Frequently Asked Questions

This is a concern for everyone. Immediately after a death there seems to be so much to do. The legal process can seem overwhelming, but it need not be.

One thing you may need to focus on right away is the funeral or other arrangements. It must be planned and paid for, or at least a plan needs to be made for payment. You should look through all the available records to see if there was a prepaid funeral contract. This may be kept with or near a will or estate planning file. The deceased may even have left instructions about what kind of funeral or other service he or she might want. You should look for this information. Texas law gives a priority to claims for funerals, so if you or someone else has to pay for the funeral, you should keep receipts of your expenditures and plan on presenting a claim to be reimbursed.

You should tell the employer and find out if there are any death benefits connected with his or her employment. Talk to the human resources or personnel department if there is one. You should also notify the Social Security Administration if the deceased was receiving Social Security. The Social Security Administration website includes an office locator to help you find the number of your local office.

You should look for the deceased's will, which probably says “Will” or "Last Will and Testament" at the top. If it is not easily found, consider contacting the deceased’s attorney, if he or she had one. Make sure to look in the safety deposit box if you have access to it and cannot find the will anyplace else. There's plenty of time to probate the will (see below), so your search for the will does not need to be rushed or panicked, but it is a good idea to locate and secure the will when the opportunity is available. If you can't find the original will but think the deceased had one, contact your attorney for advice.

When you find the will, you should consider making an appointment with an attorney who is qualified and experienced in probate law. Even with a well-drafted will there are options that an experienced lawyer can help you sort through. You may want to work with the attorney who drafted the will, if the attorney is available, but you are not required to use the attorney who drafted the will. You may want to use your own attorney or ask your attorney for a reference. If you do not have an attorney, ask friends or other professionals, like financial planners, CPAs, etc., for a referral. Many firms, like Karisch Jonas Law, work exclusively in probate and estate planning and may be able to answer your questions quickly and efficiently. If you don't have any personal references to go on, consider retaining an attorney who is certified in estate planning and probate law by the Texas Board of Legal Specialization. There are many good lawyers who are not board certified, but this is one way to assure that the attorney you choose has worked in the area for several years and has passed an exam on the subject. You can find a list of board certified attorneys in your area by visiting the Texas Board of Legal Specialization website and selecting “Estate Planning and Probate Law” as the specialty area.

Whether or not you need to probate depends on the nature of the assets and how they are titled (in whose name are they held). Your attorney can help answer this question. There may be shortcut methods to avoid a complete administration if appropriate in your case.

n general, the will must be submitted for probate within four years of the date of death. If more than four years have passed since the date of death, it may still be possible to probate the will, but a more complicated procedure is required. Ask your attorney for more information about this. Sometimes people think that because they have access to all the bank accounts, it is not necessary to probate the will. This can cause serious problems. For example, problems may arise later, when the family decides to sell real estate owned by the decedent. If you think it is not necessary in your case to probate the will, you should be sure to discuss this with an attorney before allowing the four-year period for probate to lapse.

The attorney will need to have the original will and a certified copy of the death certificate. If you are anxious to begin the probate process and the death certificate is not yet available, you can start the probate process without the death certificate and file it later. The attorney eventually will need a list of all assets belonging to the deceased, valued as of the date of death. This will include bank accounts with the balance as of the date of death and investments and IRA’s and insurance, no matter who it may be payable to. It will also include all real estate owned by the decedent, whether alone or jointly with another person. The attorney will need this information to determine if the estate is subject to estate tax. In 2023 if the deceased owns assets, including insurance, retirement benefits, real estate, and all other types of property that are valued in total at more than $12.92 million, then the estate may be subject to estate tax (the estate tax exemption amount changes annually, so you should check this amount with your attorney or CPA). Even if the estate is less than this amount, the attorney will still need a list of assets and their date of death value in order to prepare an inventory of the estate. The inventory (or an affidavit in lieu of inventory) is filed with the probate court after the will is probated. The inventory is important to the beneficiaries because it can determine their tax basis in the assets they receive.

In most cases, the bank or brokerage firm will allow a co-signer on accounts to access funds after the death of one of the co-signers. However, not all accounts with two co-signers automatically belong to the surviving co-signer. Who owns the property in these types of accounts is a complicated subject. (Glenn Karisch has written a paper for lawyers on this subject. To see the paper, click here.) Also, if the estate is large, there may be serious tax questions that need to be addressed before the funds are accessed. Therefore, it is a good idea to consult an attorney before using funds from these accounts for personal purposes, and it is important to keep good records of how these funds are spent.

What needs to be done will depend on the nature of the assets. Sometimes a full court procedure, called a "Determination of Heirship," is necessary. In other cases, a less complicated approach, such as an affidavit of heirship or small estate affidavit, can be used. The difference and complexity of each of these processes can be explained by your attorney.

It can take as little as two weeks to have a will admitted to probate. After that it is a matter of collecting the assets, paying the debts, and distributing the remaining property to the beneficiaries named in the will. A final tax return will need to be filed when due and any taxes paid. Generally, if no estate taxes are due, most of what needs to be done can be completed within about 3 to 6 months, depending on the complexity of the assets. This does not mean that access to all funds is frozen until the whole process is completed; in most cases once an executor or administrator is appointed, that person is able to access funds and use them as appropriate.

Tell them your loved one is dead and that they will need to wait until an administrator or executor is appointed. Do not agree to anything or sign anything with the creditor until you have discussed it with an attorney. Many credit card companies attempt to have the surviving spouse or children agree to take over the card (making it sound like they are doing the spouse a favor), and this often is a bad idea. Texas law provides protection and benefits for surviving spouses and children. You should discuss these with your attorney.

You should locate the policy, determine that you are the named beneficiary, obtain a certified copy of the death certificate, and then contact the insurance company to request a claim form. The company may offer assistance if you have questions about how to fill it out, or you can ask your attorney. If you cannot locate a policy, check the bank statements to see if premiums are being automatically withdrawn or checks have been written to an insurance company. If you know one exists but still cannot find the policy, contact the insurance company and explain the situation to them. If they still are not helpful, discuss it with your attorney. Before cashing in the policy, be sure to discuss it with your attorney. In some cases another course of action makes sense. For example, it may make sense for tax or creditor protection reasons to disclaim the insurance proceeds. In most cases, a disclaimer can't be used if the policy already is cashed in. So, it is a good idea to discuss the insurance with your attorney before cashing it in.

Reach out to us by submitting a request here, by phone at (512) 328-6346, or by email at info@texasprobate.com to discuss how we may be able to help.

You need to understand the importance of your job as independent executor and the duties and powers that you have as independent executor. You should ask an attorney about what is involved before agreeing to serve as independent executor. You have the choice to decline to serve as independent executor, and in some cases it may be beneficial for you to decline.

A fiduciary is a person having a legal duty to act primarily for the benefit of another. When you are acting as independent executor, you are acting primarily for the beneficiaries of the estate, and you have legal, fiduciary duties to act for their benefit in managing and administering the estate. The law requires a high standard of ethical and moral conduct of fiduciaries. There are many specific duties, some of what are imposed by statute, some by case law, and some by the will itself. It is important that you understand these duties. Ask your attorney to explain the duties applicable to you.

Probably not. Most courts will not allow a person to act in a fiduciary capacity without an attorney. Even if the court allows you to do so, it is a bad idea, since doing a bad job as an independent executor can result in lots of liability.

