Articles

Pitfalls of Last Minute Prenuptial Agreements

I have recently had an onslaught of clients who are coming in to negotiate their prenuptial agreements merely days before their wedding. While there is technically nothing wrong with this approach, it brings an extra level of stress to both sides and may result in hasty decisions, both of which could be avoided with a little advanced planning...

Lessons from Robin Williams' Estate

By all accounts it appeared as if Robin Williams had his affairs in order when he passed away this last August. He had trusts set up for his children and his new wife of just three years, specifying the property that would fund these various trusts. However, just days after his death, the blended family that Williams left behind began disagreeing over the disposition of his estate - mainly personal property items...

Utilizing your Annual Gift Tax Exclusion

Generally, if you make a gift to someone, you, as the donor, are responsible for paying any gift taxes that may be due on such transfers or for filing any returns (where taxes are not due). However, any gifts that are within the "annual gift tax exclusion" do not require the filing of a gift tax return...

Is Probate Necessary?

Your spouse has just passed away and you are the sole beneficiary of his estate under his Will. In fact, all of your accounts are titled "joint with right of survivorship," you are the beneficiary of all of the non-probate assets (e.g. IRAs, 401Ks, life insurance), and you bought your home together when you married and are both on the deed...

Once Same Sex Marriages Become Legal In Texas, Then What?

It seems inevitable that same-sex marriage will become legal in Texas at some point. Just today, a District Court Judge in Travis County, Texas issued an order allowing a same-sex couple to marry. This historic event came only a day after Probate Judge Guy Herman ruled the ban on same-sex marriage was unconstitutional. So, what do you do once you have the right to legally marry your same-sex partner in Texas? Below are a few items that should be on your short list...

Potential Landmines in "Simple" Business Contracts

You have just gotten a call from a big client you have been trying to land for months. They are finally interested in your services, but they are tentative about the relationship and aren't sure they want to commit for the long term just yet. They propose that you all enter into an agreement for the short term to govern your relationship until you can figure out all of the details. They send over a "simple" Letter of Intent for you to sign...

"Stepped-Up Basis" --- What is it anyway?

If you have read the newspaper or listened to the news at all lately you have heard the term "stepped-up basis." This is a phrase that frequently comes up in probate, estate planning and inevitably in conversations about taxes in general. Recently it has been the subject of much discussion surrounding President Obama's new tax proposals. So what is it...

Should Your Rental Property Be in an LLC?

The real estate downturn that hit the rest of the country has seemingly had little (if any) effect on the market in Austin, Texas. People here seem to be not only buying new houses or remodeling their current homes, but they are also investing in real estate as a way to supplement their income or plan for retirement. I get several calls a week from people who want to know whether they should set up an entity to hold their "non-Homestead" real estate (usually rental properties) or whether they should manage the property along with the rest of their personal assets...

Lessons from a Will Contest?

When I talk to clients about their family dynamics and relationships during a meeting for Will preparation, 99% of them all say the same thing "oh, our family isn't one of those that would fight over money or things... we ALL get along... we don't have much anyway." What about the relationship with your new spouse and your children from your first marriage? What about the sibling rivalry that you told me about in passing during our initial meeting? What about the fact that you are giving Son Sam your house and Daughter Debbie a few checking accounts...

Do You Need a Pre or Post Marital Agreement?

Most people think only the rich and famous need these fancy legal documents. Just turn on Extra or E! and you are likely to hear about the latest celebrity who either has a premarital agreement or who needs one! The famous May-September romance between Anna Nicole Smith and J. Howard Marshall certainly could have benefited from a well-drafted premarital agreement - saving Mr. Marshall's heirs millions...

Top 5 Reasons you Need a Living Trust

At least once a week I have a client or friend ask me if they need a Living Trust instead of a Will. Here are the top 5 reasons that you need a Living Trust as your main estate planning document...

What's in a Name?

Think you have a great name for your new business? Don't rush out and file your Certificate of Formation with the Texas Secretary of State just yet. Follow these steps first to save time and money...

Due Diligence - Your Best Friend in Any Deal

Austin seems to be a buzz with individuals and small businesses investing in and buying existing companies. The clients that I visit with about potential investments sometimes are so excited about the deal that they forget about the "due diligence" portion. Below is an extensive list of areas/documents that should be reviewed before you sign off on any deal. Having an attorney, CPA and financial advisor are also key...

Having the Uncomfortable Talk... ...with your Parents

Not unlike the talk that most of us dread, but realize we must have with our pre-teens about the "birds and the bees," getting the nerve to ask your parents about whether they have a Will and other estate planning documents in place can be debilitating for many of us. Unfortunately, this talk is just as important as the age-old discussion about the "birds and the bees"...

Common Mistakes - Forming your Texas Business

This is a short list of mistakes that I have seen clients make before they hire an attorney to assist them in starting their business.
Paying for a Domain with the name you want to use and investing in other marketing materials before confirming with the Texas Secretary of State that your name is available for use.
I have had many clients come into my office with their domain secured, signage and other...

Portability Extension - Don't Miss It!

The Tax Relief Act of 2010 allows surviving spouses of decedents dying in 2011 or subsequent years to elect to use the decedent's unused exclusion amount and add it to the surviving spouse's exclusion amount. This allows for a greater amount of the surviving spouse's estate to pass tax-free. The ability to transfer the deceased spouse's unused exclusion amount is known as "portability." Portability was made permanent in 2013. In order for a surviving spouse to take advantage of portability, he or she must file a timely Estate Tax Return...

