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How Should Your Estate Be Administered?

Probate law in the State of Texas offers two ways to settle an estate: independent administration and dependent administration. To ensure that your own estate in Texas is settled properly after your death, you’ll need the advice and legal help that a Waco probate attorney provides.

What is probate? After a person’s death, probate is the legal process that inventories and evaluates the assets and properties in the decedent’s estate, pays the estate’s taxes and debts, and then distributes what remains of the estate according to the instructions in the decedent’s will.

The way your estate in Texas will be probated depends on your circumstances. Determining which administration method is best for your estate will hinge on several factors, including the complexity and size of the estate.

How Does Independent Estate Administration Work?

With independent administration, an estate’s executor is authorized to make decisions about the estate and is not required to consult a judge while settling the estate. Independent administration must be specified by the decedent’s will, or all of the decedent’s beneficiaries must agree to it.

Because the probate court does not interfere with the executor’s duties, independent administration of an estate is usually faster and easier than dependent administration. An estate’s executor, for example, may sell off properties and settle claims without obtaining court approval.

In the State of Texas, an estate’s executor has considerable legal responsibilities. If you are named as the executor of an estate that will be administered independently, when that time comes, you should be advised by a Waco probate lawyer who will ensure that you understand what the law requires and help you avoid costly mistakes.

How Does Dependent Estate Administration Work?

An estate with dependent administration is supervised by a Texas probate court. The executor of an estate with dependent administration must have the probate court’s approval in order to settle claims, sell off properties and distribute the estate.

If someone dies without a will in Texas, state law provides that the estate will be dependently
administered unless all of the decedent’s legal beneficiaries agree to the independent administration of the estate.
Because dependent administration involves the approval of the probate court, it takes substantially more time than independent administration, and there is more work for the executor of the estate.

Does Dependent Administration Offer Any Advantages?

However, dependent administration does offer some practical advantages to executors and beneficiaries. If an estate is in debt, for instance, dependent administration helps to ensure that the estate’s creditors will receive payment.

Dependent administration of an estate requires an executor’s actions to be approved by the probate court, so if the executor’s actions are challenged, dependent administration gives an executor additional legal protection that independent administration does not provide.

Also with dependent administration, the requirements for documentation and the heightened scrutiny help to protect an estate from disputes and unsubstantiated claims. However, getting a probate court’s approval for every transaction may be quite challenging and time-consuming.

Because there’s so much more work for the executors of estates with dependent administration, the executors of those estates should also have the legal services and advice that a Texas probate attorney can provide.

Have You Prepared a Will?

If you’re an adult in Texas, and if you haven’t prepared a last will and testament, the time to do so is now. Have a Waco probate lawyer help you prepare your last will and testament, and discuss with your lawyer if your estate should be administered dependently or independently.

If you already have a valid last will and testament in place, you may need to revise that document to address the administration of your estate. A probate lawyer in Waco can advise you regarding dependent vs. independent administration and help you make the necessary revisions.

A probate attorney can also help you protect your assets from the probate process. One option is establishing a revocable living trust. Assets that are legally owned by your living trust are transferred directly to your beneficiaries without probate court interference. Your attorney can prepare a revocable living trust and explain your other options for avoiding the probate process.

What Else Should Executors and Beneficiaries Know?

When an estate is large and complicated, or if there’s a dispute among the beneficiaries, probate courts in Texas have the power to impose dependent administration on an estate even if independent administration has been specified in the will and agreed upon by the beneficiaries.

Whether you are the executor of an estate with independent administration or with dependent administration, you may find that your duties and responsibilities can be overwhelming. Do not wait to obtain the legal advice you need from a Waco probate attorney.

Should You Have a Comprehensive Estate Plan?

A revocable living trust or a last will and testament is only one element of a comprehensive estate plan that can protect your properties and assets and provide financial security to your loved ones for years to come.

No one can predict tomorrow, but you can be prepared for whatever tomorrow may bring. Every estate plan is unique, but your own comprehensive estate plan should include a will and/or a trust, a durable power of attorney for financial matters, and a power of attorney for healthcare.

If you have a family, own a business, or have any significant properties and/or assets, you need to begin planning your estate now. The right Texas estate planning attorney can help you begin the process and provide you with the key insights and advice you may need.

Rainey & Rainey – Helping Texans Prepare for the Future

For over fifteen years, the award-winning legal team at Rainey & Rainey has been proud to serve families throughout Central Texas with reliable probate and estate planning advice and services.

An attorney with Rainey & Rainey can also discuss guardianships, living wills, and long-term healthcare planning. We will answer your planning questions, address your concerns, and prepare the legal documents that you need to protect yourself, your estate, and the people you love.

To learn more, to begin the estate planning process, or to obtain the probate, estate administration, or estate planning help and advice you need right now, contact the offices of Rainey & Rainey in Waco at 254-752-8644 or in Georgetown at 512-598-9005.

Can You Ensure Security for a Special Needs Child?

If your child is a special needs child (including an adult or a minor who has a physical or mental disability), it’s right to be concerned about what will happen to that child when you can no longer be a caretaker and parent, but you can ask a Waco special needs planning attorney to help.

