Law Firm of Gregory A Ross, PC

August 21, 2012

Can You Change a Will Using a Power of Attorney?

The quick answer is no. A person that holds a Power of Attorney from you cannot change your Will for you. A Power of Attorney gives the person you choose the power to make financial, medical and legal decisions for you if you become incapacitated. However, your Power of Attorney cannot change your Will for you in any U.S. state, since all 50 states require you to have the mental capacity to make, change or revoke your Will.

Requirements for Changing a Will

All 50 U.S. states have the same basic requirements for changing a Will, either by making a new Will or attaching a Codicil. To change a Will, the testator (the person making or changing the Will) must be “of sound mind,” or capable of understanding what the Will does and what effect his changes will have. Although the testator does not have to be physically capable of writing the changes or of signing them, he/she does have to give the directions to someone else to do so. If a person the testator directs signs the Will on the testator’s behalf, the testator must be conscious and watching the other person sign.

How Power of Attorney Works

The powers granted by a Power of Attorney generally do not begin until the person for whom you have Power of Attorney is incapacitated. Since the testator of a Will must have the mental capacity to understand changes to his/her Will, the person with Power of Attorney cannot use that power to change the Will, since the Power of Attorney usually only has power if the testator is incapacitated. The person who has been granted Power of Attorney may help the testator change his Will while the testator is still of sound mind, but he/she may not use the Power of Attorney to change the Will without the testator’s express direction and consent.

Call us at 940-692-7800 with your questions about Powers of Attorney or Wills.

January 10, 2012

Top Ten Reasons to Update Your Will

Update WillIf you have a Will, be sure to keep it updated when there are important changes in your life. Your Will should not be stored away and forgotten. Take it out and review it at least annually to be sure that it still works properly, especially if things have changed in your life.

Here’s a list of the Top Ten Reasons you may need your Will updated:

  1. Marriage
  2. Divorce
  3. Birth of a Child
  4. Death of Someone Receiving Property Under the Will (a Beneficiary)
  5. Moving to a New State
  6. Receiving a Large Inheritance
  7. Your Named Executor Passes Away
  8. The Guardian for Your Minor Children Passes Away
  9. You No Longer Have a Good Relationship With Someone Named in Your Will
  10. You’ve Changed Your Mind About Who Should Receive Your Property

If any of these reasons apply to you, it’s important to see an attorney as soon as possible to get a new Will or a Codicil prepared. You’re probably wondering, “What’s a Codicil?” It’s a legal document that changes the terms of a Will. It’s similar to an amendment to a contract, but it must meet the same legal requirements of a Will in order to be valid. A Codicil is a good option if you only have a few changes to your Will. If there are a lot of changes, or if your life situation has changes significantly, it’s usually better to get a new Will.

If it’s been a while since your Will was done, give us a call at 940-692-7800 and we can work with you to determine if you need a new Will or a Codicil.

June 1, 2011

Federal Estate Tax

Filed under: Family Law,Financial Planning,Probate — Tags: , — gregoryrosspc @ 12:21 pm

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your “Gross Estate.” The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your “Taxable Estate.” These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2 percent of all Americans.

Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 – 2005; $2,000,000 in 2006 – 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent’s dying in 2010 or later (note: there are special rules for decedents dying in 2010.)

Exerpt from IRS article at: http://www.irs.gov/businesses/small/article/0,,id=164871,00.html

February 14, 2011

What is an Owelty Deed or Lien?

An owelty of partition is an instrument used to allow one co-owner of property to buy the interest of the other co-owners while using 100% of the interests as collateral for a loan to acquire the property.  Common examples are in the situation of divorces, probates and division of co-owned assets by people who are not partners.

In Texas there are limited ways to create an encumbrance (a lien or mortgage) against real property that is a person’s homestead.  The most common ways to create such an encumbrance are for purchase money loans, or for home improvements loans.  And while home equity loans are allowed in Texas, equity loans can be made only up to 80% of the value of the real property.  These restrictions come into play when a person tries to buy out a co-owner of real property, and finance that purchase through a Lender.  While a purchase money lien or mortgage would attach to the interest being purchased, it would not attach to the interest the person already owns.  Most lenders would not want to loan money and accept a mortgage against anything other than 100% of the property.