Once the order appointing you as independent executor is signed by the judge, you must then “qualify” as independent executor in order to receive Letters Testamentary. To qualify as independent executor and receive Letters Testamentary, you must take an oath and file the oath with the court. If a bond was required in the order admitting the will to probate and appointing you independent executor, you must also pay the bond premium and file the bond with the court. (Most wills waive the bond requirement for independent executors, meaning you would not need to obtain a bond.) When you have taken the oath and paid and filed the bond (if one is required), then you are qualified and you may receive Letters Testamentary.

Letters Testamentary are your proof that you are the person designated and authorized to act on behalf of the estate. You will need to present Letters Testamentary to persons holding the assets of the estate so that they know you are the representative for the estate and that you are entitled to take possession of the estate assets. Banks, brokerage firms, title companies, and insurance companies are the types of entities that may request Letters Testamentary.

No. You have a duty to keep estate assets segregated from your personal assets. Therefore, you should never put estate property in your personal bank account and you should never commingle estate assets with your own personal assets. Even though you and your siblings are the only beneficiaries, you should play it safe and keep estate property separate. You should seek the assistance of an attorney if you have questions about this.

Typically, an independent executor may use estate funds to pay funeral expenses and expenses of last illness, and may even sell estate property in order to pay funeral costs and expenses of last illness. However, before paying bills from the estate, you should discuss this with your attorney.

Generally, an independent executor may sell estate property (real or personal) if funds are needed to pay expenses of administration, funeral expenses, expenses of last illness, and to satisfy claims against the estate. If the real property is not being sold for one of these purposes, the independent executor must have express authority in the will (in other words, the will must specifically state that the independent executor has the power to sell estate property) in order for the independent to have authority to sell the property. Most well-drafted wills contain this power, but many wills do not, and this can be a trap for the unwary independent executor. You should consult your attorney before selling real estate.

An Inventory, Appraisement and List of Claims is a document which lists the assets in the estate, the value of each asset as of the decedent’s date of death, and a list of all claims due and owing to the estate. The Inventory, Appraisement and List of Claims is often referred to simply as “the inventory.” The inventory must be filed within ninety days of your appointment as independent executor, unless the court grants an extension of time in which to file the inventory. If you need an extension of time to file the inventory, you must file a request with the court. The inventory has specific statutory requirements, and you should seek the assistance of an attorney in preparing and filing the inventory. In appropriate cases, you may be able to provide a copy of the inventory to each of the beneficiaries, and then file an “Affidavit in Lieu of Inventory” with the clerk.

You are required to publish a notice to creditors in a newspaper printed in the county where the Letters Testamentary were issued. The notice must state that all persons having a claim against the estate being administered must present such claim or claims within a particular amount of time prescribed by law. This notice must be published one time and proof of the notice must be provided through an affidavit of the publisher. This notice to creditors must be filed with the court within one month after receiving Letters Testamentary. You also must give notice to all known secured creditors. This notice must be given within two months after receiving Letters Testamentary. You may, but are not required to give notice to unsecured creditors. Even though this notice is not required, it is sometimes a good idea. Because these notices to creditors have very specific requirements, you should seek the assistance of an attorney in preparing and sending these notices.

First, you should contact an insurance company that writes bonds. You will need to fill out a bond application with the insurance company. When the application is approved, you must pay the premium and file the bond with the Court. If you have difficulty finding an insurance company that writes bonds or if you have difficulty obtaining approval for your bond, you should seek assistance. If a bond is required, it must be filed within twenty days of the date of the order granting Letters Testamentary. You will not qualify as independent executor until you pay the bond premium and file the bond, and Letters Testamentary will not be issued to you until the bond is filed. (Most wills waive the bond requirement for independent executors. Even if the will does not waive the requirement, you may be able to get the court to waive the requirement. Ask your attorney about this.)

If you believe that the estate exceeds the amount a person can pass tax-free at death (that amount depends on the year in which the decedent died; in 2023 the amount is $12.92 million), you should seek the assistance of a tax professional to advise you. Your attorney can help you with this. Generally, if the value of the assets in the estate exceed the amount a person can pass tax-free at death, the independent executor must prepare and file a federal estate tax return and a state inheritance tax return and, if taxes are due, pay the tax. This is a complicated process and you should seek the help of a tax professional to assist you with this.

When you are ready to distribute the estate assets, you should review the will again carefully and distribute the assets as directed in the will. Again, your attorney can assist you with this process.

Reach out to us by submitting a request here, by phone at (512) 328-6346, or by email at info@texasprobate.com to discuss how we may be able to help.

Getting a will or living trust to meet your needs doesn't have to be complicated. There are things you can do before meeting with the lawyer that can help move the estate planning process along.

First, you need to think about why you are going. For most people, this will be to have your will drawn and to get related documents such as powers of attorney. Think about the purpose of the will -- it determines who will get your assets at your death. Therefore, the attorney will need to know what your assets are and who you want to leave them to. These are the two broad categories, and there are details in each that need to be shared with the attorney. So you need to be prepared to tell your attorney whom you wish to receive your assets and what those assets might be. You should also think about who you would want to put in charge of your care if you become incapacitated during your lifetime: your legal/financial agent, medical agent, and guardian.

You do not have to leave anyone anything, not even a dollar. It is best to acknowledge in a will that you are married and have children, or siblings, etc., but then you may proceed to leave all assets to whomever you wish. However, it will be important to talk with your attorney about the reasons you are disinheriting your family members so that he or she may be able to take special steps to avoid a potential will contest. If you are married, you should also talk with your attorney about the way community property laws may impact your preferred property disposition.

Yes, it is very important to discuss with your attorney any special needs your beneficiaries may have. Some clients have children with alcohol or drug problems, potentially divorcing spouses, or general creditor problems. Often our clients want to protect their child’s inheritance from being wasted by either the child himself or by grasping creditors or divorcing spouses. There are ways within a will or trust that the estate planning attorney can provide for these special needs so by all means discuss this openly with your attorney. Of course some children with mental or physical disabilities have their own special needs. This usually requires specialized planning and an attorney experienced in this area can help tremendously.

The attorney needs to know the general nature and extent of your assets. He or she probably does not need to know which stocks you own, just that you own stocks and bonds, real estate, or property of whatever type, and a general idea of their worth. It will be important to tell the attorney how your assets are held. For example, is your account at a brokerage firm in joint ownership with right of survivorship with your spouse or another person, or is it held as tenants in common? For assets and accounts with beneficiary designations, like IRAs, annuities, and insurance, you need to know the currently named beneficiaries. It is especially important to tell your attorney which of your assets are in qualified retirement plans, such as IRAs or 401ks. Click here to download a copy of the estate planning questionnaire that we ask potential clients to complete.

No, at least not to the initial meeting. You need to tell your attorney what real estate you own and where it is located. If the real estate is located outside Texas, be sure to mention this to the attorney. Also tell the attorney who the record owner is. For example, if it is your house, you and your spouse are probably on the deed as record owners, but if you inherited 20 acres from your mother, the property is likely to be in your name alone. This is important for the attorney to know.

