Murphy's Law Blog » guardianship

TOP 5 mistakes in Estate Planning and Probate

Administrator — Tue, 18 Aug 2009 00:47:24 +0000

These are my top five I have seen in doing probate and estate planning.
1. I don’t have enough money for it to matter/Can’t I avoid probate?
There are provisions where you can get sometimes get by without opening an administration but why risk it? If you have debts an administration will be needed. If there is real estate there will need to be an administration. Texas probate is not as bad as you have been told. As much as I enjoyed Bleak House by Dickens where the entire estate was consumed by legal costs, Probate in Texas is much easier. With a properly executed will the duties of the executor are generally simple and not costly.
2. I can do it all myself with stuff off the internet or a form book. You may be able to. However, there are pitfalls in the probate code that flumox even experienced attorneys. Every estate has a different set of needs. An attorney familiar with the process can more effectively draft a plan to accomplish your goals.
3. Failure to account for the entire estate. It’s important to account for everything and understand where it will go under your will. I often draw flow charts to help clients visualize where everything will go. Often, clients will forget collections and personal items that they want to pass on to specific heirs. Do you have jewelry, collections or family heirlooms that you want to pass on? Are there mineral rights or royalties you have forgotten? You should talk to your attorney about these items and plan who will received these assets.
4. Failure to plan for incapacity. This is not a fun area to discuss, but there is a real chance that you or someone in your family may face long term incapacity. There is a court proceeding called guardianship, covered in a previous post, which appoints someone to make decisions for you. A court appointed guardian can handle financial matters, make health decisions and generally take care of the daily decisions that an incapacitated person needs. A good estate plan, however, will include documents appointing persons to handle these duties without the need for court intervention. You can decide who will care for you in the event of incapacity. More important in some families, you can decide who you do not want to make these decisions for you.
5. Failure to have an advanced directive or Living wills. The nation saw what a worst case advanced directive or living will scenario could be like in 2005 with the Terry Shiavo case. End of life decisions that should be personal and private, were debated by the entire nation. In Texas, one can complete a simple form that makes your end of life wishes clear. Had Terry Shiavo had this simple form the controversy surrounding her case would have been avoided. Because of the attention that end of life issues are getting as part of the health care reform agenda, I’ll be covering the advanced directive in greater detail in a later post.

So those are my top 5. I recommend talking about your plan with your attorney and your family prior to needing it. No one likes to think about these matters but planning ahead makes these transitions easier for all involved.

Why Guardianship?

Administrator — Tue, 16 Jun 2009 18:10:04 +0000

A few weeks ago, I spent a Monday afternoon in Galveston Probate court. The island is really coming back and doing great though it has a long way to go. I am consistently amazed by the folks in the Galveston Courts. Judge Burwell lost her house to Ike. Her clerk had to swim out of her house because of flooding from the storm surge. But the Monday after Ike (which hit on a Friday night) they were back in court working hard. It’s been eight months and we’re all starting to get back to some semblence of normalcy. The hearing was a contested guardianship matter. Often it is hard to find anyone willing to serve as guardian of a proposed ward. Care of an incapacitated adult can be rewarding but it is also a hard job. It was great to see two qualified applicants.

It occured to me that there is a need to explain the answer two key questions in discussing guardianship with clients: what is it and why is it needed.

What is a Guardianship? A guardianship is a legal proceeding to appoint an caretaker for an incapcitated individual. There are two kinds of guardianship: Guardianship of the person, with the authority to make decisions regarding where the ward lives and medical care and Guardianship of the Estate which has power over financial decisions. These powers can be split or all vested in a single person. The Guardian must post bond, take an oath and file annual reports. The court will issue Letters of Guardianship which give the Guardian the power to act on the ward’s behalf.
The applicant files an application with the appropriate court. The court then appoints an Attorney ad Litem to represent the proposed ward. The Ad Litem meets with the proposed ward, reviews financial and medical records and generally represents the proposed ward. After a hearing, if there is sufficient evidence, the court may find the proposed ward is incapcitated, that a need for guardianship exists, and that the applicant is qualified to serve as guardian.

When does a guardianship become necessary? Sometimes a person, because of mental or physical condition, is unable to provide food, clothing or shelter for himself or herself; care for his or her own physical health; or manage his or her own financial affairs. After a court proceeding with a finding of a need of guardianship, the applicant is appointed as guardian of the proposed ward with the authority to make decisions for the ward regarding financial and personal matters.
There a couple of ways that a guardianship of an adult can come about. Often the family of an individual realizes that there is a need for help. With the U.S. population aging we are seeing more cases of dementia, Alzheimers and other forms of incapacity. In other cases, Adult Protective Services gets a referral from emergency services such as hospitals or police that an individual needs assistance.
As a family member can’t I make these decisions? No. You cannot walk in to your mother’s bank this afternoon and close her accounts if she does not have dementia, so why would you be able to if she does? There has to be some legal authority for you to handle matters. You can plan ahead by getting a Financial Power of Attorney and Medical Power of Attorney that becomes effective upon incapcity, but often people do not think of this until it is too late. At that point, there is a need for a court proceeding as described above. In a coming post I’ll discuss avoiding guardianship and alternatives to guardianship.

A good resource for guardianship information is the Texas Guardianship Association:
http://www.texasguardianship.org/

Kevin Murphy Law Guardianship Page

Where there’s a will there’s a Lawyer: Estate Planning for the Rest of Us.

Administrator — Tue, 05 May 2009 16:00:33 +0000

I do a lot of wills and other “planning” documents in my practice. Usually, the clients are young couples with children who want to make sure that everything is taken care of. I have had a couple of cases where the client is a person who has recently been given bad news by the doctor. We usually don’t think of wills as something that will be used within the next year but it does happen.
So do you need a will? Most people I deal with are not “rich” by any measure. The typical estate consists of a house with a mortgage, a couple of cars, some bank accounts and retirement. PeopleI often find that clients do much to avoid probate. Bank accounts can be set up as payable on death (POD) or joint tenants with rights of survivorship (JTWROS). Retirement and investment accounts can be set up with a named beneficiary. The question these clients often ask is, “Why do I need a will? If I can transfer all of these assets with a simple administrative form (and NO LAWYERS) why should I go throught the hassle and expense of hiring a lawyer?”

There are a couple of real advantanges to having a lawyer prepare a will and other estate planning documents for you. In Texas, a properly executed will makes the process of transfering assets at death easy and fairly inexpensive. All that is required in a typical probate after the filing of the will is a short prove up hearing, notice to creditors and a return of an inventory, appraisement and list of claims. If you have minor children, a will can include provisions determining who will care for the children in the event of you and your spouse both dying.

If you die without a will there is a long process of administration in which there is an attorney for the estate and at least one attorney for the heirs. You also need to have a proceeding to determine who the heirs are. In a dependant administration of the estate, your attorney must file a motion for court approval of every transfer, sale and expense of the estate. If you have minor children a dispute over guardianship of the children could leave them in limbo for months.

Call today to set up an appointment to discuss getting these important documents prepared for you.