Greg Thomas is devoted to assisting his client with estate planning, probate, guardianship, wills and trust needs throughout Texas including Houston, Dallas and San Antonio.
To speak to an attorney, call 214-748-0226 or contact us. We offer home and hospital visits.
Thomas has the knowledge and expertise to either help plan the future of an estate or determine the best way to care for an aging parent. If you have lost a loved one, he can guide the estate through the Probate Court or provide professional advice on the establishment of a guardianship or the validity of a will. Greg Thomas strives to provide information and expertise in the following areas:
What type of Wills are available to me?
Here's a brief glossary of terms used in the law for various kinds of wills:
Simple will. A will that just provides for the outright distribution of assets for an uncomplicated estate.
Testamentary trust will. A will that sets up one or more trusts for some of your estate assets to go to after you die.
Pourover will. A will that leaves some of your assets in a trust that you had already established before your death.
Holographic will. A will that is unwitnessed and in the testator's handwriting. About 20 states recognize the validity of such wills.
Oral will (also called nuncupative will). A will that is spoken, not written down. A few states permit these, the State of Texas does NOT.
Joint will. One document that covers both a husband and wife (or any two people). These are often a big mistake.
Living will. Not really a will at all--since it has force while you are still alive and doesn't dispose of property--but often executed at the same time you make your will. Tells doctors and hospitals whether you wish life support in the event you are terminally ill or, as a result of accident or illness, cannot be restored to consciousness. See chapter twelve.
When should I change my will?
Here are some events that should nudge you toward making a new will and reviewing beneficiary designations you've made for insurance policies, bank accounts, and retirement accounts.
You get married. In most states, your spouse is legally entitled to claim a percentage of your property after you die, unless you have a written agreement to the contrary. If you don't want to leave at least half of your property to your spouse, see a lawyer.
You are unmarried, but have a new partner. Without a will or alternate estate plan, such as a living trust, your partner will inherit nothing.
You get divorced. In most states, a final judgment of divorce (or an annulment) revokes any gift made by your will to your former spouse. But in some states, it doesn't. So no matter where you live, you should make a new will after a divorce.
You have a new baby. You'll want to make a new will to name a personal guardian for the new little one. This is the person you want to raise your child in the unlikely event that neither you nor the other parent was available.
You have new stepchildren. Unless you legally adopt stepchildren, they have no right to inherit from you in most situations. If you want to leave them a share of your property, you should adjust your will.
You acquire or dispose of substantial assets, such as a home. If you leave all of your property in a lump to one or more people or organizations, there is no need to change your will as what you own changes. But if you've made specific gifts of property that you no longer own, you'll want to avoid leaving the intended beneficiaries out in the cold. (If you no longer own the property, the beneficiaries are probably out of luck; they won't get anything in lieu of it.) Likewise, if you obtain new property and you want to leave it to someone specific, you'll need to change your will to make your wishes clear.
You're married and move from a community property state to a common law property state, or vice versa. Community property and common law property states view the ownership of property by married couples differently. This means that what both you and your spouse own may change if you move from one type of state to the other. Of course, if you plan to leave all or the bulk of your property to your spouse, its official ownership status isn't important, and it's not necessary to change your will.
You change your mind about who you want to inherit a significant portion of your property.
Who needs a trust?
Parents with Young Children
If you have young children, want to assure a good education for them, and will have enough assets to do so after death (including life insurance proceeds), you should consider setting up a trust. The trustee manages the property in the trust for the benefit of your children during their lifetime or until they reach the ages that you designate. Then any remaining property in the trust may be divided among the children. This type of arrangement has an obvious advantage over an inflexible division of property among children of different ages without regard to their respective ages or needs. Trusts are more flexible than giving outright gifts to minors in your will (which requires a guardian) or a gift under the Uniform Transfer to Minors Act, which requires appointment of a custodian and transfers of property to the child at age 18. Issues to consider when setting up a trust for the benefit of your children:
One trust or many? Most people will set up one trust that all the children can draw on, until they've completed their educations (or reached an age by which they should have done so). Then the remaining principal is divided among them equally. This permits the trustee greater flexibility to distribute ("sprinkle") the money unequally according to need; for example, one child may choose to pursue an advanced degree at an expensive private university, while another may drop out of community college after a semester. Obviously, they will have different educational expenses.
Where very young children are involved, it's especially important to build in some flexibility; who knows if a two-year-old may turn out to need special counseling or education by the time he turns five or six?
There are two philosophies about what to do if there's a disparity in ages among the children. One theory is that the older children have already received the benefit of the parents' spending before they died, so the trustee should have authority to make unequal distributions in favor of the younger children to compensate. The other camp, by contrast, thinks it better to establish separate trusts, so that the older children don't have to wait until they're well into adulthood before the trust assets are distributed (which usually happens when the youngest child reaches majority age). You'll have to decide which course is best for your family's circumstances.
