All posts by James London

What are some basic will requirements in Texas?

Will Execution

The basic requirements that make a will valid in Texas are similar to what makes a will valid across the country. In fact, in most cases, a will is still valid even when a person moves states as long as the will execution is legal.

According to the Texas Estates Code, not everyone can execute — or legally sign — a will. A person must first be deemed of sound mind. Unless the person is married or serving in the armed forces, he or she must be 18 years old or older to execute a will.

The will must be signed by the person making the will or by a legal representative of that person. At the time the will is signed, at least two witnesses who are 14 years old or older and are considered credible must sign to indicate they witnessed the will’s execution. The witness requirement is waived if a person writes and signs an entire will in their own hand; this is known as a holographic will.

The Estates Code says that a will can include directions about how property will be distributed among heirs. It may also include a list of people to be disinherited; those people would not receive property under the will.

In some cases, individuals may create a self-proved will. Such a document is accompanied by an affidavit that attests to the validity of the will. Numerous options exist for completing a legal will, and drafting a will may not be the only thing a person can do to protect heirs and the estate. Understand all estate planning options and how those tools work together is the best way to ensure your wishes are carried out.

Source: Texas Estates Code, “Fundamental Requirements and Provisions Relating To Wills” Aug. 15, 2014

Texas real estate has a system in place to resolve disputes

Real Estate Disputes

In the state of Texas, people often have disputes over property. When a real estate transaction turns ugly, there are a series of steps for you to follow that can lead to the resolution. There are some details for you to be aware of in order to resolve any issues you might encounter.

Real estate transactions are usually monitored by a licensed realtor. This is generally someone who has undergone training and received a license after passing a comprehensive test. A real estate licensee is someone who is state-licensed to engage in the practice of real estate. Holding an agent’s or broker’s license does not make someone a realtor. The national, state or local associations issue licenses.

Working with a realtor during a transaction implies you have an informed person who assists in the process of transferring property. This person should be dedicated to professionalism and integrity. The difference between a licensee and a realtor is the latter is obliged to serve his or her clients in an ethical and dedicated manner.

Since the client is always a priority, when the code of ethics is violated, there are additional committees in Texas that can impose sanctions on a realtor. Depending on the severity of the violation, a letter may be dispensed or disciplinary action may be warranted.

There is a code of ethics that must be enforced so that if a member of the public or another individual feels they have been treated incorrectly, a complaint may be filed. The complaint can be anonymous or be addressed in court by the Texas Real Estate Commission.

Some real estate advisors will attempt to resolve the matters without court appearances. Communication and openness can solve misunderstandings, as well as a program that uses mediators to try to work out an amenable solution. Mediators do not provide solutions; they are part of a private conversation that attempts to offer unbiased alternatives or options to the clients.

If you have a real estate dispute in Texas, there are informed entities and agencies that can determine if something inappropriate or unprofessional has taken place. In order for your rights to be protected under the law, you deserve the highest quality of care to move forward in what could involve the biggest investment of your life.

Source: The Chronicle, “Realtor View: Learn how to file a complaint in real estat” Chaille Ralph, Aug. 01, 2014

Previous homeowner watches over her home in foreclosure

Foreclosure

El Paso residents with homes in foreclosure they want to keep should realize that they have options. To those who are unaware of the options available, seeking the advice of a real estate attorney is probably the first step. Remember that banks have as much to lose as you do when they foreclose on a home. They may be willing to work with you on a loan modification. As a last result, filing for bankruptcy may also help to save your home. If you really love your home and want to keep it, don’t be willing just to give up and walk away. A home is more than just a building; it is often the repository of precious memories and security to a family.

One Plano woman who had lived in her home for 16 years apparently could not prevent a foreclosure. In the process of losing her home to the bank, but because of her sentimental ties, the former homeowner continued to keep an eye on the house. The woman claims that her father died in the home and her son was raised there, so it meant a lot to her.

In July, her previous neighbors began contacting her about activity at the house. They had allegedly been looking after it as well. One man reported seeing a truck back up to the house, and two people taking furniture into the home.