No, this usually is not necessary. However if you have specific items of property that are unusually expensive, such as jewelry, art, or antiques, you should bring this to the attention of the attorney. What is "expensive" in this case varies with the size of your estate. In general, if you could sell the item for $5,000 or more, then you probably should mention it. You may have paid more than $5,000 for many items in your home, but if you try to sell them, they may be worth much less. This is different from the value used to insure the items. Usually you insure an item for its replacement value, not for the value at which it could be sold by you. Whenever there is a question, mention it to your attorney who can then advise you.

Yes. Of course in this economy it is expected that values will be fluctuating a lot. Therefore an exact value of your investment portfolio is not necessary. Approximate values are satisfactory. You should be able to tell what you normally keep in your cash accounts. You probably will not have to provide your bank account numbers or investment account numbers, so do not spend time writing all these down.

For estate planning purposes, the attorney will need a “ballpark” value for your real estate, whether it is your house, residential rental property, or raw acreage. You can provide what your county ad valorem tax appraisal says or what you think the property might sell for, if you have an idea. Usually this is all that is needed for planning purposes.

Not necessarily, although you should be thinking about this. The attorney can give you good advice in selecting appropriate persons or entities to do these jobs. You may name multiple executors and trustees (for example, you may name all of your adult children to serve as co-executors or co-trustees), but this isn't always the best idea. The persons you name do not need to be related to you. A family friend, a bank, or another professional corporate fiduciary might be appropriate, with or without a family member serving as co-trustee. All of these are options. The right answer for you will depend on the dynamics unique to your family. The attorney can explain the pros and cons of the different kinds of designations and help you think about what will work for your family.

No. Usually this is a legal question that an attorney can help you determine. The attorney will need you to provide information. For example, was the asset earned during your marriage (community property) or was it received by gift or inheritance by one spouse (separate property)? Sometimes it is harder to tell, such as a retirement account that one spouse owned prior to marriage but which was added to during marriage. Some assets started out separate and become all or part community, like an investment account owned prior to marriage with interest and dividends reinvested after marriage. In Texas, income from separate property earned during marriage is community property, and this can confuse the issue. In many cases, the separate or community character of assets is not important to the estate planning process. The attorney will help you decide how important these designations are in preparing your estate plan.

Some estate planning lawyers prefer that the client complete an estate planning questionnaire before the initial visit, while others do not. A financial statement has some but not all information needed. At Karisch Jonas Law, we request that our potential clients complete an estate planning questionnaire to provide us with information, but its use is not required. Many of our clients find that the form helps them start thinking about the issues which are likely to come up during the estate planning consultation. Click here to download our estate planning questionnaire This form should be helpful whether you use an attorney in our firm or any other firm.

This is a hard question but one you should discuss with the lawyer at or before the initial meeting. Often people call us and ask what their estate plan will cost. This is like calling a doctor and saying you have a stomach ache but you want to know what it will cost before you come to see him or her. The cost depends on the problem. This is the same in an estate plan. The cost usually will depend on the complexity of the documents you need. The complexity depends on the nature of your family or other beneficiaries, your assets, and your wishes for how property should be handled. However, you should ask whether the attorney bills by the hour or charges a flat rate for wills of a certain category. You can ask for “ballpark” amounts to give you some idea of the cost. You can ask if the initial meeting is free. Never hesitate to ask about fees up front. If an attorney refuses to discuss fees, find another attorney. You have a right to a written fee agreement before you retain the attorney to prepare your documents. You should expect to pay a retainer, which will be some or all of the anticipated fee up front. Estate plans for a husband and wife should not cost twice as much as an estate plan for a single person just because there are two sets of documents. Often they are mirror images of one another, making the second set of documents less expensive to prepare.

Reach out to us by submitting a request here, by phone at (512) 328-6346, or by email at info@texasprobate.com to discuss how we may be able to help.

Generally speaking, most people benefit from having a will. Having a valid will in place at your death can help make the administration and distribution of your estate easier for those who are left behind. Most of us are concerned about what happens to our property at our death and about reducing the burden on the loved ones we leave behind. A well-drafted will can address both of these concerns, and having one is a good idea for most everyone who has capacity to make one.

A will is a document which controls where your property passes upon your death. In Texas, there are two basic types of wills -- (1) the attested or formal will, which is in writing and is witnessed (by two or more witnesses) and (2) the holographic will, which is wholly in the testator’s handwriting and signed by the testator. Generally, the most effective wills are the attested or formal wills.

A will disposes of all property that the testator (person making a will) owns, no matter where it is located and what kind of property it is. Importantly, a will does not control how property passes if the property has a beneficiary designation or other contractual arrangement addressing the disposition of property at the owner’s death (often referred to as “non-probate assets”). For instance, retirement accounts, life insurance, and some brokerage accounts may be set up to name a beneficiary. Property held in a trust usually does not pass under a will either. Where there is a valid beneficiary designation or transfer-on-death provision, those assets will not be controlled by the property owner’s will. That is why coordinating beneficiary designations with an individual’s will is an important part of the estate planning process. At Karisch Jonas Law, we work with our estate planning clients to determine the best way to structure beneficiary designations.

Maybe. It is possible that a will written wholly in the testator’s handwriting and signed by the testator (a “holographic will”) can be valid and admitted to probate in Texas. Many problems can arise with this type of will, however. It may not be recognized as valid by the court. It may fail to dispose of all property. It may fail to take advantage of efficient and cost-saving procedures available if a proper, formal will is used. And it will cost more to probate the will than a proper, formal will. For these reasons, holographic wills are not recommended.

Not necessarily. You do not know what your financial condition will be at your death or what property you will own at your death. Also, your family situation may make having a will crucial to your loved ones. For example, if you are married with a minor child, having a will can make all the difference for your survivors, even if you have few assets. On the other hand, if you have little property, are unmarried, with no children, with both parents alive, and you want all of your property to pass to your parents, you may not need a will. These are just examples. Ask an attorney about your situation to see how important it is for you to have a will.

Maybe, but probably not. A plan like this may work in some situations, but in most cases it fails to cover many contingencies which may occur, with disastrous results. For example, if the person you designate on a beneficiary designation or signature card dies before you do and you do not change the designation, the property could go to someone you don't want. A well-drafted will covers many more contingencies. Also, if the person who ends up with the property is a minor or an incapacitated person, insurance companies, brokerage firms, and banks will not pay proceeds to or transfer assets without a guardianship or trust. A well-drafted will may contain a trust for minors and incapacitated persons, but without that trust an expensive, cumbersome guardianship is the result. (See the frequently asked questions about guardianships for more information.) There also are potential negative tax consequences of using only beneficiary designations or pay-on-death designations to pass property at your death. For example, if your estate is a taxable estate for federal estate tax purposes, a well-drafted will can provide for creation of a trust after your death to save taxes for your surviving spouse and/or other beneficiaries. If you do not have a will, your loved ones could end up paying estate tax which may have been avoided if you had a properly drafted will.

If you know that you have a terminal condition and you are concerned about the disposition of your property or the care of loved ones after your death, you may want to execute a will as soon as possible while you are well enough and have the capacity to do so. These situations are very personal, and if you find yourself in this position, you should consult an attorney to discuss your options with you. At Karisch Jonas Law, we have worked with many clients who are facing difficult diagnoses, and we work hard to accommodate urgent situations in a timely way.

