuits taking them away. This is especially beneficial for people with high-risk occupations subject to legal claims.
Various trusts have different purposes. For example, a special needs trust, an irrevocable trust, is a beacon for those catering to beneficiaries with disabilities. By channeling assets through this trust, you can ensure your loved one has the financial means to thrive without endangering their access to essential government assistance.
Charitable remainder trusts are another notable type. They promote philanthropy by providing charities with a stream of income for a specified duration, after which the residual assets return to non-charitable beneficiaries. Another type is the life insurance trust. It holds a life insurance policy, ensuring the death benefit isn't considered part of the taxable estate.
Revocable trusts
Revocable trusts are the opposite of irrevocable trusts because they can be altered or completely canceled if you change your mind about the terms or beneficiaries. You maintain control of the assets even after the trust is funded. The downside to this is that these trusts don’t provide the assets with protection from creditors and they don’t have the same tax advantages as irrevocable trusts.
Remember, a trust is only one component of a comprehensive estate plan. Seeking legal guidance is important so you can develop a strategy that accomplishes your goals.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501102023-09-13T07:36:45Z2023-09-13T07:36:45ZTexas does not collect an inheritance tax
Regardless of whether the beneficiaries of an estate live in Texas or in another state, they will not have to worry about taxes due to the state of Texas. There are no inheritance taxes collected in Texas, just as the state does not levy a tax on the estate itself based on its value.
However, there could be some taxes due from beneficiaries depending on how they handle the assets that they inherit. Particularly in scenarios where beneficiaries choose to liquidate certain assets, like real property in Texas, there could be capital gains taxes triggered by that transaction that they will need to cover. Those will be federal taxes, as opposed to Texas state taxes. There will be no need to file any additional tax paperwork with the state of Texas related to one's inheritance.
The personal representative of a Texas estate seeking to avoid personal liability for taxes will need to ensure they comply with state laws while simultaneously providing the financial information that beneficiaries will need to fulfill their responsibilities.
Ideally, any testator will have planned carefully to minimize tax obligations. Their planning could help reduce the possibility of both federal estate taxes and capital gains taxes owed by the individual beneficiaries of the estate.
Learning more about the tax requirements for Texas estate administration can be a useful step for those planning an estate, those administering an estate and even those hoping to inherit from one.]]>On Behalf of McCullough & McCulloughhttps://www.gmcculloughlaw.com/?p=501082023-08-12T02:21:47Z2023-08-12T02:21:47Zbusiness type or form someone selects. There are many different types of businesses that people choose to start and operate in Texas, ranging from limited liability companies (LLCs) and corporations to sole proprietorships and partnerships. Those trying to start a company need to choose carefully when deciding what type of company to start, and carefully considering the three factors below is often part of that process.
The level of risk
Someone who wants to start an online shop selling bespoke clothing would have very minimal risk initially because they won't have a physical location and may not intend to hire any employees. Their products are unlikely to cause injury to anyone. Other business models may require physical facilities and dangerous equipment that could lead to people getting hurt. They may produce products or provide services that come with some degree of risk for customers and clients. The likelihood of injury or financial claims against the company in the future can have a major influence on the right type of business to start.
The one, five and 10-year plans for the business
It is usually advisable for those considering an entrepreneurial endeavor to learn about the market and plan the company's development and growth. The faster the company will expand and the bigger the final goal for the organization, the more important it may be to put together a complex, formal business structure. Those anticipating major growth, hoping to become a publicly traded organization or aspiring to operate a national level will often require more complicated business structures than those intending to keep things small and operate locally.
The amount of support someone requires
Running a hot dog cart at a local beach or tourist attraction may only require one worker and minimal administrative support. More complex business models may require outside investment and numerous types of professional help, ranging from accounting services and investors to on-site medical professionals. The more support someone needs either from outside entities or employees and investors, the greater the likelihood that they will need to choose a more complex structure.
Those who take the time to think about their current needs and future plans for their new business will have an easier time choosing the right form for the company they want to create. Taking thoughtful steps to protect oneself early in an entrepreneurial endeavor can be as important as having the courage to move forward with a new business idea in the first place.]]>