That is where the owelty deed or owelty lien comes into play.  In 1995, the Texas Constitution was amended to specifically designate an owelty of partition as one of the permitted encumbrances on a Texas homestead.  For an owelty of partition to properly be ordered, the owners must be co-tenants.  If the court vests title in one party and divests the other, they are no longer co-tenants and no owelty of partition can be ordered.  A court-imposed lien does not extend to the interest already owned by the acquiring party.  Only an owelty lien can reach that interest.

If you have any questions about owelty of partition, or jointly owned real property, call the Law Office of Gregory A. Ross, PC at 940-692-7800, or email us at info@gregoryrosspc.com

December 13, 2010

Do You Know the Difference Between an Heir and a Beneficiary?

Filed under: Probate — Tags: , , , , — gregoryrosspc @ 4:09 pm

The term heir is used within a last will and testament and trusts to designate family members entitled to inheritance property. When decedents do not execute a Will or transfer property to a trust their estate is deemed ‘intestate’ and must be settled according to state probate law.

Direct lineage heir refers to blood relatives such as parents, siblings, and children, as well as the decedent’s spouse. Heirs can also include cousins, aunts and uncles. Individuals who are not directly related to the decedent are referred to as beneficiaries.

Decedents can bequeath inheritance property to whomever they desire. If the estate is considered intestate, property normally transfers only to direct lineage heirs. If a Will or trust is in place, property is gifted according to directives provided in the document.

Heirs can be named as beneficiaries on bank accounts, life insurance policies, financial portfolios, retirement accounts, and certain types of titled property such as real estate. Although somewhat confusing, heirs can be beneficiaries, but beneficiaries are not always heirs.

The last will and testament is one of the most important elements of estate planning. Wills are used to bequeath property, appoint an estate administrator, establish guardianship for minor children, and provide directives regarding burial preferences. Wills are also an important element of establishing a trust. Without a Will, distribution of assets is determined by state probate law.

Unless a trust is established, all estates must undergo the probate process. Probate is required to settle outstanding debts, transfer property to heirs and beneficiaries, notify government entities regarding the decedent’s death, pay estate taxes, and file a final tax return.

Estates with a valid Will are referred to as ‘testate’ estates. Those without a Will are ‘intestate’ estates. Testate estates normally pass through probate more quickly than intestate estates. The time required to settle probate estates depends on the type of inheritance property involved, court caseload, and family dynamics.

If heirs agree to the terms of the Will, the probate process can usually be completed within a few months. The average time-frame to settle intestate estates is 6 to 9 months. If claims are submitted against the estate, probate can be prolonged for several months. When family members disagree over distribution of assets or if an heir contests the Will, probate can be suspended for a year or longer.

Wills can also be used to disinherit a direct lineage heir. While most people do not want to write a person out of their Will, there are instances that warrant this decision. It is best to work with a probate attorney to ensure the disinheritance clause is compliant with state law and to minimize the potential for the disinherited heir to contest the Will.

When a Will is contested, the probate process is prolonged as the court determines who is rightfully entitled to inheritance property. Contesting a Will can be very detrimental to the estate; particularly if estate value is less than $100,000.

Strategies exist which can minimize the time required to settle estates. It is best to work with a professional estate planner to ensure property is protected and to ease transfer of inheritance assets.

Beneficiaries can be assigned to checking and savings accounts by filling out ‘Payable on Death’ forms where funds are held. Account holders can bequeath funds to as many beneficiaries as they desire. Heirs cannot access bank accounts until they present the death certificate, photo I.D, and validated ‘date of death’ forms provided by the estate executor.

Beneficiaries can also be assigned to financial portfolios and retirement accounts by assigning ‘Transfer on Death’ beneficiaries. Heirs can elect to transfer accounts into their own name to avoid inheritance tax, or accept lump sum cash which may be subject to taxation.

Titled property can be gifted to heirs by assigning beneficiaries via the property title. Each state has different requirements for bequeathing titled property. Some require obtaining a joint title, while others allow designation of beneficiaries. To ensure property is distributed according to your wishes, consult with a probate lawyer or estate planner to determine proper protocol.

Engaging in estate planning is one of the greatest gifts anyone can leave their loved ones. It is important to update Wills when major changes occur. These might include opening or closing a business; buying or selling real estate; or when a designated heir dies or an heir is born.