Yes. If you are concerned about making sure that some of your property goes to your children in this situation, you can take certain steps in a will to help accomplish your goals. For example, you could make a gift of a certain amount of cash or a certain percentage of your estate to your children, outright or in trust at your death. (However, there may be negative estate tax consequences in doing this.) You could also leave property in trust for the benefit of your spouse with what is left of the trust (the remainder of the trust) passing to your children at your spouse’s death. This type of arrangement has potential problems as well. These are just two examples of steps you can take in this situation. However, this is very personal and the appropriate provisions to include in your will depend on your family dynamics and your estate planning objectives. Having a property drafted will can help. You should contact an attorney to assist you.

There are many estate planning products on the market today that represent to consumers that legal documents such as a will may be prepared online or from a form without the help of an attorney. In some cases, these products may work. However, many of these products are not state-specific, and therefore, do not meet the specific requirements for the state in which the testator resides and, ultimately, where the will is offered for probate. (Even though the form may be "valid in all 50 states," it could fail to include provisions required by Texas law for low-cost, efficient administration of your estate.) In addition, preparing a will without personalized legal advice may cause you to overlook important factors in your situation, which can cause problems and extra expense later. The best way to go about doing a will is to contact an attorney in your area to assist you. Prior to meeting with an estate planning attorney, you should think about how you would like to leave your property at your death, and who you would like to designate to handle your estate after your death. See above for more information about the estate planning process and preparing to meet with an estate planning attorney.

This is a hard question but one you should discuss with the lawyer at or before the initial meeting. Often people call us and ask what their estate plan will cost. This is like calling a doctor and saying you have a stomach ache but you want to know what it will cost before you come to see him or her. The cost depends on the problem. This is the same in an estate plan. The cost usually will depend on the complexity of the documents you need. The complexity depends on the nature of your family or other beneficiaries, your assets, and your wishes for how property should be handled. However, you should ask whether the attorney bills by the hour or charges a flat rate for wills of a certain category. You can ask for “ballpark” amounts to give you some idea of the cost. You can ask if the initial meeting is free. Never hesitate to ask about fees up front. If an attorney refuses to discuss fees, find another attorney. You have a right to a written fee agreement before you retain the attorney to prepare your documents. You should expect to pay a retainer, which will be some or all of the anticipated fee up front. Estate plans for a husband and wife should not cost twice as much as an estate plan for a single person just because there are two sets of documents. Often they are mirror images of one another, making the second set of documents less expensive to prepare.

A living trust can be used as an alternative to a will. Living trusts are usually more expensive to prepare than wills, and can be more complicated to understand. Texas has relatively simple and inexpensive probate. For these reasons, most Texans can achieve their estate planning goals cheaper and simpler with a will. However, there are times when living trusts are appropriate and a better solution than a will. See below for more information about living trusts, and be sure to ask your attorney to weigh the pros and cons for you.

You may see the term “per stirpes” in a will or other legal document. This term describes how property should be distributed among a family tree depending on which family members are living at the testator’s (person making the will) death. Property passing to a testator’s descendants per stirpes will be equally divided among that person’s children, if all of the children survive him or her, with the descendants of a predeceased child receiving their deceased parent’s share. For example, if a testator leaves her estate to her descendant, per stirpes, and both of her children survive her, each child will receive half of the testator’s estate. If one of the children dies before the testator and is survived by three children (the testator’s grandchildren), the surviving child will receive half of the estate, and the three grandchildren will each receive one-sixth of the estate. When you complete your own estate plan, you can decide if you would like to include a per stirpes distribution in your will.

“Tangible personal property” is a person’s physical belongings, including vehicles, home furnishings, art, jewelry, and amateur collections. It does not include real estate or bank accounts. Many wills specifically include a gift of tangible personal property to your chosen recipient, which would include all property in this category. If you want to give a particular item to a particular person (a special piece of jewelry or a car, for example), your will can also enumerate specific items in more detail.

The “residuary estate” under a will refers to all property that the person owns (other than non-probate assets, discussed above) that has not been specifically gifted in the will. For example, a will might give the tangible personal property to the testator’s children, the homestead to the testator’s surviving spouse, and everything else to a charity. The “everything else” gift is the residuary estate. Non-probate assets that have valid beneficiary designations are not part of the residuary estate.

Your documents should be kept in a safe place, and your executor should know how to find them. Many people keep their wills in a safe deposit box at a bank, but your executor may have troubling accessing your box after your death. Therefore, a fireproof file or safe at home is a better place to keep your documents.

In Texas, the probate process is more complicated and expensive if the will offered for probate is a copy rather than the original will. If you had a will prepared and you have lost the original, you should consult an attorney.

Reach out to us by submitting a request here, by phone at (512) 328-6346, or by email at info@texasprobate.com to discuss how we may be able to help.

You may have heard others talking about having a living trust instead of a will, or your financial advisor may have suggested that you look into a trust. Living trusts are popular alternatives to traditional wills as estate planning documents. Determining if a living trust is the best solution for you depends on your circumstances.

A trust is a legal device used for the management of property. A trust is essentially a legal relationship between a trustee and beneficiary, where the rules for the property are determined by the creator of the trust, or the settlor. In a trust, legal title to the property -- the right to manage the property -- is held by one person, called a trustee, while another person, called the beneficiary, has the beneficial right to the use and enjoyment of the property. A living trust is a trust created while the creator is living (compared to a testamentary trust, which is created at or after the creator's death under the terms of his or her will). A living trust may be revocable -- changeable by the creator prior to his or her death -- or irrevocable -- unchangeable by the creator. When most people speak of a "living trust," they mean a revocable trust created during the creator's lifetime for the management and disposition of all, or substantially all, of the creator's property. This kind of trust is sometimes called "revocable trusts," "management trusts" or simply "living trusts." It is this type of trust that will be discussed below.

In a typical case, the creator of the trust -- called the settlor or trustor -- names himself or herself as the initial trustee and the initial beneficiary. Thus, the settlor holds legal title to trust property as trustee for his or her own use and benefit as beneficiary. When the settlor dies, becomes incapacitated, or resigns as trustee, another person becomes trustee and manages the property for the benefit of the settlor, if living, or for the beneficiaries named by the settlor, if the settlor is dead. For example, the trust may provide that, upon the settlor's death, the settlor's daughter becomes trustee and is instructed to distribute the trust property in equal shares to the settlor's three children.

A will is a legal document that becomes effective at your death and specifies how your property is to be disposed of. To be effective, a will must be acknowledged as valid through a court procedure known as probate. A living trust also specifies how your property is to be disposed of at your death, but since it exists before your death, its validity does not need to be acknowledged by a probate proceeding. It is this quality -- avoidance of probate -- that is often appealing to clients at first glance.

No. Because a living trust is revocable and amendable, there is no creditor or marital property protection for property held in the trust. There are other types of trusts - - irrevocable third party trusts, for example - - that prevent the beneficiary’s creditors and/or divorce courts from being able to reach trust assets in most circumstances. Creating that type of trust usually means that the settlor gives up the right to use the trust property, and usually is appropriate only for selectively giving away assets the settlor no longer needs. Be wary of marketing that implies that structuring your estate plan as a living trust will provide asset protection to you.

Revocable living trusts are marketed in many states as a great way to avoid probate—especially in states with complicated administration procedures. In many states, estates are put through court-supervised administrations where the executor must have the court’s approval to do most anything. Over time this can be very expensive. However, in Texas, most well-drafted wills provided for independent administration, which allows an executor to handle estate business without ongoing court supervision and approval. Therefore, in Texas, delays or prohibitive costs of probate are not as much of a concern as they are in many states. However, some clients still prefer to go to extra effort to completely or partially avoid probate, usually as a way to save some work for their survivors after they are gone.

