All posts by James London

Estate planning: It doesn’t have to be complicated

Estate Planning

Planning your children’s inheritance doesn’t have to be complicated. Whether you live in Texas or another state, if you keep a few tips in mind when you go to see your attorney or estate planner, you can ease both your mind and your children’s.

First, you don’t want your children to have big surprises at your death — especially if those surprises are not going to be good. Communicate with your children about your estate and plans while you are still alive. You don’t have to give them the “down and dirty” details, but by giving them a ballpark estimate of your estate’s worth and your plans, you have set their expectations and relieved them of anxiety or possible disappointment after your death.

If you have multiple children, likely you care about all of them. Therefore, if at all possible, don’t play favorites in your estate planning. This will only cause bitter feelings between siblings when you and your spouse are both gone. If you have reason to divide your estate unequally, the best time to explain those reasons is while you still can.

If you are afraid that your children, or one of your children, is not capable of handling the money you want to pass on to them, you can set up a trust to distribute the money in intervals, or when you feel it would be the best time. For instance, if one of your children has a drug addiction, or is still very young, you could have the money held until they are stable or of a certain age.

If you are not going to play favorites when dividing your estate, don’t trust one sibling, such as the oldest, to be in charge of equally distributing your estate among all siblings. This might be especially true if you have step-children you want to receive an equal share or if all siblings do not get along. You can add multiple beneficiaries on insurance policies and the percentage they are to receive. Include all of your children as beneficiaries with equal shares and you can eliminate potential family disputes.

Source: AARP, “How to Leave an Inheritance to Your Kids” Oct. 02, 2014

Being a legal guardian is not an easy job

Guardianships

Guardians who are appointed to handle matters of an estate or life decisions for someone who is incapacitated have a lot on their plate. Often, individuals serving in guardianship capacities must make life-or-death or life-altering decisions for someone else. In some cases, guardians are in charge of financial resources for a person or estate. Any of those situations come with a great deal of responsibility.

Because of the level of responsibility and trust involved in a guardianship, no side should take the matter of appointing a guardian lightly. Individuals who are currently able to care for themselves may want to consider creating documents detailing guardianship wishes for the future. As it states on our guardianship page, if no guardian is appointed by estate documents, a family member or other interested party may seek to make themselves guardian should the situation demand it.

A person who is seeking to be made guardian or who is considering accepting a request to be a potential future guardian should understand all the requirements that come with that position. An experienced estate planning professional can walk individuals through the guardianship process on both sides, ensuring everyone is comfortable with future or current arrangements.

Other guardian matters that may involve legal attention include challenging a person who wants to be made guardian or challenging the fact that you need a guardian at all. Age should not be a factor when it comes to legal rights, which is why it’s important to understand estate planning options and how to legally protect your assets, life and wishes even during end-of-life years.

Can a Texas will be contested?

Heirs & Beneficiaries

We’ve all seen the television shows where an unknown heir comes forward to contest a will to claim millions from his or her long-lost relative. However, that really doesn’t happen very often. There are a few challenges to the validity of a will that are recognized in Texas, though. Consider the following:

Fraud: This can be difficult to prove. An heir or beneficiary who wants to contest a will on this point will need to prove that the author of the will signed it because he or she was tricked in some way. An example of fraud would be someone signing a will that he or she believed was another legal document.

Undue influence: This is another reason for contesting a will that can be difficult to prove. This is often used by those who are left out of a will and believe that someone pressured the decedent to change his or her will.

Lack of capacity: A will may be contested if it is believed that the author of the will was not mentally capable of understanding what he or she was creating and signing.

Improper execution: A court could throw a will out if it was not filed or executed properly.

Creating your last will and testament is an important step in the estate planning process. You want to preserve your legacy for your heirs, but you also don’t want to make a difficult time in their lives even more amplified by not having a legally-executable estate plan. The advice of an estate planning attorney can be very beneficial and ensure that your wishes are carried out after your death.