If your child has special needs, you should consider setting up a special needs trust with a planning attorney’s help and advice. In Texas, your special needs trust can ensure that your special needs child is cared for properly after your death or if you become incapacitated.

Without a special needs trust (also called a “supplemental needs” trust), your child could become disqualified for public benefits, lose any money that you leave, or even end up being exploited by others. What are the specific benefits of setting up a special needs trust? How does it work?

How Will a Special Needs Trust Benefit Your Family?

Trusts are legal documents that spell out how a trustee of your choice will manage assets for another person. The trustee you choose for your special needs trust should be a knowledgeable and trustworthy individual who is good with details.

Under federal law, you are allowed to keep assets for your special needs child in a special needs or supplemental trust without losing the child’s eligibility for government benefits, provided that the trust satisfies several legal requirements.

If you give or leave assets directly to your special needs child, your child could lose his or her eligibility for public assistance. But if you transfer those assets to a supplemental or special needs trust, your child will receive appropriate care and remain eligible for public benefits.

If your special needs child counts on your financial support, a Waco estate planning lawyer will help you set up your special needs trust and ensure that it is compliant with all federal and state requirements.

What Public Benefits Are Available to Special Needs Children?

In Texas, many people with disabilities or special needs qualify for government benefits. A special needs child may be eligible for programs including but not limited to Supplemental Security Income (SSI), the Supplemental Nutrition Assistance Program (SNAP), and Medicaid.

What can these programs provide? Medicaid pays a variety of healthcare costs for those who are qualified. Supplemental Security Income is available to adults with little or no assets or income. SNAP helps qualified families and individuals with food purchases.

If a special needs child qualifies now for Medicaid, SNAP, or SSI, leaving an inheritance directly to that child could make the child ineligible. Special needs persons are eligible for these programs only when their financial resources and incomes are limited.

How Does a Special Needs Trust Work?

Special needs trusts in Texas provide for special needs children without risking their eligibility for public benefits. The child will not have control over the funds in the trust, which will be owned by the trust and will be managed by the trustee you have named.

As long as you are alive, you can name yourself as the trustee and manage the trust, but you also must designate someone to be your successor trustee and manage the trust after your death or should you become incapacitated.

When a special needs child needs professional, full-time medical care, a Waco special needs planning attorney can establish a trust that maximizes your family’s savings, reduces your family’s costs, and maintains your child’s eligibility for government assistance.

If your own special needs child is a minor, you should also name a guardian for the worst-case scenario – if you and/or the other parent unexpectedly and suddenly pass away. If you don’t name a guardian, a court will name one in that circumstance, but that choice should be yours.

What Else Should You Know About Special Needs Trusts?

Every special needs trust is different. Here are some of the facts you should know when you ask a Waco estate planning lawyer to set up your special needs trust:

1. A trust for a special needs individual must be precisely written. It must clearly state that the trust has been set up for your child’s extra and supplemental care beyond what government benefits provide.
2. Trusts for special needs individuals cannot directly transfer cash to that person. The trustee you name will manage the trust’s spending, and that trustee will pay directly – for example – for your child’s utilities, housing, and healthcare providers.
3. Trusts for special needs individuals are irrevocable, so you can’t cancel or modify the trust without court approval. Special needs trust funds can’t be seized by creditors, aren’t subject to liens, and can’t be lost through lawsuits.

Should You Consider a “Pooled” Trust?

A pooled trust may be the right option for you and your special needs child. With a pooled trust, rather than designating an individual as your trustee, you choose a non-profit that will pool, invest, and manage the special needs trust.

These non-profits maintain individual trust accounts and assign an account manager to work with the special needs individual.

Pooled trusts ensure that special needs funds are managed capably, that your special needs child will receive the proper care, and that the child will remain eligible for government benefits. You should discuss with your planning lawyer whether a pooled trust is right for you and your child.

How Will a Planning Attorney Help You?

Your special needs planning attorney should be an experienced estate planning professional who understands your concerns about your child and your child’s needs. A lawyer can offer guidance and insights, but the final choices about a special needs trust for your child are yours alone.

You and your attorney will review your child’s personal situation, identify the child’s needs, and set up a personalized trust that meets your child’s needs and provides peace of mind about that child’s future.

Choose Rainey & Rainey for All of Your Planning Needs

In order to set up a special needs trust, you’ll need to work with a Texas trust attorney who will help you plan for your loved one’s future. The estate planning attorneys at Rainey & Rainey will provide the help that you and your family need.

Special needs planning is more than merely writing a trust document. Your attorney may suggest options that you’re not aware of. At Rainey & Rainey, our attorneys assist and guide Texas families with every aspect of estate planning and special needs planning.

To set up a special needs trust, to create a comprehensive estate plan, or if you would simply like to learn more, call the offices of Rainey & Rainey now at 254-752-8644 (in Waco) or 512-598-9005 (in Georgetown). Rainey & Rainey works with families throughout the State of Texas.

What is a Deed?

Several types of property deeds are legally valid in the State of Texas. Which type of deed should you create when you sell a property? Which type of deed should you expect when you buy a property? Your first step should be discussing the matter with a Waco estate planning attorney.