No. Property can get into a living trust either during the settlor’s lifetime or at their death. To put property into a living trust during your lifetime, you will have to retitle assets (including signing deeds transferring real estate into the trust) during your lifetime. Property must be in the trust before your death in order to avoid probate. Usually some of the settlor's property is left out of the living trust (either by design or neglect), so a pour-over will -- a will that "backs up" the living trust and says, in essence, "if I forgot to put anything into the living trust before I died, I hereby put it there at my death" -- has to be probated to get those assets into the trust. If you create a living trust as part of your estate plan and then do nothing, your trust will be valid and will dispose of your property at your death, but your property will have to go through probate in order to get into the trust.

It depends. Living trusts are more complicated than wills and typically cost more to prepare. (They also require the client to do more things, such as change ownership of property into the name of the trust, which definitely adds trouble and inconvenience and may add expense.) In most cases, where the plan of disposition is straightforward (for example, in trust for your spouse and then to your children in equal shares when the surviving spouse dies), the cost of the probate proceeding is likely to be roughly equal to the additional cost of the living trust-based estate plan, so there is little or no savings. In other cases, the savings and other advantages can be substantial. (See below for a general discussion of when a living trust is a good idea.)

Your lawyer should evaluate your particular situation to determine if a living trust is right for you. Be careful if the lawyer you consult never uses living trusts or always uses living trusts -- rarely is "one size fits all" good legal advice. Here are some factors which often make using a living trust a good idea:

* Real estate in another state -- If you are a Texas resident and own real estate in a state other than Texas, the proper use of a living trust could save you the cost of a probate proceeding in the other state.

* Impending disability is likely -- If your age or medical condition is such that you have a reasonable fear that you will soon be unable to manage your own property prior to your death, then a well-drafted living trust could make it easier for the people you pick to manage your property.

* Heightened privacy concerns -- Virtually everyone wishes to keep their personal financial affairs private, but if you have a greater than average desire for privacy, then a living trust may be a good idea. If used properly, there can be less public disclosure of what you own if you become disabled or die. Be careful that marketers of living trusts don't use this improperly as a fear factor to motivate you to buy their product, however.

* Post-retirement, stable assets -- If you are retired and are not in "acquisition mode" -- in other words, if you are not buying new cars every couple of years, opening and closing accounts frequently, changing jobs, starting new businesses, etc. -- then a living trust may make sense. For the rest of us, properly operating a funded living trust is usually too much of a hassle -- especially if probate avoidance is the primary goal.

* Will contest likely -- If your loved ones are likely to fight over your will, then in some cases (with expert advice and attention) a living trust may make it less likely that someone will successfully contest your plan based on undue influence, lack of capacity, etc.

If most or all of these factors are not present in your situation -- and they aren't for the vast majority of people, then a traditional will-based plan is probably the simplest and cheapest way to plan. Remember, though, that these are just general guidelines -- your lawyer will discuss your particular situation with you and help you determine what is best for you.

The traditional and most common method of estate planning involves a will and various disability documents. One advantage of a living trust is its usefulness in the event of incapacity. However, a statutory durable power of attorney may accomplish the same thing in case of incapacity. While some banks and others are reluctant to accept and act on a power of attorney, the Texas Statutory Durable Power of Attorney is generally accepted at most banks and financial institutions.

Maybe so, maybe not. It is likely to have some effect, but it might not work the way you intend. Wills are complex documents that should be prepared by an attorney -- and living trusts are even more complicated than wills. Lawyers who do estate planning and probate work often are called on to fix, or try to administer, do-it-yourself living trusts which are deficient in one or more respects. The cost of fixing or administering a deficient trust often exceeds the cost of having a proper, lawyer-prepared instrument. It may sound self-serving for lawyers to say so, but self-help trusts and wills often do more harm than good.

Living trust scams are widespread. The scams often operate at two levels -- (1) the seller charges the consumer for the plan, which may be packaged well (leather-bound folder, lots of related forms, etc.) but often is inadequate, inappropriate, and overpriced; and (2) the seller uses the plan to learn about the consumer's finances, leading to the sale of inappropriate investments or outright theft of assets. The Texas Young Lawyers Association has a helpful brochure called “Living Trust Scams and the Senior Consumer” that is available online. Don't buy a living trust from a non-lawyer. Lawyers must be licensed and are accountable to their clients and to the public for misconduct. Click here to see if someone is a licensed attorney and if that attorney has been disciplined for misconduct by the State Bar of Texas. Often the salesperson states that, while he or she is not a lawyer, a lawyer will review the plan. If this happens, insist on dealing directly with the lawyer, not the unlicensed salesperson. Even if the salesperson is not a crook, it is likely that the cost of the living trust will exceed the cost of an appropriate, customized, lawyer-prepared estate plan. Don't let your reluctance to deal with lawyers cause you to waste your money.

Reach out to us by submitting a request here, by phone at (512) 328-6346, or by email at info@texasprobate.com to discuss how we may be able to help.

Family limited partnerships (FLPs) can help families keep business assets together and working, even in times of transition such as death or retirement. They are not for everyone and every situation, however.

A limited partnership is a type of business organization recognized in Texas and most states where the management rights and responsibilities are vested in one or more general partners while most of the ownership interests are vested in limited partners. A limited partnership is a flow-through entity for income tax purposes, meaning that the partners pay income taxes or enjoy tax benefits individually, based upon their ownership interest in the partnership. A family limited partnership is not a different type of business organization. Rather, it is often used to describe a limited partnership where most or all of the general partners and limited partners are related to each other.

Families with business assets that they wish to own in common – including assets that some family members wish to pass on to other family members – may benefit from an FLP. For example, parents owning all or most of the interest in a restaurant who wish to involve their children in ownership and management of the business may benefit from setting up an FLP. The FLP permits the family to have flexibility in dividing ownership and control in ways which work for its members. Because the organizational costs can be substantial, families with business assets of less than $2 million rarely find it advantageous to establish an FLP.

Any type of business or investment assets can work in an FLP. Assets connected with an operating business, such as a store or ranch, work particularly well, but some families establish FLPs solely with investment-type assets. Personal assets, such as homes and furniture, should not be placed in an FLP. Also, retirement accounts, such as IRAs and 401k plans, usually don’t work in an FLP.

Among the benefits are:

* Centralization of Management – An FLP permits ownership to be fractionalized while management remains centralized.

* Facilitating Intra-Family Transfers – FLPs can make it easier to transfer interests in family business assets from one family member to another. For example, a parent can transfer a specified percentage of a collection of business assets (in other words, an interest in the FLP) to each child, rather than multiple transfers of specific assets.

* Discounts -- In many cases, the FLP interests owned or transferred by a family member are valued at less than the underlying assets would be valued if the partnership did not exist, potentially saving gift and estate taxes.

* Avoiding and resolving family disputes – FLPS can provide a means to resolve existing or future family disputes and make it more likely to avoid these disputes entirely.