Source: AARP, “Where There’s a Will …” Sep. 24, 2014

Who has access to a person’s last will and testament?

Will Execution

Wealthy estates in Texas are often passed down from generation to generation. So how does it happen? With all family members gathered into the family lawyer’s conference room after the head of the family dies — where the attorney then reads the will aloud to the hopeful attendees like we see on television? Not really, or not as a general rule anyway. Wills do not have to be read aloud or with all parties present.

In normal circumstances, the attorney mails a copy of the will to the relevant parties, which is usually the executor of the will and the beneficiaries listed in the will. The executor of the will is the party that has been named by the deceased to be responsible for ensuring that his or her last will and testament is carried out.

What about disinherited heirs who may have been in a previous will? Do they get a copy? By law, a copy is not required to be sent to them; however, an attorney can send them a copy if they believe they will be challenging the will. This could speed up the probate process if the disinherited heirs make a decision to fight the new will. When a will goes into probate, it is made a public record anyway.

What about pour-over wills? A pour-over will is a will that declares that the estate goes to the living will at the time of death — where it will be disbursed by the trustee of the living will. In this case, if the executor of the estate and the trustee are the same person, a copy of the will is sent to the trustee and to the beneficiaries. If the executor of the estate and the trustee are different, a copy only needs to be sent to each of them.

Pour-over wills have pros and cons. A pour-over will, along with a living will, can keep the estate owner from having to put all of his or her assets into the living will while he or she is alive. On the other hand, the assets in the will may end up in probate, while the assets in the living will do not have to go to probate court. Also, wills become public records when they go to probate, and living trusts are private and are not made public.

Source: about money, “What Happens at the Reading of a Will?” Julie Garber, Sep. 17, 2014

Don’t go through foreclosure alone

Foreclosure

For El Paso families, a home is more than a financial investment. Homes are often imbued with memories and love, making it even harder to give up a home through the process of foreclosure. For many families, though, foreclosure seems like the only option when emergency bills or a loss of a job change income or expenses drastically.

Families who try to go through the foreclosure process on their own may overlook resources and help that could assist them in remaining in their home. Banks are not infallible, and mistakes in accounting do happen. Even in tough times, it could be possible to work with a bank to keep your home. Even if a lender is in the process of foreclosing on your home, it’s not too late. Our foreclosure page notes that defense options are available to homeowners in a variety of situations.

Before giving up, an experienced advocate can provide a number of options, including working to find alternative financing arrangements that works with a family’s budget while satisfying lender requirements. Legal assistance may involve reviewing mortgage records to ensure no errors were made as well as seeking options for loan modifications.

In some cases, saving the family home may not be possible. Simply turning everything over to a bank may not be the best course of action, though. A legal representative can help families work through short sale or foreclosure processes to ensure the best possible outcome from what may be an unpleasant task. Understanding your options and working to reduce the negative outcome of a foreclosure can help you move forward with a stronger future.

Source: The Law Offices of Victor H. Falvey, “El Paso Foreclosure Litigation Attorney” Sep. 12, 2014

Lack of regulatory guidance leads to pipeline real estate dispute

Real Estate Disputes

A property developer and a major energy company in Texas are continuing to quarrel over contentious hydrogen sulfide lines on a plot of land in Odessa. The developer and the energy company each contend that the other party is responsible for burying the flow lines that carry the poisonous gas through the plot of land. While the real estate dispute is continuing in court, local officials say that the health and welfare of area workers is being compromised because of the exposed lines.

The plot of land in question is located close to the Ector County Detention Center, and the plot is connected to three oil wells. Flow lines for the poisonous hydrogen sulfide gas are connected to these oil operations. Currently, the lines are exposed because there is no surface development on the plot. However, about 500 workers are now performing tasks on the land every day — and some of them are driving over the exposed lines.