Generally speaking, the less money you have to distribute, the more likely you would put it all in one trust. Since there is a limited amount of money, you want to pool it to be sure that it goes for the greatest need. On the other hand, if equality is your primary consideration and there's plenty of money available to take care of each child's likely needs, then you may want to set up separate trusts for each child, to assure that each gets an equal share.
What should the assets be used for? You can specify that the trust pay for education, health care, food, rent, and other basic support. Given life's unpredictability, however, it's often better to write a vague standard (e.g., "for the support of my children") into the document and allow the trustee the discretion to decide if an expenditure is legitimate. Such a provision also gives the trustee flexibility. For example, if one of your children has an unanticipated expenditure, like a serious illness, the trustee could give him more money that year than the other children.
When should the assets be distributed? Some parents pick the age of majority (18) or the age when a child will be out of college (22 or so). If all the assets are in one trust that serves several children, you would usually have the assets distributed when the youngest child reaches the target age. If you have separate trusts and a pretty good idea about each child's level of maturity, you can pick the age that seems appropriate for each one to receive his or her windfall.
If you don't know when each child will be capable of handling money, you can leave the age of distribution up to the trustee (and risk friction between the trustee and the children), have the trustee distribute the assets at different times (say, half when the first child turns 25 and the rest when the youngest does so), or just pick an age for each child, such as 30.
Like any trust, a children's trust costs money to set up: lawyers' fees for creating the trust, fees for preparing and filing the separate tax returns required, and so on. For families of limited assets, it might be best to give the money via a custodial account under the Uniform Gift to Minors Act or the Uniform Transfers to Minors Act.
People with Beneficiaries Who Need Help
Trusts are especially popular among people with beneficiaries who aren't able to manage property well. This includes elderly beneficiaries with special needs or a relative who may be untrustworthy with money. For example, if you have a granddaughter who has been in a juvenile detention center, it may be a good idea to require her to obtain the money at intervals from a trustee instead of giving her a gift outright in your will. A discretionary trust gives the trustee leeway to give the beneficiary as much or as little he or she thinks appropriate.
Another type of trust is for improvident beneficiaries a spendthrift trust. It's simply a trust in which your instructions to the trustee carefully control how much money is released from the trust and at what intervals, so you can keep an irresponsible beneficiary from the temptation of getting thousands of dollars in one stroke. You can stipulate that the trustee will pay only certain expenses for the beneficiary--those you (or the trustee) consider legitimate, such as rent and utility bills. In a spendthrift trust the beneficiary cannot assign his or her interest in the trust, and creditors of the beneficiary can't get at the principal in a trust, but can make a claim (if it's otherwise legal) on whatever income the beneficiary receives. Spendthrift provisions raise a number of tricky questions and should be used cautiously--your lawyer can tell you whether such a trust is right for your situation.
People Who Own Property that is Hard to Divide
Trusts help you transfer property that's not easy to divide evenly among several beneficiaries. Suppose you have a little vacation cottage on the Cape, and four children who each want to use it. You can pass it to them in a trust that sets out each child's right to use the property, establishes procedures to prevent conflicts, requires that when the property is sold the trustee divide the proceeds evenly (or unevenly, if some children aren't as well off as others), and sets up a procedure by which any child may buy out another's interest in the cottage.
People Who Want to Control their Property Because of Family Dynamics
Through a trust, you can maintain more control over a gift than you can through a will. Some people use trusts to pass money to a relative when they have doubts about that person's spouse. For example, you love your son, but don't trust his wife, Livia. You're afraid she'll spend the money you give him on astrologers and shoes. Leave the money in trust for your son instead of making a direct gift to him, and you can direct that he get only the income, so neither he nor his wife can squander the principal. In many states, if you leave money in trust to your son, Livia can't get at the assets if they divorce. Moreover, he can choose how much, if any, of the trust income or principal to leave Livia; if she hasn't been a good and faithful companion, he can leave the whole thing to whomever he desires.
People Concerned About Estate Taxes
Trusts are very useful to people with substantial assets, because they can help avoid or reduce estate taxes. For example, by establishing a trust for their benefit, you can make tax-free gifts (up to the limit allowed by law) each year to your children or grandchildren during your lifetime, even if they're minors. This will reduce your taxable estate and save taxes upon your death. A properly drawn trust may also reduce estate taxes by utilizing the marital deduction or avoiding the generation skipping tax.
ABA Guide to Wills and Estates
Copyright 1999, 2000, 2002 American Bar Association