Assets are valued for gift and estate tax purposes at their fair market value – what a willing buyer would pay a willing seller for those assets. FLPs typically have restrictions on their transferability. For example, transfers to non-family members may be prohibited unless other family members agree. Also, there may be a smaller number of persons interested in buying limited partnership interests than there would be for the underlying assets. These factors – restrictions on transferability and lack of marketability, among others – can make the price a willing buyer would pay for an FLP interest less than what the same type of buyer would pay for the underlying assets. This difference – the discount – can reduce the amount of gift and estate taxes payable. Discounts can range from nothing to 40% or more, depending upon many factors, including the terms of the partnership agreement, the type of partnership assets, the ownership percentages of the various partners, and how the partnership is operated. The Internal Revenue Service does not like that FLPs often receive discounts for estate and gift tax purposes, and it has several ways to attack discounts. Because of this, no family should assume that discounts will be available for their FLP. There should be reasons other than possible discounts for creating the FLP.

Among the drawbacks are:

* Organizational costs -- Setting up an FLP typically costs $5,000 or more, so the potential advantages need to outweigh this upfront cost.

* Operating requirements – The FLP must be operated as a separate business, with separate bank and investment accounts and separate tax returns (the tax effects flow through to the partners, but a separate tax return is required). The FLP form must be respected, which will mean changes from prior family practices. Personal finances and partnership finances must be kept separate. Many people aren’t willing to make these changes, and FLPs are not for these people.

* Tax scrutiny – The IRS scrutinizes FLPs for estate and gift tax purposes because it does not like the discounts many FLPs receive. Families should be prepared for this type of scrutiny when gift and estate tax returns are filed.

Reach out to us by submitting a request here, by phone at (512) 328-6346, or by email at info@texasprobate.com to discuss how we may be able to help.

It always is a good idea to review your estate plan anytime you have a significant change in your family circumstances, including divorce.

Texas law automatically nullifies a bequest to your former spouse in a will, if the will was made before the divorce, so the property subject to the will would be distributed as though the former spouse had predeceased you. You might need to change other things, however, such as the trustee of any trust created for your children, and the guardian of your minor children. Of course, you may want to change your will prior to your divorce so that your soon-to-be ex-spouse won't benefit from it if you die before the divorce is final. Also, you may want to leave your property to someone other than the person who stands to receive it under your current will, once you are divorced.

Unless you state otherwise, your appointment of a spouse dissolves on divorce, but you may want to revoke any powers of attorney before the divorce is final.

A statutory durable power of attorney (which authorizes your agent to act for you in property and financial matters) generally can be revoked by a statement in writing delivered to the agent. The specific terms of the power of attorney you signed may require you to take other action, such as filing your revocation in the public records. You also should be aware that, unless the terms of the power of attorney provide otherwise, your revocation may not be effective as to a third party, unless that party receives actual notice that you have revoked the power.

If you have signed a medical power of attorney, you have the right to revoke the authority granted to your agent by informing your agent or your health or residential care provider orally or in writing or by your execution of a subsequent medical power of attorney.

If your life insurance policy named your spouse as beneficiary, Texas law will ignore this designation after your divorce, unless the divorce decree provides otherwise. Nevertheless, you always should review your beneficiary designations on your life insurance and your retirement plans, pensions, annuities and IRAs at the time of your divorce. It is important to coordinate your beneficiary designations with your estate planning documents to avoid potential tax and estate administration problems after your death and to make sure that any death benefits payable to a minor or incapacitated person are directed to a trust for that person’s benefit. Properly handled, this may avoid the need to create a guardianship.

Texas statutes and case law give beneficiaries certain rights and remedies. The first place to look, however, is the trust document. The trust instrument may provide beneficiaries with specific remedies, such as a procedure allowing the beneficiaries to replace a trustee under certain circumstances. A lawyer familiar with trust law can help you understand your rights and options.

Yes. Trustees are fiduciaries and owe certain duties to the beneficiaries of the trust. If you are a beneficiary of the trust, the trustee has a duty to provide you with certain information upon request, including a statement of trust assets, receipts, expenditures, and distributions to beneficiaries.

The trustee’s failure to comply with a reasonable request for information may be a breach of the trustee’s fiduciary duty to you as a beneficiary, which can be the basis of a lawsuit. In addition, the Texas Trust Code gives the beneficiaries the right to demand a formal accounting once a year, in which the trustee must report all trust property that the trustee is administering, all receipts, disbursements, and other transactions, the name and location of the banks where the cash is deposited, and all known liabilities of the trust. The beneficiaries’ statutory right to an accounting can be enforced in court. Also, the trust instrument itself may require the trustee to account periodically or may give the beneficiaries the right to request more frequent accountings.

You should have an attorney review the trust to see if it contains provisions relating to the removal of a trustee. If the terms of the trust do not provide another means of dealing with the problem, you may be able to bring an action in court, where the judge has the power to remove a trustee if you can show that the trustee has violated or attempted to violate the terms of the trust, the trustee has become incompetent, or if the judge finds that the trustee should be removed for other cause. “Other cause” might exist where the trustee has breached fiduciary duties to you as beneficiary by, for example, self-dealing, failing to make required distributions, or stealing trust property.

The fact that trust investments have declined in value probably is not, by itself, a breach of the trustee’s duty. The trust instrument may include an investment standard which the trustee is required to meet. If the trustee's performance falls short of that standard, you may be able to sue the trustee for damages, seek his removal or pursue another remedy. If the trust instrument contains no contrary investment standard, then the trustee has a duty to comply with the prudent investor rule, which requires the trustee to consider many factors in deciding how to invest the trust assets. Under the prudent investor rule, the possible liability of the trustee is based on the performance of the entire portfolio, not just a single investment. If the trustee fails to meet the prudent investor rule standard, the beneficiaries of the trust may have a cause of action against the trustee for damages to the trust.

Reach out to us by submitting a request here, by phone at (512) 328-6346, or by email at info@texasprobate.com to discuss how we may be able to help.

A guardianship is a court-supervised administration for a minor or for an incapacitated person. A person -- called the guardian -- is appointed by a court to care for the person and/or property of the minor or incapacitated person -- called the ward. In some other states, guardianships are called conservatorships, but in Texas they are called guardianships.

There are two types of guardians and guardianships. A guardian appointed to take care of the physical well-being of a ward is called a guardian of the person, while a guardian appointed to take care of the ward's property is called a guardian of the estate. In some cases, only one type of guardian is appointed for a particular ward. In many cases, both a guardian of the person and a guardian of the estate are appointed for a ward. (Often, but not always, they are the same person.)

A minor is a person younger than 18 years who has never been married or who has not had his or her disabilities of minority removed by judicial action. A minor is considered an incapacitated person. An adult who, because of physical or mental condition, is substantially unable to provide food, clothing or shelter for himself or herself, to care for his or her own physical health, or to manage his or her own financial affairs is considered an incapacitated person. The definition of incapacitated person also includes a person who must have a guardian appointed to receive funds due the person from any governmental source.

Texas law has very specific procedures in place for proving the need for a guardianship and getting a guardian appointed. These procedures are too complicated for a lay person to undertake without a lawyer's help, and most courts will not entertain guardianship applications filed by non-lawyers. To get a guardianship, incapacity must be proven by clear and convincing evidence -- a very high standard. Unless the proposed ward is a minor, a certificate from a doctor who has examined the proposed ward must be filed with the court. There are specific requirements for the certificate, and it must be dated within a certain time period of the filing of the application for guardianship, so you should consult an attorney for the specific requirements before the doctor conducts the examination which forms the basis for the certificate. The court will appoint an attorney -- called an attorney ad litem -- to represent the proposed ward, since the granting of a guardianship takes away some of the ward's civil rights. Texas courts typically employ the doctrine of least restrictive alternatives in guardianship cases -- taking away as few of the ward's rights as possible and giving the guardian only those rights and powers as is necessary to protect the ward or the ward's property.