The real estate dispute involves Devon Energy suing the purchaser of the land, who wants to create surface developments on the plot. The conflict apparently lies in a poorly defined segment of Texas regulatory law. The state does not dictate responsibility for burying the flow lines. Oil leases sometimes determine responsibility, but regulatory guidance on the issue is spotty, at best.

Official reports show that the landowner believes he is being bullied by the oil company. The cost of burying the lines would only be about $92,000 — and the energy company is proposing to pay half of that cost. Still, the landowner in the real estate dispute is refusing to pay because of principle.

Real estate disputes often occur because of a lack of regulatory guidance. In such cases, the parties must resolve the purchase disputes in civil court, sometimes involving government entities. Ultimately, the safety and health of residents and workers should motivate parties to reach resolutions in such controversial cases.

Source: OA Online, “Developer, oil company fight over H2S lines” Corey Paul, Sep. 07, 2014

WHAT DOES IT MEAN TO BE A LEGAL GUARDIAN?

Guardianships

Some states have conservatorships but in Texas, we have guardianships. The purpose of a guardian is to act on behalf of a person who is either a minor or who is incapacitated and unable to make decisions for themselves. The minor or incapacitated person is considered the ward, and the guardian for the ward is appointed by the court to care for him or her and related property.

A person is appointed as either a guardian of a person, or he or she may be appointed as a guardian of the estate of the person. It is possible that the court could appoint one person as both, or separate individuals could be appointed for each. In either case, the appointed guardian is required to post a bond in whatever amount the court sets to ensure the duties as a fiduciary are fulfilled.

A guardian of a person is usually responsible for the total care and protection of his or her ward, unless the court has defined restrictions. The guardian has the authority to consent to medical treatment as well as psychiatric treatment for the ward. The guardian is also responsible for the ward’s shelter, food and clothing as well as other needs.

A guardian of the estate for a minor or incapacitated person is responsible for the financial assets of the ward. The guardian must file inventory reports of all assets. In addition, the guardian must also file yearly statements of assets, finances and expenditures.

Per Texas laws, guardianship for an individual is appointed based on a priority list. For instance, if a minor is in need of a guardian, his or her parents would be the first choice, a person designated by the ward’s last surviving parent would be the second choice, then direct relatives and on down the line. The court also has the right to use discrimination and pass over those who they believe are ineligible, inexperienced or incapable.

Guardianships come with an enormous responsibility and can be very complicated. Legal assistance is required for the implementation of most guardianships.

Source: Texas Probate Web Site, “Frequently Asked Questions About Guardianship” Sep. 04, 2014

Daughter of late model loses in probate court

Estate Planning

What may go down in judicial history as the longest fight for an inheritance has finally come to an end in a Texas court.

A Texas judge has determined the daughter of the late centerfold /model/actress/movie star, Ana Nicole Smith, will not be the recipient of the tens of millions of dollars from the estate of E. Pierce Marshall. Smith was married to the son of the billionaire Texas oil baron for a short time.

A U.S. District judge recently determined that efforts by the child’s biological father’s legal advisors to impose sanctions against the billionaire’s estate have led nowhere.

After almost 20 years of litigation, the judge indicated he was one of the few trial observers still living, who had in addition witnessed the setting of a precedent in bankruptcy court. Advocates for the late actress and her child’s biological father could not prove the Marshall family had caused damages to award sanctions.

The story was sensationalized in the news following the death of the model due to an alleged drug overdose but also served to set a precedent in bankruptcy law.

In previous cases, bankruptcy courts had been omitted from issuing judgments of the magnitude of the Smith case. However, in 2000, a judge had awarded the late actress $475 million due to improprieties in the in the billionaire’s estate. This was later reduced to $90 million two years later.

This was later reversed since the Texas probate court’s decision took place prior to the bankruptcy case.

Legal advisors for the actress stated the billionaire’s estate got bogged down too long for sanctions to be effective. The judge stated too much time had elapsed to incorporate that argument successfully.

The billionaire’s estate has been mired in other legal woes, including the resolution of defamation of character, a long-running battle with the Internal Revenue Service and a spat with his own brother.

