Denton Estate Planning Law Blog

The Wall Street Journal recently included a story about a family that was faced with the loss that no parents are ever prepared for. Their 25-year-old son died from injuries suffered at the age of 23. He left behind a loving family and three finished years of college.

The loss of a child alone is something most families are unprepared to handle, but the family in this case was left with another difficult hurdle ahead of them. In order to pay for college, their son had taken out a private school loan worth $44,500. And because he was too young at the time to be approved for the loan, his father served as a co-signer on the loan.

More mature adults who have had time to build wealth and/or debt are more likely to leave behind an estate that could take care of their debts, and their wishes regarding paying off debts would be left in an estate plan. But it is uncommon for 25 year olds to leave behind estate plans, so the family in this case was left with difficult matters to handle. 

In numerous posts, we have discussed the importance of choosing financially responsible parties as the heirs, beneficiaries or trustees of an estate. In order to create an estate plan, one has likely worked hard to earn their assets and is, therefore, serious about protecting them.

What some beneficiaries do not understand is that their loved ones did not merely create a will or trust in order for their family members or friends to get a gift to use as they wish. Most creators of estate plans have earned and saved an impressive collection of assets in order to ensure that their heirs will handle the inheritance responsibly and look at the gift with the future in mind.

Citigroup now offers a new feature to the bank's wealthiest members (those who make $25 million plus) that will help them decide who can responsibly handle money. Amy Butte, the creator of the program, expects that wealthy parents will use the tool to learn how their children spend and save money, and Butte also hopes that the program will help parents and their kids effectively talk about finances. 

In October 2009, former Texas attorney John O'Quinn and an assistant from his law firm died in a car accident. Not only has the fatal car accident resulted in a wrongful death case filed by the family of O'Quinn's passenger, but the infamous attorney also left his significant other in a fight over his estate.

O'Quinn created a will before his death. According to sources, however, the plan he had to update the document was never accomplished, and all of his estate was left to charitable organizations. Nothing was left to Darla Lexington, who in the eyes of many, was O'Quinn's wife.

In our July 27th post, we discussed the trusteed IRA and how it basically works to protect your retirement savings and the financial stability of your family when you pass. A recent Wall Street Journal article also covers the potential of trusteed IRAs, but it more thoroughly outlined the possible risks involved with such a trust.

As a refresher course, a trusteed IRA is an estate plan option that means the trust creator passes their IRA savings to trustees without the actual funds coming out of the account. The IRA stays intact and the trust designates the distribution from the account among the trustees.

The most common reasons why a person would create a trusteed IRA is to protect their savings from being taxed more than necessary and to protect their loved ones from irresponsible spending habits. A trusteed IRA does not let trustees go out and spend their money in one place.

Sounds great, but according to the Wall Street Journal, recent court rulings in cases around the country have varied regarding the security of inherited IRAs, which makes careful estate planning all the more important.

A recent article in The Dallas Morning News reminds Texas residents that creating an estate plan not only protects assets, but it protects the well being of friends and family after someone dies. The piece also is a reminder that creating a will is not only beneficial for the wealthy and their beneficiaries, but the preparation of one's estate has something to offer anyone.

For example, money and property are not the only targeted areas when creating an estate plan. They do not even have to be considered (though that might be irresponsible). If someone has a child, especially one with special needs, a will gives parents control to ensure that their kids are left in safe hands of the parents' choosing when they pass. Without that written designation, a Texas court would be left to decide where children belong.

On Monday, we discussed the benefits of including pets in an estate plan and how a pet trust is a good idea for any pet lover, rich or not. The following advice will help you more effectively make arrangements for your beloved pet's future without you:

First and most importantly, work with an estate planning attorney who both understands pet trusts and appreciates a love for pets. Estate planning can be stressful enough without having to justify why you want to provide for your beloved pet.

Many people go home every day and are greeted by the faces that mean the world to them. Sure, it might be the faces of children or spouses, but do not underestimate the importance of a pet's welcoming, eager face.

Dogs, cats and other pets are being treated like family members across the country because, in the eyes of their owners, they bring the love and joy to life that only a family member can provide. The pet/owner bond is growing so strong amongst the population that the public has been left buzzing about recent estate plans that leave large, million-dollar inheritances to pets.

Instead of attacking those unique estate plans and calling them crazy, estate planning experts are bringing to light the logic behind planning for a pet in an estate plan. A smart method to plan for your pet's future should they outlive you is to create a pet trust.

Intestate is an important term in the estate planning field. A person dies intestate if they did not prepare a will, trust, or other estate plan before passing away. Their estate is left in a sort of limbo, which can be problematic for friends and family left to deal with the hassle of figuring out how an estate will be distributed.

According to a Texas source, the following are common consequences of someone dying without an estate plan: