Monthly Archives: May 2014

Guardianship: Who will get your children if you die?

Guardianships

Not even our El Paso readers like to think about dying, but it will sooner or later happen. The question is “when” and few of us can predict that. Therefore, like insurance, we should take care of preparing for our loved ones in the event it happens.

If you have a will or an estate plan, you are ahead of the game. If you don’t, you may be wondering why you need one. Let’s start with the most important reason.

What’s going to happen to your children? Who will get guardianship over them? If you do not designate a legal guardian, a probate judge may be deciding the fate of your children as well as what assets they get. A will allows you to designate a guardian of your choice.

It also, of course, allows you to decide how you would like your estate or assets divided. You may have treasured items that you would like a specific family member to have. If you don’t do your estate planning now, an outside party will do it for you.

Preparing a will or trust makes you take inventory of your assets. You can select who you want to handle your finances, investments and other important matters. Designate your beneficiaries.

Select an executor of your will. Someone will need to handle the distribution of your assets. You will want to choose someone who is not only trustworthy but also responsible and organized.

What if something happens to you where you become incapacitated? You may want to assign a power of attorney, where someone can handle your financial decisions in case you are unable. You can designate when they can or cannot use the power of attorney.

A living will, or advance medical directive, allows you a say in your medical care. In a living will, you can make all of your health care decisions while you are able. In case you are not able, you will have a written directive of your decisions. This is a good safeguard in the event that you are in a serious accident and are unable to voice your decisions.

Source:insurancenewsnet.com, “Estate Planning: Get Ahead” No author given, May. 30, 2014

Estate-related legal issues to consider when moving state

Estate Administration

Whether you’re moving into or out of the state of Texas, it’s important to consider all the legal and financial ramifications. One area to take a look at is estate complexities that can occur when your wills or other documents are somehow linked to the state of origin. Though a properly executed will should be valid in any state, it doesn’t hurt to review your estate planning for things that could cause issues in your new state.

One thing you’ll definitely want to review involves legal documents relating to medical concerns. Health care powers of attorney, living wills and directives may all be governed differently in your new state. To ensure your wishes are carried out during an end-of-life situation, have documents edited or changed to reflect appropriate state laws.

Your will or other estate documents might also reference certain state laws within the text. As a resident of a new state, those references may no longer have any effect and could complicate the administration of your estate. To avoid complex probate issues or confusion, make sure your documents are edited to remove state references or are brought in line with appropriate regulation in your new state.

Another area of concern to couples with estate planning documents in place is whether a state is a community property state. Texas and many other states operate on the basis of community property, which changes the way assets are handled in the event of a divorce or death. When relocating to or out of a community property state, review estate documents to ensure proper protections are in place for heirs and surviving spouses. The best advice would be simply to have a professional examine your documents before your move.

Source:The Spectrum, “State-to-state estate planning creates issues” Scott Halvorsen, May. 22, 2014

Texans, protect your assets by sound estate planning

Estate Planning

It is a common misconception is that you need to belong in a high tax bracket in order to have an estate plan. According to experts, though, everyone has something of value to leave behind. This is especially true in Texas, where not everyone owns a cattle ranch or comes from an oil-rich family.

Everyone should have a will and a plan for the property and assets they leave behind. You may not have a huge amount of money in the bank, but you do have something. Your home, vehicles, furniture, investments, pension, insurance and Social Security benefits are all part of your estate, and it is never too soon to start planning.

If you become mentally incapacitated or die, consider designating a caretaker of children and your finances.

We want our beneficiaries to enjoy a smooth transition of estate and assets, a stress-free life. Sound planning ensures children and grandchildren will be fairly treated to avoid squabbles later. Think about who you trust to manage your assets if you become disabled or pass away.

A durable power of attorney is a legal provision that can prevent your affairs from being mismanaged. You can include access to bank accounts or stocks for a spouse or child and spell out directions for selling your house.

Estate planners recommend declaring who will be your guardian should you become incapacitated. The person you select must be trustworthy and able to act in your best interests.

You may want to appoint someone for your health care power of attorney. This should be someone you trust to make important decisions for you if you are unable. This designated individual to might need to give advanced directives to physicians and reflect how you view life-sustaining care.

What we leave behind is not always represented by monetary value. We choose our legacy by not putting off decisions about estate planning but by making smart decisions while we live. In Texas, there are competent individuals who dedicate their careers to making sure you go to your final resting place at peace with the decisions you make. Seek help with your estate planning regardless of your perception of its wealth. The choices you make can affect how you will be remembered by your loved ones after you are gone.

Source:Mail Tribune, “Don’t have an estate? It still pays to plan as if you do” Pamela Yip, May. 18, 2014

Texas residents fighting the government for Red River land

Real Estate Disputes

Land disputes can be complicated, but when you’re fighting the government, it might help to have some Washington politicians on your side. Texas land along the Red River has some Texas politicians concerned that a potential “land grab” may be in play from the Bureau of Land Management. Senator Ted Cruz, Governor Rick Perry and Attorney General Greg Abbott are trying to protect Texas citizens’ claims to 116 miles of land along the southern border of the Red River.

The BLM claims that the government has owned the land since the Louisiana purchase in 1803. A spokesperson for the agency also alleges that the U.S. Supreme Court confirmed their ownership of the land in the 1920’s. However, Texas citizens have allegedly been paying taxes on the land and developing it as their own for years.

The gray area in this real estate dispute is around the boundaries. Red River runs between the Oklahoma and Texas border, with the middle of the river designated as the state line, per the Supreme Court decision in the 1920’s. The land owned by the government was supposed to encompass anything “between” an area north of the invisible state line — in Oklahoma territory — to cut-out banks on the Texas side. However, with normal erosion and changes in the river over the years, the river’s location is altered, and it is now uncertain who owns what.