September 12, 2010

Guardianships in Texas

Filed under: Probate — Tags: , — gregoryrosspc @ 12:53 pm

What is a guardianship?
Guardianship is a judicial proceeding in which a person or entity may be granted full or limited authority over an incapacitated person (ward) to promote and protect the well-being of the ward and/or the ward’s estate. The guardianship should be designed to encourage the development or maintenance of maximum self-reliance and independence of the ward by limiting the power or authority of the guardian based upon the person’s actual physical or mental limitations.

Note: Guardianship is a specialized area of practice; you are highly encouraged to speak with an experienced attorney about the requirements of appointing a guardian.

There are two types of guardianship- guardianship of the estate and guardianship of the person. The guardian of the estate is in charge of the ward’s property and finances. The guardian of the person is in charge of care and custody of the ward. Factors considered in the guardianship proceeding include 1) the extent of the ward’s diminished incapacity 2) the necessity of guardianship, and 3) the most appropriate person to be appointed guardian, with “the best interest of the ward” as the underlying guideline. If the potential ward is a child, incapacity is not an issue because it is automatic under the law. Incapacitation is the threshold issue in determining guardianship for an adult since guardianship is an extreme taking of the wards rights. Only if the ward is found to be incapacitated are the other issues considered.

What are the Alternatives to a guardianship?
There are several alternatives to help avoid guardianship. A durable power of attorney allows another to act as your agent in financial matters. A medical power of attorney allows another to act as your agent to make healthcare decisions. Directive to physician or “Living Will” directs your physician(s) how to act regarding “life-sustaining procedures” in the event of an incurable or irreversible condition. You may also appoint a person to make such decisions for you if the situation should arise. A surrogate decision maker is a person who may consent to medical care and treatment if a person to make decisions cannot be located. There are several trusts alternatives to avoid guardianship as well. A trust is the management of the individual’s assets by an individual or corporate trustee(s), with the highest duty of care to the beneficiary. A competent spouse has the right to manage, control, and dispose of the community estate as the community administrator to include that portion of the community estate that was under the sole management of the incapacitated spouse. A ward’s debtor can pay monies due the ward to the clerk of the court if $100,000.00 or less. When an individual’s only asset is a government benefit, then the person with custody or care of the proposed ward can file an application with the appropriate agency to be appointed representative payee. If the purpose of the guardianship is to convey title of property worth less than $100,000.00 the court can order a sale with the proceeds being placed in the court registry.

Who can be appointed as guardian?
Certain individuals have priority to serve as guardian by statute but any person who does not have an “adverse interest” to the proposed ward can file an application for guardianship and seek
appointment as guardian. The following people are ineligible to be appointed as guardian:
• a minor;
• persons who’s conduct is notoriously inappropriate;
• an incapacitated person;
• person who is a party or whose parent is a party to a lawsuit concerning or affecting the welfare of the proposed ward;
• a person indebted to the ward unless the person pays the debt before appointment;
• a person asserting s claim adverse to the ward or the ward’s property;
• a person who, because of inexperience, lack of education, or other good reason is incapable of properly and prudently managing and controlling the ward or the ward’s estate;
• a person, institution or corporation found unsuitable by the court; or
• a person disqualified in a declaration made by the ward prior to incapacity.

When appointing a guardian for a child “the best interest of the ward” must be considered. It is presumed not to be in the child’s best interest to appoint a guardian, if that person has been convicted of any sexual offense, sexual assault, aggravated assault, aggravated sexual assault, injury to a child, to an elderly individual, or to a disabled individual, abandoning or endangering a child, or incest.

What does a guardian do?
The guardian possesses and manages the ward’s property and manages the estate as a prudent person would manage his own property. The guardian has authority over the care and protection of the ward, but this authority is limited by the court to promote and protect the well being of the ward. A guardian is prohibited to act without court order, but there are few exceptions to this rule. He or she may act without court order to release a lien, vote stock, insure the estate against liability, insure property of the estate against fire, theft or other hazards, and pay taxes, court cost, and bonds.

Can a guardianship be created in a will?
A guardianship can be created in a will or written declaration of guardianship. If the guardian is appointed in a will, the will must meet the requirements of a valid will under Texas Law. If the guardian is appointed in a written declaration, it must be signed by the declarant or another person for the declarant under his direction and in his presence. The declaration must also be dated and witnessed by two or more credible witnesses 14 years of age or older. A “self-proving affidavit” can be attached to the will so long as it is signed by the declarant and the witnesses attest to the declarant’s competence, intent to create the declaration, and the execution of the declaration. If the declaration is handwritten then it must be entirely written in the declarant’s handwriting, but does not need to be witnessed. If the designated guardian is unavailable to serve, for any reason, the next designated alternate is appointed. The declaration and “self-proving affidavit” may be filed anytime after the application is filed and before a guardian is appointed.