The home’s former owner contacted the bank to see if the house had already been sold, but she was told that it was slated for auction in August. The woman also saw her house listed on a website with a nonworking number and her name as the contact. This led her to the possibility that someone may have thought they owned the home through a possible scam.

The strangers were said to have stayed at the house for up to a week, and then the former owner put a note on the front door informing them that they were trespassing by occupying the home. She later found the note wadded up in the kitchen. The occupants left, but not before flooding the home, taking out the carpet and leaving holes in the walls. This situation is being investigated for a possible fraud attempt.

Source: KHOU.com, “Plano woman fighting to keep squatters, scammers out of foreclosed home” Jobin Panicker, Aug. 06, 2014

Document your estate plan for family members or heirs

Heirs & Beneficiaries

For families in Texas — or anywhere in the country — things like funeral arrangements, wills or asset distribution upon a loved one’s death aren’t popular dinner-table topics. While such things can be difficult to talk about, you don’t have to leave family members or heirs in the dark. Taking time to document an estate plan now can lessen frustrations down the road.

Consider creating a file with all estate-related documents enclosed to make it easier on loved ones. Store the file at home, in a safe-deposit box, with an attorney or other estate professional or as a virtual copy on the computer or cloud.

Perhaps obviously, one of the first documents to include in your file is a will. Copies of other legal documents, such as trusts, power of attorney or health-related forms should also be included. Some of these documents would be used by family members prior to your death should you be unable to make financial or health decisions on your own.

In addition to specific estate documents, consider including copies of life insurance plans in the file. You might also provide a list of all financial accounts along with some instruction on how the executor of your estate would access those accounts. It’s probably a good idea not to keep a list of passwords in the same file, as that could pose a security risk.

Finally, include any other documents relevant to survivor benefits. This might include pension plans, investment accounts or any account that pays a beneficiary upon your death. Creating a comprehensive record of your assets, along with your wishes for those assets, helps alleviate probate issues for loved ones in the future.

Source: Time, “Want Less Stress? Get Your Estate Plan In Order” Beth Pinsker, Jul. 15, 2014

Texas inheritance tips to avoid potential problems

Estate Planning

For many Texans, inheriting money from a family member’s estate may contain some unexpected consequences. Your elderly rich aunt may have left you a portion of her assets, but be prepared to deal with envious family members who may descend upon her belongings like vultures on a carcass.

Designated beneficiaries can react like children in a candy store. They might overspend on luxury items and have regrets later, inciting even more family hostility.

Experts agree the best way to handle division of assets is to plan ahead. A benefactor can do a lot of good by anticipating inheritance issues before they can begin to cause problems. It is a good idea to set up trusts instead of specifying large amounts of money to be distributed. An astute benefactor will also consider leaving behind clear instructions for beneficiaries. An estate plan should be updated regularly, especially after a birth, marriage, divorce or death.

One way to avoid potential problems later is to educate the beneficiary on the value of the money left behind. It is not always a good idea to get that dream car or boat. People may not think of how much it will cost to maintain such a costly item. Beneficiaries need to understand their purchases may be squandering the hard-earned life savings of a family member. Relatives may become territorial when items of sentimental value come into question.

Research indicates some people who suddenly find themselves with extra money can end up frittering it away in Las Vegas. Vast quantities of money can disappear quickly in gambling spots, making it is advisable to express prudent judgment when awarded an inheritance.

Blended families can also intensify the risks. As family disputes develop over who gets what, animosity brews that can sever family ties.

It’s better to be practical and seek the assistance of a professional who can help guide you in managing your finances. You can learn to be prudent with your new money, as well as benefit from good advice and suggestions on ways to make your good fortunate work with you and not against you.

Source: U.S. News & World Report, “5 Inheritance Mistakes for Heirs to Avoid” Susan Johnston, Jul. 15, 2014

In your last will and testament, consider your heirs

Heirs & Beneficiaries

Texans who are getting ready to do some estate planning, such as having a last will and testament drawn up, may want to consider their heirs. You probably already know who your heirs will be, but by “consider your heirs,” we mean consider their personalities — their strong points and their weak points.