If the court decides that a guardian is needed, Texas law provides a priority list for choosing the guardian. If the ward is a minor, the following persons have priority in the following order: parents; the person designated by the last surviving parent of the ward in a properly executed designation of guardian (see the forms section for the statutory form to do this); the nearest ascendant in the direct line of the minor (ascendants are grandparents, great-grandparents, etc.); next of kin; and a non-relative. If the ward is an adult, the following persons have priority in the following order: the person designated by the ward prior to his or her incapacity in a properly executed designation of guardian (see the forms section for the statutory form to do this); in some cases, the person designated by the last surviving parent of the ward in a properly executed designation of guardian (see the forms section for the statutory form to do this); the ward's spouse; next of kin; and a non-relative. If more than one person of the same priority wishes to be guardian, the court chooses the one who is best qualified to serve. In considering priority, it is important to note that the court has the authority to skip over a person higher on the priority list if the court finds that person to be ineligible. A person is disqualified and ineligible to be appointed guardian if he or she is a minor; a person whose conduct is notoriously bad; an incapacitated person; a person who has certain conflicts of interest with the ward; 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 found unsuitable by the court; a person specifically disqualified from serving as guardian by the ward prior to his or her incapacity in a properly executed designation of guardian (see the forms section for the statutory form to do this); and a person who is not a resident of Texas and who has not designated an agent in Texas for service of process. Because of these priorities, it is important for an adult individual who is worried about his or her possible future incapacity to consider designating those persons he or she wishes to serve as guardian and those persons he or she wishes to disqualify from serving as guardian, especially if a non-relative is preferred (see the forms section for the statutory form to do this).

It is impossible to include an exhaustive list of the duties of a guardian of the estate here. In general, a guardian of the estate is a fiduciary and is held to the high standards to which all fiduciaries are held in caring for the estate of the ward. The guardian of the estate is required to post a bond in an amount set by the court to assure that the guardian fulfills his or her duties. Insurance companies issue the bond and the guardian pays the premium. Generally the guardian is reimbursed for the cost of the premium from the ward's estate. The guardian of the estate also is required to publish a notice to creditors in a local newspaper and file an inventory of the ward's assets. Each year, the guardian of the estate is required to file an annual account, detailing the receipts and disbursements during the year. This is a checkbook-type accounting -- the beginning balance, plus receipts, minus disbursements, must equal the ending balance to the penny. When the guardianship terminates, the guardian must file a final account. The annual and final accounts are complicated enough that a lawyer's assistance is needed.

It is impossible to include an exhaustive list of the duties of a guardian of the person here. In general, a guardian of the person is a fiduciary and is held to the high standards to which all fiduciaries are held in caring for the ward. The guardian of the person is required to post a bond in an amount set by the court to assure that the guardian fulfills his or her duties. Unless the guardian's duties are restricted by the court, the guardian of the person is entitled to the charge and control of the person of the ward and has the right to have physical possession of the ward and to establish the ward's domicile, the duty of care, control and protection of the ward, the duty to provide the ward with clothing, food, medical care and shelter and the power to consent to medical, psychiatric and surgical treatment. However, the guardian of the person's powers to commit the ward to in-patient psychiatric treatment are limited. Some families pursue a guardianship only to discover that the guardian cannot force the ward to submit to in-patient psychiatric care. Be sure to ask your lawyer about this if this is one of the main reasons for seeking a guardianship.

Yes. Guardianship law is designed to protect the rights and interests of the ward, and it does so by establishing procedures intended to assure guardian compliance with the rules. These procedures necessitate a lot of lawyer involvement. Establishing a guardianship can be expensive, and the costs of administering a guardianship of the estate can easily exceed the annual income of the estate. For this reason, it is usually a good idea to see if there are any alternatives to a guardianship before starting down the guardianship path. See below for frequently asked questions about alternatives to guardianships.

Alternatives to guardianship should be considered. See below for frequently asked questions about alternatives to guardianships. If no alternatives are available, some charitable organizations provide assistance for guardianships of the estate. Check with the local bar association or with the county court or probate court in your area to see if any are active in your area.

A guardianship may be the only way to care for the person or property of a minor or an incapacitated person, but often there are less costly, less burdensome alternatives. Determining the best solution depends on the circumstances. Your lawyer can advise you what is best in your situation.

A guardianship is a court-supervised administration for a minor or for an incapacitated person. A person -- called the guardian -- is appointed by a court to care for the person and/or property of the minor or incapacitated person -- called the ward. There are two types of guardians and guardianships. A guardian appointed to take care of the physical well-being of a ward is called a guardian of the person, while a guardian appointed to take care of the ward's property is called a guardian of the estate. In some cases, only one type of guardian is appointed for a particular ward. In many cases, both a guardian of the person and a guardian of the estate is appointed for a ward. (Often, but not always, they are the same person.) See above for more information about guardianships in general.

In most cases, parents are considered to be the natural guardians of the person of their minor children, so no court procedure is required to appoint a guardian of the person. Even though a parent may be the natural guardian of the person of their minor child, they are not natural guardian of the estate -- a court proceeding is always required to become guardian of the estate. If the child has property or income, in some cases provisions of the Family Code may permit guardianship of the estate to be avoided. For example, parents have certain rights to the income of their minor child, and a managing conservator has certain rights regarding the child's property. In many cases, however, a guardian of the estate will be required if the minor has property. You should consult a lawyer for an evaluation of your particular fact situation and advice which is appropriate for you.

Yes. A well-drafted will or trust will create a trust for a person who is a minor or who is incapacitated. The trustee can be someone you trust to administer the property for the benefit of the minor or incapacitated person. In most cases, the trustee is authorized to use the money to pay for the person's health, education, maintenance, and support. (Sometimes it is prudent to use a special needs trust to help assure the availability of Medicaid or other government benefits.) When the minor reaches an appropriate age (most people pick an age beyond 18, since the child may not be ready to manage property as an 18-year-old), the trust can terminate and the property can be distributed to the child.

Yes. Even if property is left to a minor outside of a trust, a guardianship management trust (sometimes called a 1301 management trust because they are set up under Chapter 1301 of the Texas Estates Code) can be established. Court approval is required, and these trusts are less flexible and more expensive to establish than a trust in a will. In most cases the trustee must be a bank or trust company. Also, the age of trust termination is set by the court and has to be 18, 25 or some age in between. Guardianship-style accountings are required each year, and there are restrictions on the compensation a trustee can receive. For these reasons, banks and trust companies are sometimes reluctant to take small trusts. If no bank or trust company will take a 1301 management trust, the court may appoint an individual, but the individual must post a bond, which may be difficult to obtain.

Because of accounting requirements and restrictions on fees, banks and trust companies are reluctant to take on 1301 management trusts below a certain size. The minimum size varies from bank to bank and somewhat depends on the nature of the assets in the trust. In some cases, banks and trust companies have declined to accept trusts with assets of less than $1,000,000. Other banks and trust companies will accept certain trusts under $100,000. It may be necessary to shop around to learn which banks and trust companies -- if any -- are interested.

