Monday, September 19, 2016

Have Children from a Prior Relationship and You Don't Have a Will? Why That's a Bad Idea....

If you are currently married and have children from a prior relationship or marriage, you should have an estate plan! 


If you were to die, without a will, Texas law will decide who gets what, and in what amount. And that can be bad.

Understand this: if you have children from outside your current marriage, and you die without a will, your children from your prior relationship/marriage will inherit certain amounts of your property. That is Texas law.

But they may not inherit exactly what you would want them to inherit.

And all of this could come as a surprise to your current spouse. It may also create a hardship for your current spouse, who is relying on the property you own to make ends meet after you are gone.

Specifically,  your children from a prior relationship will inherit 2/3 of your separate personal property, your 1/2 interest in the community property you own with your current spouse, and the "remainder" of your real estate. (as a practical matter this means that your spouse gets to use your home for his/her life but then it goes to your children. It also means that your children will inherit some of the "community property" which your spouse may think of as his/hers).

If you have a family who knows each other well and has each other's best interests at heart, this may not be a problem.  BUT, if they have an uncertain or outright antagonistic situation, this could be a huge problem.    If your children are adults, there could be hurt feelings or even worse, a court battle which eats up the assets.  If your children are minors, then you will leave your current spouse in an uncomfortable position of having to deal with your ex to defend property which your current spouse already considers to be his/hers while grieving your loss. If your ex is still bitter over your breakup that is even worse!

Planning a will in a step-family situation is often an emotionally-charged issue which is avoided or met with dread.

It requires careful balancing between different interests.  How much, if anything, should your children receive? How much does your spouse need? Should all of your separate property go to your children? Are there any pieces of property which are part of a family legacy that your children should have?  Is some of your property technically "separate" but without the help of your current spouse it would not have the value it has today?

If there is a family business involved and various family members are relying on the income it can be even more tricky and require some additional business planning as well.

An experienced attorney who understands all of these issues can help guide you on a clear path.  And that's good!

Family Law, Wills, Powers of Attorney & Estate Planning

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Monday, September 12, 2016

Financial Recovery from Catastropic Illness

If you or a loved one has had a major illness, you may find that you have a confusing array of medical bills left after the illness. Getting the paperwork organized so that you know what you are dealing with will help reduce the stress.

Here are steps that you should take to regain control:

  1. Organize your bills.  Get control of the paperwork by grouping the bills in a way that makes sense to you, for instance, by in-patient facility, health care provider or by month.  Get folders and label them so that you can easily see what is in each folder.
  2. Organize your payment information.  Gather information from your checkbook, cash receipts, or credit cards so that you will know what has been paid, to whom, and when.
  3. If you have insurance, collect your EOB (explanation of benefits) documents and put them in order. You can either put them in date order or put each document next to the medical bills that correspond to them.
  4. Audit the medical bills.  Check to be certain that you have been given credit for any payments made. Make sure that the health care provider has given you credit for any participating plan reductions ("negotiated or allowed" amount of fee).  Do this by comparing your payment information and EOBs to the medical bills. 
  5. Ask for an itemized bill.  Audit the bill for accurate dates or double charges, and ask questions if you don’t understand a charge. Remember, unintentional mistakes are made, even with computer-generated bills.
  6. If you have insurance, make sure that you are getting the benefits that your plan entitles you to have. For instance, if you see that you have been billed a higher co-payment for being “out of network”, but you don’t believe that is accurate, call and speak with your insurance company.  In some situations, you may be able to have the charges reconsidered and paid at a higher rater (for instance, if it was an emergency or if there was not an in-network provider available).
  7. Talk with the hospital or provider to inform them of the “big picture”.  If you have several thousand dollars in medical bills because of a catastrophic illness you may be able to receive a reduction in the bills or a payment plan.  Some facilities have specific guidelines for situations in which there has been a catastrophic illness, or there is little or no insurance coverage.  Telling your story and sending small regular payments may prevent your bills from going to a collection company.
  8. If you are the surviving spouse and are looking at “last illness” bills, you may want to have a legal consult. A probate attorney can assist you by helping you plan how to pay the bills and manage the funds of the estate.
  9. Seek professional assistance from an attorney if you need help with understanding your insurance contract, debtor/creditor law, formulating a plan for paying your debts or other legal aspects of your situation.
Editor's Note: this post was originally published on December 29, 2010 and has been updated for accuracy and comprehensiveness. 

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Tuesday, September 6, 2016

What to Bring to a Will Consultation

So you are finally going to get your will done. This has probably been something that has been placed on your "to do" list and moved to the bottom time and time again.

Once you have finally decided to proceed, you've called the estate planning lawyer and made the appointment.  Now, what to bring to the appointment?

  1. Option One: nothing but a notepad.   If you have never had a will before, only want to chat and get advice and have a general idea of what you want to do, you can bring "nothing" to the appointment. 
  2. Your old will.   If you have a current will and think it would be helpful for the lawyer to see it, bring it (or a copy of it) to the meeting.
  3. Your notes/list of what you want to accomplish, and any questions you have. This may help you stay focused during the meeting, but it is not necessary to create this list for the lawyer.
  4. Concerns, if any  If you are heavily in debt, unsure about whether or not something is titled in your name, worried about an heir who has a substance abuse problem, etc., then bring the details of your concerns. 
After the appointment, your lawyer will give you specific forms to fill out.   You will be asked to provide; the full names of your spouse and children, the names of your beneficiaries, executor(s), and trustee(s).  You will be asked about the items and assets in your estate.  You will be asked to specify in writing "who gets what".  Take care in filling out these forms because they will be used to draft your will.  

It is perfectly fine to arrive at the law office with no clear idea of how you want your will to read. The consultation appointment is meant to help you make decisions, and help make your planning easier. 

Family Law, Wills, Powers of Attorney & Estate Planning

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Monday, August 29, 2016

I'm too Young to have a will.... aren't I?

Most people in their twenties do not consider getting a will to be high on their list of priorities.   That is understandable.  However, there are many reasons why you should consider having a will.  Here are the most important ones:

  • You have a child (whether the child lives with you or not)
  • You have any assets (even a bank account, car, or personal items)
  • You have debts and they could be negotiated (naming an "Executor" in your will means that this person may get court authority to negotiate with creditors and preserve assets for family)
  • You want someone other than your family to inherit from you (Been living with your significant other for years with no "legal" status to your relationship? He or she may get nothing and have to fight your biological family for what you purchased together)
  • You don't want your money to go to the state's Unclaimed Property Division because no one has legal authority to get it.
  • Your situation may change (sure, you may have more debts than assets now, but what if that changes in a few years?)
  • You have rights in any part of a business or joint venture (even a side-business with assets and customers)
  • You've worked hard to get where you are and want to have the ability to make your wishes known. 
You may assume that if you were to die, that your assets would automatically go to certain people. But, it may not be that easy. Having a will allows a judge to appoint your Executor to gather the assets and debts.  There is a court order and the banks and creditors have to respect and follow it, which means that they need to release information and funds when properly requested to do so. 

If you have debts, and debts > assets, it is true that your loved ones may decide not to probate your will, and may just let things alone. But, not always.  

A consultation with a wills attorney can give you the information that you need to decide how to deal with your own particular situation. 

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