Estate planning is a process that involves more than the preparation of a will, or a revocable trust, and a power of attorney. It is a deliberate process to help one identify and implement their goals – not just as they relate to incapacitation or death – but more broadly, as they relate to how one lives their life. The result might be a basic plan to arrange for property to pass as the client wishes at death and to allow for efficient asset management during the client’s lifetime. For estate tax efficiency and other reasons, the client might wish to include gifting strategies and other advanced tools in the plan. We take a comprehensive view of the client’s personal and financial situation because assets and personal circumstances often dictate the type of plan recommended. Assets such as closely held business interests, retirement benefits, and life insurance policies are all assets that benefit from special planning. Similarly, young adults, engaged couples, couples living together while unmarried, families with special needs children, and clients who wish to plan for their pets all require different types of documents and provisions to meet their needs and accomplish their goals. For all of our clients, thoughtful planning to protect against future uncertainties is our job.
The Estate Planning Process – Each plan we draft is unique and designed to meet the goals of each client. We begin with a discussion of the client’s goals and circumstances, and we keep those in mind throughout the process. Our planning process includes a detailed review of the client’s assets and the manner in which they are owned. This helps us identify issues related to estate tax, income tax, probate avoidance, if that is a priority of the client, and ensuring the property will pass according to the client’s wishes. We also discuss with the client their personal circumstances, their family, and any other intended beneficiaries for whom they intend to plan. This helps us recognize challenges that might arise when an estate plan is being administered, and we draft with those issues in mind. For example, an estate plan might be designed to limit family conflicts, or to provide financial management and asset protection for certain beneficiaries. Clients can hold their assets during life in a way that allows them to retain control of their wealth while avoiding probate, minimizing expenses, and reducing transfer taxes (such as estate tax, gift tax, and generation skipping transfer tax). We view education as a fundamental component of our work, and we take our time to help our clients understand each document they sign.
Marital Property Planning
Although marital property agreements may traditionally be thought of as vehicles to plan for divorce, they may more broadly be thought of as vehicles to plan for the dissolution of the marriage – whether that be by divorce or by death of one of the parties. The latter highlights the fact that these agreements are often used as part of one’s estate planning process.
Premarital agreements – One important estate planning and asset protection tool is a premarital agreement. A premarital agreement gives parties the option to define or alter their marital property rights without judicial action or intervention. It can be used to effectively protect assets both in the case of divorce and in the event of death. Our goal is to protect your assets and work with you, your fiancé, and your fiancé’s attorney to construct a premarital agreement that will benefit you and withstand a future contest.
Post-Marital Agreements – The most common type of post-marital agreement is a partition and exchange agreement which is an agreement with which spouses partition community property to create separate property for each spouse. The other type of post-marital agreement is a conversion agreement which allows spouses to convert separate property to community property. Defining ownership of separate property and community property is a critical step in the estate planning process for various reasons, including avoiding disputes over the characterization of property in the event of your divorce, disability or death.
Planning to Live Together – Individuals who are unmarried but living with a partner are not able to rely on Texas or federal law to protect them in the event of a death or a termination of the relationship. Therefore, planning is critical. We help many cohabiting, unmarried couples to create a thoughtful plan for their future. Our goal is to make sure that if our client or their partner dies or becomes incapacitated, there will be peace of mind. This planning should include traditional estate planning documents like a durable power of attorney, medical power of attorney, and will, but it may also involve other creative solutions. For example, the couple might enter into a cohabitation agreement. This formal agreement can be made when the couple starts living together, or after the fact, and it can be an excellent way to protect both parties. It may handle a variety of issues that can arise, including how property and debts will be handled in the event of a termination of the relationship.
ESTATE AND TRUST ADMINISTRATION
Counsel from an attorney who specializes in estate planning and probate law can help make the difficult task of probating a Will and administering an estate or a trust easier and more efficient. We guide personal representatives, beneficiaries, trustees, and other fiduciaries through administrative issues in a variety of estates. Our experience includes working with estates that involve business interests, real property, and mineral interests. Trustees and personal representatives must act under a heightened standard of care. We advise these fiduciaries on how to preform their duties and provide assistance throughout the administration.
Administration of an Estate – The process of administering an estate is significantly easier with a thoughtful estate plan in place. However, even if the decedent died with no plan in place, we can help the surviving family members through the process as well. Essentially, one or more individuals, or an entity, will be in charge of the estate, as the executor/administrator, the trustee, or both. The people or entities who manage an estate are called “fiduciaries,” and we represent those fiduciaries. We provide advice on how to find and collect the decedent’s assets, how to safekeep the property, how to communicate with the beneficiaries, and how to satisfy the filing and reporting requirements for the estate. We can also perform many of the tasks associated with estate administration, easing the process for the fiduciaries and making it a smooth process for the beneficiaries.
The Probate Process – Many times it’s not possible, or even advisable, to avoid probate. Property subject to the probate process incudes any property remaining in a deceased person’s name at the time of his or her death, with no designated beneficiary and that did not pass contractually with rights of survivorship. Since, under such circumstances, there is no living owner to sign over the property, a court must step in to appoint an executor or administrator, who can transfer the property under the court’s authority. Of course, court authority means there must be court proceedings, which involves the formalities and restrictions one might expect. The probate of a Will can be an overwhelming process when a loved one passes away. We recognize this and work diligently to make the process as smooth as possible for the surviving family members.
Estate Tax Return Preparation – A significant component of our work is tax focused, with an emphasis on transfer taxes such as estate tax, gift tax, and generation skipping transfer tax. In both the design stage and in the implementation stage of our clients’ estate plans, we consider the impact of transfer taxes. As part of this, we routinely assist executors and trustees with the preparation and filing of federal estate tax returns, including advising individuals regarding beneficial tax elections, post mortem planning techniques, IRS and state Departments of Revenue standards and procedures, and valuation of property to be included on the return.
Trust Administration – Administering a trust can involve various and complex challenges. Trustees must manage assets for the benefit of the beneficiaries, make decisions regarding when and how to distribute assets according to the trust’s terms, and maintain the trust’s financial records. We guide and assist Trustees to administer the trust efficiently by coordinating with the Trustee and other professional advisors, including financial advisors and accountants. We will review trust documents and advise the Trustee of their powers and duties according to the trust’s terms and applicable law.