Maybe not. There are several non-guardianship alternatives if the property is being received pursuant to a judgment, including annuities and a special type of trust usually called a 142 trust because it is set up under Chapter 142 of the Texas Property Code. A 142 trust is similar to a 1301 management trust. The trustee generally must be a bank or trust company, and the trust can last until the minor reaches age 25. A big advantage of 142 trusts over 1301 management trusts is that there is no annual accounting requirement and trustee compensation is less restrictive. For these reasons, banks and trust companies often are willing to take smaller 142 trusts.

No. One possibility is a 1301 management trust, discussed above. If the property is cash and is under $100,000, Texas law has a procedure where the money may be placed in an interest-bearing account by the county clerk and held until the minor reaches age 18. Your lawyer can tell you if this procedure is a good idea in your case. The interest earned on the money may not be as great as a trust would earn, and it will be difficult or impossible to spend the money prior to the child reaching age 18, but there is no annual accounting requirement so the costs are reduced.

Maybe not. If the child's interest in the real property is worth less than $100,000 and if the other co-owners agree, Texas law has a procedure for getting court approval of the sale of the property and for placing the child's share of the proceeds in an interest-bearing account by the county clerk, where the money is held until the child turns 18. Your lawyer can tell you if this procedure is available in your case.

Yes. You can sign disability planning documents such as powers of attorney to designate agents to make decisions for you in the event you become incapacitated. Many of these documents are on forms which have been adopted by the Texas legislature for use by Texans. These documents allow you to designate agents to make both property decisions and medical decisions for you. Designating an agent can be tricky and dangerous, however. Lawyers and judges hear stories of persons who were taken advantage of by their agents. For these reasons, you should seek a lawyer's advice before signing a power of attorney or other disability planning document. One alternative to using a power of attorney for property is to create a trust benefiting yourself and naming the person you trust to be trustee. (See above for frequently asked questions about living trusts.) Trusts often have more structure and safeguards than powers of attorney. However, even with trusts the beneficiary is vulnerable to trustee abuse. The main reason guardianships are expensive is that there are safeguards in place to protect the ward. Trusts and powers of attorney are less expensive alternatives largely because the safeguards are missing, so persons using them must place a great deal of trust and confidence in the agent or trustee named.

A well-drafted will or trust will contain a trust to hold your children's property until they are sufficiently old to handle it themselves. You can designate a guardian of the person and estate for your minor children (and, in some cases, for your adult disabled child) either in your will or in a form meeting specific statutory requirements.

First, in Texas you have a legal duty to report abuse or neglect to the Texas Department of Family and Protective Services (Adult Protective Services) by calling the toll-free number: 1-800-252-5400. You can get more information about elder abuse and reporting requirements from TDFPS's website. Depending on the circumstances, there are other steps you can take to protect the elderly person.

If you suspect that your elderly relative is legally incapacitated and unable to care for himself or herself, a guardianship may be appropriate. For more information about guardianships, see the frequently asked questions on guardianship, above. You may also send an “information letter” to the judge of the probate court in the county where your relative lives, informing the judge that the elderly person may be in need of a guardianship. There are less restrictive alternatives to guardianship that may be appropriate to consider. For more information on alternatives to guardianship, see the frequently asked questions above.

Your relative may have access to some assistance, depending on where she lives. Texas has 23 local money management programs that receive state funding for providing bill paying and other money management services for qualified elders, and some counties have private non-profit organizations that provide similar services Your relative may also want to consider designating you or some other person as agent on a power of attorney, or even creating a trust.

There are various methods by which you can plan to fund a child’s or grandchild’s college education, but the best way varies according to each person’s financial situation.

As a parent or grandparent, several issues regarding funding college should be looked at carefully. These issues include whether you want to make gifts that qualify for an exemption from federal gift taxes, whether or not you want the money you give to be included in your estate if you should die before your child or grandchild reaches majority age, how much control you want over the money while you are saving, and whether the money will grow tax-deferred or tax-free.

Texas provides its residents several vehicles for funding college. Perhaps the best-known method for college savings is the Texas Uniform Transfer to Minors Act (TUTMA) account. The Guaranteed Tuition Plan (which was formerly known as the Texas Tomorrow Fund) is another choice for parents and grandparents saving for college. Texas also has a 529 Plan that is discussed below.

For gifts made by using a TUTMA account, the gift must be made to a person as custodian for the beneficiary and the beneficiary must be under the age of 21 at the time the gift is made. The main advantage is the relative simplicity of the process. Generally, an account is set up pursuant to the Texas Property Code and transfers of money, real estate, investments, etc. are made. The principal disadvantage of the TUTMA is the fact that the beneficiary takes full control of the account when he or she turns 21. This could be problematic if the child lacks the maturity to deal with a substantial amount of money or simply wants to do something different than the custodian or person giving the gift originally intended. Another disadvantage is the fact that the funds will be includible in the parent’s estate if the parent is custodian and dies before the child reaches majority. There may also be differing tax consequences for parents as opposed to grandparents in gifting to a TUTMA.

The Guaranteed Tuition Plan (GTP) is offered by the State of Texas so that those saving for a child's or grandchild's education can lock in tuition for college at current prices. The principal advantage of the GTP is that the plan benefits are constitutionally guaranteed by the State of Texas. A parent or grandparent may purchase a contract in the GTP for the minor, and that minor’s college tuition is guaranteed when they enter college. Other advantages of the GTP are that the distributions made are tax-free and the amounts given by the donor are not includible in that donor’s estate. The obvious disadvantage is lack of control if the beneficiary does not want to go to college or receives a full scholarship. The donor may receive a refund equal to the average amount of college tuition. This will result in that money being includible in that person’s estate if they do not dispose of it by gift again.

A 529 plan is a federal plan (sponsored by individual states) that has become increasingly popular in recent years. It is similar to the Guaranteed Tuition Plan except that the beneficiary’s tuition is not guaranteed when they reach college. Generally, a 529 plan offers more flexibility and control, but is also more risky than the GTP. A parent or grandparent can set up a 529 plan for a minor and have that gifted amount taken out of their estate, and upon distribution the funds are income tax-free. The person establishing the plan may change beneficiaries during the plan and usually can choose the basic investment program the plan will follow. Contributions made to a 529 plan fall under the annual gift tax exclusion and donors have an option to consolidate up to five (5) years of annual gifts in the first year. However, this may have tax implications if other gifting is possible during that time.

There are various other ways to save for college, including simply saving and investing money yourself. This allows you to keep control and flexibility with the savings. When the time comes to pay college expenses, these amounts can be paid without any gift tax consequences, since the Internal Revenue Code allows what would otherwise be taxable gifts (gifts exceeding the annual gift tax exclusion amount, which is $16,000 per year for gifts made in 2023) to be paid as tuition and other college expenses if they are paid directly to an educational institution. However, there are three major problems with this method. First, since the funds will not be placed in a special savings vehicle as described above, the funds will not grow tax-deferred. In other words, the funds will be taxed as they grow, meaning that they will grow at a slower rate than funds similarly invested in tax-deferred vehicles. Second, the funds will be includible in the person’s estate if they die before the funds are used to pay for the minor’s education. Third, the funds are not protected from your creditors if you have to declare bankruptcy before your child reaches college age. (Of course, the money is available to pay your creditors, which may keep you out of bankruptcy).