This way, as you plan your last will and testament, you can set your heirs to be winners and not losers. You don’t want to see the inheritance you have built through hard work squandered away, do you? Unfortunately, depending on who your heirs are, that could be just what happens.

There are some common mistakes that heirs make when they receive an inheritance. The most common is careless spending. People who have had little money for most of their life are inexperienced with how to make a windfall of money last and work for them. They buy large items, such as houses, cars or boats. However, as time moves on and the money is gone, they haven’t planned for how they were going to support those assets.

Another common mistake that heirs make is letting an inheritance — theirs or someone else’s — cause problems between them and their families. Inheritances can cause jealousy when everyone doesn’t get the same. It often harbors feelings of “they don’t deserve it.”

Finally, new heirs will probably need some advice from someone who can direct them on what to do with their inheritance. Many heirs just think it is their money now, and they can make their own decisions.

To avoid these problems, do some thorough estate planning with your attorney. When deciding who gets what, know and consider your heirs. Put safeguards in place, such a trust. It may be time-consuming, but it will make a great deal of difference for those you love.

Source: U.S. News and World Report, “5 Inheritance Mistakes for Heirs to Avoid” Susan Johnston, Jul. 15, 2014

Consumer protection rule could impact an estate plan

Estate Planning

Many times, financial rules are implemented by banks and government agencies for the purpose of protecting consumers or businesses. Sometimes, those rules can eventually have unintended negative consequences for a subset of consumers that were not taken into consideration when the rule was being written. Some Texas residents may have experienced such consequences following a Consumer Financial Protection Bureau ruling in January.

The January rule, known as the Ability to Repay rule, required banks to consider a person’s ability to repay any loan prior to giving that person a mortgage. The rule was meant to protect consumers from being trapped in mortgage arrangements that would be impossible for them to be successful in. However, in some cases, the rule was applied to heirs who were inheriting a mortgaged property.

Under the Ability to Repay rule, banks were unable to grant some heirs mortgages. That resulted in some families losing homes due to legalities, even when estate planning documents called for heirs to take ownership of properties. It’s possible there were even cases where family members, such as children or spouses, were already living in the homes when the homes were lost.

The Consumer Financial Protection Bureau issued a new interpretation of the January rule in July. The new interpretation is aimed at giving families a better chance of creating arrangements that let them maintain property ownership in keeping with a loved one’s wishes. The new rule interpretation doesn’t mean loved ones are automatically granted a mortgage or mortgage transfer, but it does remove the strict requirement regarding ability to repay.

Planning ahead for situations such as a mortgage transfer is the best way to ensure heirs are able to follow through with transferring property. Working with heirs within legal processes ahead of time reduces the chance anyone will be hit with sudden financial crises following the death of a family member.

Source: Consumerist, “CFPB Clarifies Rule That Could Cause Heirs To Lose Their Homes” Ashlee Kieler, Jul. 08, 2014

Texans would be wise to plan for family’s future with a will

Will Execution

They say the only two certainties in life are death and taxes. Texas is one state replete with complications that can occur involving the tax implications of a death.

Consider the case of an elderly mother who wanted to provide for her children after death. Her estate was to be distributed in equal amounts to all her children, but questions arose among the siblings regarding the high costs of legal fees to advisers, as well as a potentially large part of her estate to be taxed.

The woman’s children had estimated her liquid assets to be about $300,000 and her home at around $90,000. Taxation guidelines can be tricky, so determining what will be taxed and how her property will be distributed are best resolved sooner than later. The proposed heirs would be wise to consult with a financial planner specializing in wills, guardianships and beneficiary issues. Frequently, estate advisors are able to provide valuable input.

Unless a person already used up a lifetime cap of exorbitant gift giving, in the state of Texas, an estate valued under $5,340,000 would fall under a gift tax exclusion for each individual in question. This mother’s asset value would not be taxed under federal law. Anyone inheriting assets under that amount would not be subject to assessment on gifts or an estate.

Another piece of good news is that Texas probate is not as expensive a process as it is in other states. The issues would be slightly more complicated if the principal held properties in various states and resided in another.