In 1986, a dispute between Oklahoma and Texas ranchers included one Texas man who had purchased 140 acres of land for $300,000. In his case, the government’s claim was upheld by the courts, and the man lost his land.

In regards to the Red River real estate, the BLM is in the process of planning use for the land. The planning process began last year. It is unclear whether any legal action will take place between the Texans and the BLM over the land at this point. A lot of complaints have been coming in according to an Oklahoma land office agent.

However, for a real estate dispute to take place, a citizen will have to file a legal action. Their attorney will need to be very thorough in researching and preparing their case. They will no doubt have to research the past documented land and river boundaries, as well as provide current boundaries and proof of ownership of the land.

Source:Dallas News, “Red River land dispute echoes Cliven Bundy fight in Nevada” Nick Swartsell, Apr. 30, 2014

Estate planning is important for all Texas residents

Estate Planning

Did you know the state of Texas puts a will in place upon a resident’s death if there is no other estate documentation on file? The state will may not match your desires when it comes to dividing assets or passing property on to heirs. Estate planning is the best way to ensure your wishes are followed and is important even if you aren’t considered wealthy.

Many people avoid creating wills, trusts or other estate documents because they don’t feel they have a great deal to pass on to others. In reality, everyone has something to pass on, and estate planning can cover items and assets such as tangible personal property, bank accounts, Social Security benefits and pension payments. From family heirlooms to mineral rights, it’s important to draft estate planning documents that clearly define your wishes for disbursement.

Some individuals consider a basic will to be all the estate planning they require. Experts say there are some important questions involved in the estate planning process that may lead you to create more than a simple will. For example, individuals with young children should consider who would take care of kids if one or both parents died suddenly.

Other questions to consider are about your own health and capability. It’s common to consider power of attorney and other options for later in life, but what if you’re involved in a car accident that leaves you unable to care for yourself and your finances? Estate planning ensures a trusted person is in line to handle your affairs.

Some individuals create estate documents to avoid complications and probate. A clear, legally solid document reduces the risk of contests and the expenses associated with disputes or probate court. Understanding the legal needs for each document help you establish the strongest chance your wishes will be followed.

Source:The Dallas Morning News, “Everyone needs an estate plan, regardless of wealth” Pamela Yip, May. 02, 2014

Reducing credit card debt in Texas can avoid future bankruptcy

Foreclosure

While the last ten years have proven to be an economic nightmare for homeowners and credit card users, the state of Texas, like most of the nation, is starting to spring forward in a slowly growing housing market. As the economy shows signs of recovery, many Americans are looking to invest in a home. There are many factors on the laundry list to consider, especially if children are in the picture. A good location, successful school district, the number of bedrooms one should have — these are all important. But one often-forgotten point involves debts incurred on credit cards.

According to a 2013 survey by the Consumer Federation of America, banks and lending institutions scrutinize credit scores when an applicant applies for a mortgage. It is not too soon to anticipate potential credit-score issues before you begin your housing-hunting adventure. There are ways to improve your credit.

The credit card reporting agencies are not infallible. They make mistakes. Request a copy of your credit score from all the agencies and go over it with a fine-tooth comb. Your lender may pull all three versions and study them.

Another common sense strategy is to reduce your credit card spending. Lenders will frown upon high debt-to-income ratios. Don’t spend more than you make. Especially during the loan application process, be prudent about posting charges to your cards. You can buy that boat after your house loan finalizes.

Another good tip is to stay well below your spending limit. Just because your Discover card has given you a $3,000 limit, you don’t have to use it. A guideline is to keep your amount under 30 percent of the allowed maximum.

Property is still affordable in Texas. A prospective homeowner should take the time to speak to someone who can explain what his or her scores really mean. Why they are low and what one can do to raise them may involve time and dedication. Legal and financial professionals can assist you as you contemplate entering a decision that will keep you on a steady path. It is a move that can affect the rest of your life.

For some, however, bankruptcy may be the best option, as it provides a fresh financial start. Many people have too much debt to overcome on their own, and bankruptcy may provide a needed solution.

Source:El Paso Online, “The do’s and don’ts, how to prime your credit score before you house hunt” No author given, May. 01, 2014

Know your rights: reverse mortgage, foreclosure, and inheritance

Foreclosure

Losing a parent can cause incredibly powerful, sometimes debilitating emotions. At the same time, you know that there are a lot of different things you have to take care of. Handling your parent’s estate is one of those things. Unfortunately, if your parent had a reverse mortgage, time might be working against you.

The reverse mortgage program allows people who are 62 and older to access the equity in their homes to make life easier for them as they age. Under the program, the person’s heirs are supposed to be able to settle the mortgage for a percentage of the current market value. Many heirs are discovering that not all reverse mortgage companies are adhering to that portion of the program. Others are discovering that the reverse mortgage is underwater.

Some heirs are reporting that reverse mortgage lenders are seeking a foreclosure on the home within weeks of the homeowner’s death. Sadly, not all heirs know their rights when it comes to reverse mortgages. In some cases, that lack of knowledge will lead to them losing the home their parent owned.

One important point for Texas residents to remember is that the reverse mortgage company has to give you up to 30 days to decide what you want to do with the home. If you want to keep it, you are allowed up to six months to find financing. Also, remember the 95 percent rule. Lenders have to allow you to buy the home back at 95 percent of the current market value. If you are dealing with a parent’s reverse mortgage and a potential foreclosure, getting answers to any questions you have and learning your rights might help you to keep the home.

Source:El Paso Southwest Senior, “Bitter inheritance” Jessica Silver-Greenberg, May. 01, 2014