In the state of Texas, you have the right to marry a centerfold and leave all your money to her. But in most cases that unfold in the real world of probate court, it is in your best interests to get assistance in how to navigate the world of heirs, beneficiaries and estate planning so that after you pass into the next world, your wishes will be carried out the way you wanted them to.

Source: Forbes, “Anna Nicole Smith’s Daughter Loses Fight For Marshall Millions” Daniel Fisher, Aug. 19, 2014

Heirs to pancake guru file lawsuit claiming legal issues

Estate Administration

Being proud of grandma’s cooking is likely something many Texans can understand. Whether it’s biscuits and gravy, fluffy breakfast pancakes or spicy tamales, whatever your grandmother made better than anyone else was always a treat on the table. For one family, a great-grandmother’s pancake expertise went beyond the family table. According to a $2 billion lawsuit, that woman’s pancake recipes became a favorite at tables across the country in the last century.

The woman was Anna Short Harrington. Her heirs have filed a lawsuit stating that she was the inspiration for the Aunt Jemima brand. They further claim legal issues exist between the woman’s estate and both Quaker Oats and its parent company.

The lawsuit alleges that the companies participated in a conspiracy meant to keep royalty payments from Harrington and her estate. According to the family, Quaker said there were no records that Harrington every worked for them or that they had images on file of her. The lawsuit claims that Quaker deposited the woman’s image with the U.S. Trademark Office, however.

The family reportedly filed the lawsuit after obtaining a death certificate. The certificate allegedly named Quaker Oats as Harrington’s employer. In addition to using the woman’s image on packaging and in branding, the family alleges that the companies stole the woman’s pancake recipes for use in their mass-market products. They say the woman was never fairly compensated for this.

The suit is being filed as a class action. Harrington’s great-grandsons are reportedly bringing the action on behalf of her descendants, seeking what they believe to be fair royalty payments dating back to Harrington’s initial involvement with the companies.

Source: CNN Money, “‘Aunt Jemima’s’ heirs sue product makers for $2 billion” Patrick M. Sheridan, Aug. 11, 2014

Last will and testament holds up for Texas billionaire

Heirs & Beneficiaries

The reason for a last will and testament is obvious — to ensure that your fortune or assets go to the person or party you choose. After all, you probably worked hard for what you have, and it is your right to decide who gets it. But if it is not in writing, don’t expect someone’s word that you wanted them to have something to hold any weight.

After almost 20 years, J. Howard Marshall, a Texas billionaire, finally can rest in peace along with his last will and testament. Marshall died in 1995, but was well-known not only as a Texas oil tycoon, but for his marriage at the age of 89 to Anna Nicole Smith, who was only 26 at the time. His death occurred just a year after their marriage.

His estate at the time of his death was worth $1.6 billion. Marshall’s last will and testament left the entire estate to his son. Smith, whose real name after her marriage to Marshall, was Vickie Lynn Marshall, was left nothing, although during their short marriage, he had lavished her with gifts and money.

Smith challenged the validity of the will, saying that Marshall had vowed to leave her in access of $300 million. Even though a jury found Marshall’s will was written under no undue pressure and that he was mentally stable when he wrote his will, a legal battle ensued.

Anna Nicole Smith died in 2007 from an apparent drug overdose, and her estate continued to challenge Marshall’s will and to request a sanction on his estate, which now belonged to his son.

Monday, an Orange county judge finally laid the battle to rest. He denied the request to sanction Marshall’s estate, and claimed that this case had gone on far too long. At this point, Smith’s estate was attempting to obtain $44 million dollars from the Marshall estate. The last will and testament had served its purpose.

Just as important as it is to have a will drawn up so heirs or courts will not have a guessing game when it comes to distribution of your assets, it is just as important to update your will on a regular basis, especially when family members or beneficiaries may have changed.

Source: Texas Chronicle, “Anna Nicole Smith’s estate loses bid for millions” Aug. 19, 2014