It is always a good idea to confer with a professional who is dedicated to keeping up with ever-changing estate planning laws so that a love one’s final wishes regarding guardianship, heirs, beneficiaries, distribution of assets and power of attorney can be clearly spelled out in a last will and testament. This is especially crucial if the person becomes incapacitated. Medical directives to physicians and family members may be unpleasant topics, but discussing issues now will deters family squabbles later. For this reason, the mother and children in this case should turn to a reliable source to provide unbiased information to secure the future of her beneficiaries.

Source: The Dallas Morning News, “Minimize Taxes Upon Death” Trudy Turner, Jul. 10, 2014

Elder Law Caveats for durable power of attorney

Estate Administration

Most people these days are living longer and prosperous lives. Advances in health and technology provide more information designed to keep us healthy. Regardless, after we reach a certain age, we need to consider what will happen to our assets after we pass on.

One case involved an older gentleman who had followed all the necessary steps to probate his wife’s will upon her death. The question arose about where to keep this valuable document for safekeeping. When the man designated his son as the executor of his will, he was advised to assign his son durable power of attorney. Legal documents vary and require different processes.

Most financial institutions will ask for an original durable power of attorney when the designee seeks to carry out a task. It is critical that the institution see the original, or the act will be rejected. A photocopy is not acceptable, and the final wishes of the deceased cannot be carried out.

For a while, this was not the case in Texas. From 1989 to 1992, durable power of attorney had to be filed with the county clerk. This was later changed for real estate transactions and to coincide for increased lifespans. Upon filing, the maker needs to be proactive in keeping track of his documents, also informing his agent as to their whereabouts and status. Of equal importance is the protection of the last will and testament. The original needs to be kept under lock and key for safekeeping in case it needs to be present in court. A will should not be filed with the county clerk, as it lends itself to an invasion of privacy. Experts also recommend an individual assign a medical power of attorney and directive to physicians. Photocopies are acceptable for this, but originals should be kept in a safe place.

If you have an elderly member of your family who is considering how to carry out his or her final wishes, it is advisable to investigate how the state of Texas views probate, last wills, and durable power of attorney. If your loved one becomes too ill or disabled to care for him or herself, his final wishes may never be carried out. Duties of ownership and assets should be reviewed by a trusted person who can help your loved one be laid to rest in peace, providing for heirs and beneficiaries as desired.

Source: Source: “File your Durable Power of Attorney with the County Clerk,” Paul Premack, July 7, 2014

Heirs may feel effect of property tax cut in Texas

Heirs & Beneficiaries

If you are an heir or beneficiary of a property owner in Texas, you may not be happy about the possible news of tax relief in the upcoming year.

Political pundits and lawmakers have been tossing around the idea for a while now, having been exacerbated by primary elections and runoffs. One candidate for governor promised to cut Texas property taxes and emphasized the cuts would be particularly beneficial for older voters. The litany has continued on his social media site.

The liberals and independents in the Lone Star State might be happy to hear the potential cuts. While the state property taxes are levied by the local governments, lawmakers have little power to change the rates doled out to unhappy homeowners. The news is not all bad, however, given that the state can prevail over allowing provisions for citizens over 65 as well as for farms.

While the law says some older homeowners are eligible for a freeze in taxes, they can also reduce or eliminate them in favor of liens payable after their deaths. This is not appealing for heirs and beneficiaries but helps older voters to continue to survive financially and keep their homes.

Implicit in state control is the financial repercussions trickling down to school districts and city municipalities that would have to scramble to get funding in other areas. If legal provisions allow for freezing appraisals and tax bills, exemptions could be extended to younger homeowners, who might find the new guidelines unfair and prejudiced according to age.

In Texas, as in other states, it is all about revenue. To keep funds flowing, local governments would have to penalize those not eligible for exemptions. Beneficiaries and heirs to property owners will be affected by this situation. To protect yourself and your financial future, you should contact a legal professional who can assist you in understanding your rights as a beneficiary or heir, and what tax implications might be upon the death of a loved one who has designated you in his or her will.

Source: ;The Texas Tribune, “Analysis: Finding Property Tax Cuts That Taxpayers Feel“, June 27, 2014