A deed is a written document that conveys the legal title to real property. When you sell a property, you usually create a new deed as written proof that you have transferred your ownership rights – your “title” – to someone else. However, not all deeds are alike.

The only way that a buyer takes title to a property is through a deed, but there are several types: for example, “lady bird” deeds and “quitclaim” deeds are two different deeds that accomplish different things. How are lady bird and quitclaim deeds similar? How do they differ? What else should you know about lady bird and quitclaim deeds?

What Makes a Deed Valid in Texas?

Usually, a deed is a document that conveys “title,” the actual ownership of a property. The deed itself is a legal document; title is the legal right of ownership conveyed by the deed.

To be valid under Texas law, deeds must:

1.  be put in writing
2.  be signed by the seller (called the “grantor”)
3.  clearly state any intent to transfer the property
4.  designate the buyer (called the “grantee”) by name
5.  include the property’s legal description
6.  be sent by the grantor and received by the grantee

How Do Lady Bird Deeds Work?

A lady bird deed – a revocable deed that retains a life estate – can give the owner of a property considerable advantages. He or she (the grantor) may transfer the ownership of a property to another party (the grantee) while retaining the lifelong right to reside on, use, or sell the property.

With a conventional life estate deed, as the estate’s holder and grantor, you owe the grantee a duty to maintain the property’s value, and you may not:

1.  mortgage or sell the property unless the grantee consents
2.  designate another grantee without the current grantee’s consent
3.  unilaterally rescind the grantee’s remainder interest and cancel the deed

However, unlike life estate deeds, lady bird deeds may be revised or even revoked by the grantor at any time and without the consent of the grantee. If a grantor did not transfer the property, it passes to the grantee upon the grantor’s death – with no probate court interference.

What Are a Lady Bird Deed’s Disadvantages?

Some title companies in Texas may require signatures of the beneficiaries, when selling a home that has a lady bird deed on it. This is not the way it should work, based on the nature of the Lady Bird Deed, but does occasionally happen. This can often be circumvented, by using a more agreeable title company.

Additionally, lady bird deeds apply only to real property. Other assets in Texas must be handled with a trust, a will, or another estate planning tool. A Waco estate planning lawyer can prepare a lady bird deed as well as any of the other estate planning documents you need.

What is a Quitclaim Deed?

Conventional warranty deeds protect a title from conflicting title claims and ensure that the deed is in fact legal. A quitclaim deed does not provide that assurance. Rather than convey a seller’s interest, a quitclaim merely releases the seller from any claim to or interest in the property.

While a quitclaim deed may be a good option for the transfer of property among family members, in Texas, most insurance companies will not insure homes with a quitclaim deed in the title chain.

In Texas, you should not buy or sell a property with a quitclaim deed without consulting a Waco estate planning attorney. In fact, you should consult an estate planning attorney to advise you – and to protect your long-term interests – whenever you buy or sell real property in this state.

How Can a Lady Bird Deed Help Someone Plan for Medicaid?

Due to skyrocketing nursing home costs and because many insurance companies no longer even sell long-term care policies, Medicaid is the practical long-term healthcare option for a growing number of Texans. To qualify, however, your income and assets cannot exceed certain thresholds.

Equity in your primary residence is usually excluded when your assets and properties are determined for Medicaid purposes, but if you transferred property for less than its market value in the previous five years (the Medicaid “look-back” period), you may not qualify for Medicaid.

However, a lady bird deed can make the difference. Under Medicaid’s look-back provisions, lady bird deeds do not legally establish a property transfer. And as property with a lady bird deed is not probated, it’s also not subject to this state’s Medicaid Estate Recovery Program.

What Else Do You Need to Know?

Whether you plan to transfer your properties and assets to your beneficiaries with a trust, a will, a lady bird deed, or some other legal document, that document should be part of a personalized and comprehensive estate plan that ensures the financial security of your family and loved ones.

In many situations, a lady bird deed is going to meet a property owner’s needs. In some rare situations, a quitclaim deed may be the practical answer. In this state, you have a number of options.

If you’re on either side of a property transaction, have an estate planning attorney explain those options. You’ll need someone with experience, knowledge, and a reputation for legal excellence, but most of all, you’ll need an attorney that you like, you’re comfortable with, and you trust.

At Rainey & Rainey, We Help Our Clients Plan for the Future

We don’t know what will happen tomorrow, but we can be prepared for it. At Rainey and Rainey, a Waco estate planning lawyer will help you plan for the future, protect your interests, and make sure that your family has security in the years ahead.

If you are in or near the Georgetown, Austin, or Waco area, reach out to the offices of Rainey & Rainey to prepare:

1.  a lady bird deed, quitclaim deed, or another property deed
2.  a medical or financial power of attorney
3.  a Will or a trust
4.  an advance medical directive or living will

The legal team at Rainey & Rainey represents and advises clients in matters related to property transactions, estate planning, healthcare planning, guardianship, and probate. To learn more, or to prepare the documents you need, contact Rainey & Rainey now at 254-457-5083.