Charitable Planning: Now or at Death

There are numerous ways you can give during your lifetime or beyond to charitable causes that are important to you. This newsletter will only touch on a few of those planning techniques. Two of the easiest ways to make a charitable gift at your death are: 1) designating a charity as a beneficiary of your non-probate assets (e.g. to receive part or all of your life insurance proceeds or remaining principal in retirement, brokerage or financial accounts); and/or 2) making a specific, general, percentage or residuary bequest to a charity in your Will or Revocable Living Trust...

Texas Limited Liability Companies: On the Rise

Limited Liability Companies seem to be the entity of choice for the majority of people establishing new businesses in Texas these days. In fact, there were 110,876 Certificates of Formation for LLCs filed with the Texas Secretary of State last year. There were less than 30,000 filings for other types of for profit entities. Why have LLCs become so popular in the business and estate planning worlds...

What Happens If You Don't Have a Will?

Many people believe if they are married that they don't need a Will because their spouse will take all of their property at their death. This may or may not be true. For example, if you have children from another marriage or previous relationship, those children (your descendants) will own a portion of your separate property as well as your community property at your death. If you have made no alternative provisions and have done no planning, many times the surviving spouse ends up owning property with children that they may or may not have had a relationship with during their life...

What is a Will?

A Will is a legal document that allows you to prepare for the disposition of your property at your death. There are many considerations to take into account when preparing your Will. In preparing your Will you will need to determine what assets you have, who your beneficiaries are, appoint Guardians of your minor children and nominate Trustees and Executors.
First, it is important to understand that only "probate" assets pass through your Will. A "probate" asset is any asset that does not pass through a beneficiary designation...

Choosing a Guardian for your Minor Children

Choosing a Guardian for your minor children is not an easy task. In talking to friends, family and clients the primary reason for the delay in handling such an important affair is the simple fact that they struggle with deciding who to appoint.
Let's face it, the reality is, no one is going to be you. It's hard to imagine anyone (other than you) would ever be good enough to raise your children. However, wouldn't it be better to at least have some control over this decision...

Four Documents Every College Student Needs

Many of you probably sent your children off to college this past fall. Before you left you stocked their refrigerators with food, made sure they had their books, health insurance card, transportation and their cell phone handy to call you in case of emergency. What a lot of parents don't realize is if they do get that dreaded call from the hospital or need to access their child's bank account, they have no legal rights to do so unless the child has executed documents granting their parents these rights. Every college student should have a minimum of four legal documents before they head out on their own...

The Medicare Surtax

Most of us are aware of the new federal income tax and federal estate tax rates that were enacted this January and that took effect in 2013. However, fewer are aware of the 3.8% Medicare Surtax on Net Investment Income ("NII") that was enacted as part of the Affordable Care Act. This new Surtax applies to individuals, trusts and estates. Whether this tax applies to you is based on two factors: 1) you meet certain minimum income level requirements; and 2) you have property that qualifies as NII...

Confessions of an Estate Planning Attorney

I feel like the heart surgeon you see outside the ER stealing a smoke on her break....what is my dirty little secret? My estate planning documents, including my Will, are over 8 years old and outdated. I advise all of my clients after they sign their estate planning documents to revisit their documents at least every five years (no matter what), but earlier in the case of: divorce, marriage, births, deaths, inheritance, changes in financial positions...

DIY Wills - Why Not?

Many times at the end of a consultation or during a conversation with a friend I get the question - "Why can't I just use one of those online programs (e.g. Legal Zoom, etc.) to draft my Will and save money?" As a mother of three and solo practitioner, I can appreciate the desire to save money. However, as an attorney, the ease with which non-attorneys can misinterpret these "plug-in" online documents makes me very nervous. It seems that you can purchase any legal document that you need online for the equivalent of a decent meal these days...

Customized Business Documents - A Must for Any Successful Business

You filed your Certificate of Formation or Articles of Incorporation with the Secretary of State. So now you are ready to do business, right? Not so fast...
First, will you be doing business under the exact name that you filed with the Secretary of State in your Certificate of Formation or Articles of Incorporation? If not, you need to file a D/B/A ("doing business as") with the Secretary of State and with the county in which you are regularly conducting business. Before you can file the D/B/A, you must do a search of the county...

Don't Use the Form!

Did you know that you can provide for your religious and philosophical preferences in your medical directives? Yes, you can! In your Medical Power of Attorney and your Directive to Physicians (a/k/a your "Living Will") you can provide detailed instructions regarding how medical care and end of life decisions should be carried out by your agents and your physicians in the event you are unable to express your intentions yourself...

What is Probate?

The word probate refers to the court process by which a Will is deemed valid or invalid. Unlike other states, in Texas, the "probate process" is relatively simple, quick and cost effective. So, what does it entail? After your death, the first thing that your loved ones will need to do is locate your Original Will. It is extremely helpful to those tasked with this job that they have access to your Original Will. If your Will is held in a safety deposit box at a bank or other institution...

Top 10 Reasons You Need a Will

You have minor children.
Provide for the smooth transition of your children at your death by naming Guardians of their Person (those people who will physically take care of them) and of their Estates (those people who will take care of their property)...