Why You Need a Will When Purchasing a Home

I am often asked when is it a good time to get a Will. There are many life events that may trigger the need for this planning, such as marriage, divorce, births, retirement. One of the biggest reasons to get a Will or to update your Will is when purchasing a home or real property.

Especially in Texas where we do not have joint tenancy (property ownership whereby the property would pass via rights of survivorship to a joint owner), it is critical to have a Will or trust created to ensure that your home will pass to who you choose. Even if you co-own your home with your spouse, he or she does not have automatic rights to inherit your share if you should die. In the case of blended families, in fact, your share would actually go to your children from another marriage rather than to your current spouse.

I often see the mistake for couples who’ve been married for years when one spouse passes away, the survivor does nothing about transferring ownership to him/herself. So long as you stay in the home, pay the mortgage and the taxes, no one is going to tell you that the title to your home isn’t clear. It usually is when the survivor passes away that the adult children discover that they not only have to handle the estate of their recently deceased parent, but they have to jump through hoops to clear the title from the first parent.

Bottom line, buying a home is one of your most important investments. Do not leave it to chance, or the default laws of Texas, to determine what happens to your home without careful planning.

Click here for our informational video!

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7 Reasons YOU Should Get Your Will Before the End of the Year!

1. Increased holiday travel, unfortunately, increases the need for power of attorney and other emergency planning.

2. Many have more time during the holidays to finally schedule a meeting and get their affairs in order.

3. The holidays are an excellent opportunity to talk to your family about these decisions.

4. It’s a lot simpler and quicker than you think to get this vital planning in place.

5. Your Will is a great way to provide charitable giving that is top of mind during this time.

6. It’s your last chance to have peace of mind before it becomes another New Year’s Resolution.

7. If you don’t have a Will, the state of Texas has one for you!
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The Myth of the “Simple” Will

I often get inquires about people who just “need” a “simple” Will. I am always curious as to what people perceive as “simple”. Do they think their family isn’t complicated? They don’t have many assets? They don’t want to spend a lot of money? Regardless of the reason, I am here to tell you that there is no such thing as a simple Will!

I know some believe that only those with a high net worth need the time and attention of a well-crafted Will or trust. Nothing could be further from the truth. In fact, the mechanics of how your estate is distributed is quite often the same regardless of how much money or property you own. More often than not, the ease of distributing your estate comes down to the way your Will is drafted or executed. A great example is a few years ago when a woman came in after her father passed away. He had created a Will online because “all” he had was a house, investment account, and a car. He wasn’t married and wanted to leave everything to his two adult children. Simple, right? Before I even reviewed the language of the Will, I noticed that her father and each of the two witnesses all signed on different days! Why? Because no one was there to guide them. My client asked if that was a problem and I had to gently tell her that it was a huge complication in that the Will isn’t valid. At all. She asked if we could at least show it to the judge, but the answer is no. If a Will is not properly signed and executed, it’s as if it never existed. Instead, we had to go through a lengthy heirship determination through an attorney ad litem. This took a great deal more time and a lot more money to settle this “simple” estate.

Some also believe that if their family isn’t complicated, then their Will should be as equally uncomplicated. This is one of the biggest mistakes I see parents of minor children make. Many families will assume everything will fall into place automatically and/or everyone will work it out. One of the best examples I can give is when it comes to beneficiary designations on life insurance, retirement, and brokerage accounts. I’ve had clients who felt like they either didn’t need a Will or, again, could just do a form online. What they are missing is the advice and planning outside of the Will, particularly with beneficiary designations. Did you know that your beneficiary assignments on these assets override anything a Will states? To make matters more complicated (or should I say less “simple!”), you absolutely should NOT name minor children as a beneficiary EVEN if you have a Will that establishes a trust for them. Unless your beneficiary is coordinated to actually feed into that trust, those assets will be tied up by the financial institution that holds them and a court will have to designate a custodian for the funds, which will be distributed to the child at age 18! I have yet to meet a parent who thinks 18 years old is a good time to have a chunk of money handed to a child. How can this be avoided? By realizing that even the simplest of circumstances require careful and thorough planning with a professional.

Finally, I believe many say they want a “simple” Will because they do not want to spend a lot of money. Now, I understand that; however, a friend of mine likes to say “cheap gets very expensive.” Just look at the example above about the man who didn’t have his Will witnessed properly. The cost and time it took to sort that out far exceeded what he would have spent if he had seen a qualified Wills & trusts attorney. One of the reasons I spend so much time educating families and individuals is to help them see the true value in creating a solid estate plan regardless of how “simple” their life and assets seem. In this consumer age where people don’t think twice about dropping thousands of dollars on the newest flat screen TV, fancy jewelry, or lavish vacations, I’m amazed that they don’t see the same value to those dollars when it comes to protecting their family from a reality that WILL face them…unless you’ve figured out a way to cheat death. I realize that is not nearly as fun to contemplate as buying the newest thingamajig, but I think everyone will agree that it is exponentially more important.

Does this mean you have to spend a lot of money to have advanced estate planning? No! But no matter your circumstances, it is worth taking a little bit of time and seeing the value of working with an attorney who can guide you in putting a plan in place so you can have peace of mind that you won’t leave your family in a bind when your time comes.

Life isn’t simple and neither is your Will!

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Why a Will is Not Enough

Did you know that most of your estate may not even be controlled by your Will? One of the biggest mistakes I see people make is that they do not realize that much of their money and assets will not be controlled by their Will. When you designate a beneficiary on assets such as life insurance, retirement accounts, and annuities; those designations will override whatever you stated in your Will.

For example, if I have named my mother as the beneficiary of my life insurance, but my Will states that all of my estate should pass to my sister; my mom WILL receive my life insurance and my sister will receive other assets such as my home, car, and personal property.

Therefore, it’s important to work with your attorney and financial planner to ensure your beneficiaries are up to date and worded correctly. That doesn’t mean you will name the same beneficiaries as in your Will; the point is you need advice to help guide you to best accomplish your wishes. Furthermore, you do NOT want to name minor children as a beneficiary on these assets even if you have a Will that creates a trust for them. Rather, you want to direct your beneficiary to your Will with the trust (or a living trust). Alternatively, if you do not have a Will, this is the perfect opportunity to see an attorney to draft this vital planning and assist you with the proper beneficiary designations.

If you don’t have a beneficiary named, or if the beneficiary named is your “estate,” or if all the beneficiaries predecease you, then those investments will be paid to your estate and pass under your Will (if you have one). Please get legal advice before naming your estate as a beneficiary for any assets so that you can fully understand the ramifications.

Certain bank and brokerage accounts will also pass outside your Will. For instance, payable-on-death accounts (sometimes called “POD” accounts) will be distributed to the named beneficiary. Additionally, accounts set up by one or more persons as joint tenants with rights of survivorship will pass to the surviving account holder or holders. Not all joint accounts pass to the survivor. When joint accounts are set up as tenants in common, the portion of the account that was owned by the decedent passes under his or her Will.

You may find that most of your estate consists of non-probate property. Therefore, it is extremely important to coordinate the beneficiaries of all these properties to make certain your assets will be distributed as you want when you pass away.

 Conclusion: A Will is not enough to ensure that your final wishes are carried out and that your loved ones are properly cared for. Therefore, make sure you seek legal advice to assist you with this vital planning, because if you don’t do the planning, the state of Texas will do it for you!

For more information, check out our 4 minute video: CLICK HERE!

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3 Reasons NOT to Draft Your Will Online or With a Will Kit

  1. Much of your estate may not even be controlled by your Will. Did you know that when you designate beneficiaries on assets such as life insurance, retirement, bank accounts, and investments that those beneficiaries supersede a Will? So while you think you are covering everything by filling out a “simple” form, you may not even be addressing the biggest chunks of your money. Worse yet, if you have minor children listed as a beneficiary, the financial institution will not consider your Will, instead the court will have to step in and appoint who controls the money and it will be given to your child at age 18…not typically the best age to make money decisions.
  2. The way your Will is signed is just as important as what it says. I am constantly amazed when I review Wills that were drafted through online programs and will kits that they aren’t even worth the paper they’re printed on. Many are under the impression that so long as a legal document is notarized, it is valid. That is not the case for a Will in Texas. There are strict requirements when it comes to the signing, witnessing, and notarization for a Will to be valid. I even reviewed a Will where the individual and two witnesses all signed on different days! Guess what, that is not “witnessing” and that Will was NOT valid. Unfortunately, usually when you find out a Will wasn’t signed properly is once someone has passed away, so it is literally too late to fix it. And the court cannot take into consideration what the Will said. Only a validly signed Will can provide guidance as to who can carry out your wishes and how you want money and property distributed.
  3. What assurance do you have when you’re told that a bank, hospital, or other entity will not recognize your document? I tell my clients that there is the real world and the legal world, and they don’t always match. Sometimes certain entities such as banks or hospitals or even funeral homes will tell you that the document you are presenting is not valid. Perfect example is a Power of Attorney for financial matters. At least once a month, I hear a story where a bank won’t honor a power of attorney for various reasons. If you drafted that Power of Attorney on your own, what would you say? You’d probably walk away because you have no idea and you have no one to call. Now if you had an attorney prepare that document, you’d probably tell the bank “It must be valid and by the way, let’s get my attorney on the phone!” I have had to step in many times to correct misinformation. The peace of mind you have by going to attorney will ensure that your documents has met all legal requirements and you have someone on your side to make sure that your wishes are honored.

Watch Our Video for More Information

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5 Reasons to Get a Will this Summer

1. Getting Married. It’s wedding season and getting a Will (and powers of attorney) is one of the most important steps newlyweds should take. Even though they are married, spouses do not have automatic rights to make medical or financial decision, to inherit property, or even serve as executor.

2. Buying a House. Many will buy a new home this summer and the best (and the ONLY way for the most part) to ensure your biggest investment goes to whom you want upon your death is to have a Will or trust established. That even includes jointly owned property!

3. Traveling. Everyone is hitting the road and traveling this year. In the event of an accident or emergency, you want to have peace of mind that the right people are able to make medical or financial decisions for you, especially if you are out of town.

4. Remember that New Year’s Resolution? The year is over half over, so time is running out to scratch that resolution off your list to finally get your Will put in place. Summer time is a GREAT chance to get your legal documents together before the Fall rush when we all get way too busy. Most people can complete all their planning in under 4 weeks!

5. If You Don’t Have a Will, the State of Texas Has One for You!  There really is no better time to get your affairs in order than NOW! So why not this Summer? Every day you go without a properly drafted, Texas-specific Will, a medical power of attorney and directive, or someone designated to make financial decisions, you are taking a risk of putting your family and loved ones in a terrible bind. It may not be fun to think about, but if you don’t make these important decisions, a judge will and is bound by the default laws of Texas. Don’t let that happen!

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