Note: A declaration and affidavit in any form may be adequate to indicate your intention to designate a guardian.

What court can hear the guardianship and where should the guardianship be filed?
The county court of each county has the general jurisdiction of a probate court. In those counties in which there is no statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court, all applications, petitions, and motions regarding guardianships shall be filed and heard in the county court. In contested guardianship matters, the judge of the county court may on the judge’s own motion, or shall on the motion of any party to the proceeding, request the assignment of a statutory probate court judge to hear the contested portion of the proceeding, or transfer the contested portion of the proceeding to the district court, which may hear the transferred contested matter as if originally filed in the district court.

From the filing of the application until the guardianship is settled and closed, the administration is one proceeding for purposes of jurisdiction. The court has the power to adjudicate the rights to a given piece of property against all persons at anytime claiming an interest to that property in the guardianship or any other proceeding. The proper or a possible venue for the proceeding is dependent on the type of ward. If the ward is an incapacitated adult, venue is proper 1) where the ward is located, 2) where the ward resides when the application is filed, or 3) the county where the principal estate of the ward is located. If the ward is a minor child then venue is proper in the county where the parent or parents reside. If the parents are separated, venue is proper in the county of the parent who has greater period of physical possession.

Who participates in the proceeding?
In addition to the applicant and the ward, an attorney ad litem is appointed to represent the ward. The attorney ad litem represents and advocates on behalf of a proposed ward and has certain statutory duties. The attorney ad litem’s duties include: meeting the ward prior to any hearing to provide legal options, requesting medical history and records from the applicant’s attorney, reviewing the court file for proper service on the ward and third parties, and making sure the application has been sworn to by the applicant. An attorney ad litem can also serve as the guardian ad litem which represents the best interest of the ward. In some cases a Court investigator may be appointed to investigate the circumstances alleged in the application and makes an initial determination. A court investigator assesses the ward’s conditions at periodic intervals during the guardianship proceeding.

How does the guardian qualify?
The court appoints a guardian who must qualify as required by law. The court may also remove a guardian who fails to qualify. The guardian takes and files an oath of office to ensure that the guardian faithfully discharges the duties of the guardian of the ward, estate, or both. The court will set a bond, but a bond is not required for a corporate fiduciary. If a ward has named a guardian in his or her will, the will may direct that the named guardian to serve without bond. A bond cannot be waived for a guardianship of the estate.

What are Letters of guardianship?
Once appointed and qualified, a guardian obtains letters evidencing the appointment, qualification, date of qualification, and authority to act. The letters expire one year and 120 days
from the date of issuance, but may be renewed by an annual accounting approved by the court.

This is a brief overview of the legal system as it pertains to Guardianship and is not intended to replace legal advice from an attorney.

Contact us to discuss your guardianship questions.

Prepared as a Public Service by the
Texas Young Lawyers Association
and Distributed by the State Bar of Texas

August 20, 2010

Probate Attorneys

Filed under: Probate — Tags: , — gregoryrosspc @ 10:57 pm

Attorneys involved in the executing of the estate of a deceased person based on their will are known as probate attorneys. Probate law governs the process by which heirs, creditors, and courts are notified and validate the desires of the will of the deceased. Probate attorneys specialize in this field. Probate attorneys are divided into two classes: transaction lawyers and probate litigators.

Transaction lawyers are hired to help execute the estate of the deceased. This means the lawyer distributes property, funds, and other wishes as dictated in the will of the deceased. The lawyer will inform the heirs and family members of the estate of what they are to receive or to manage.

Probate litigators are brought in by the family members of the deceased to either dispute the appropriation of the estate or to clear up the wording of the will so that it is more comprehensible. These lawyers may also help family members file suit to become the executor of the estate, obtain property, or contest the decisions specified in the will.

A probate attorney can also be hired to help someone draft a will. In this capacity, the lawyer creates a legal document which will determine what properties are left to whom, who becomes the executor of the person’s estate, who becomes the parental guardian of the person’s children if younger than adult age, or other information to be relayed to family members after the person has died.

Call the Law Offices of Gregory A. Ross, PC, at 940-692-7800 if you have questions or are in need of a probate attorney.

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