Texas Estate Planning

Description

Model Wills and Trusts

Every estate attorney needs a base of ready answers, clauses, and documents. The larger your collection, the more time you can devote to assessing the big-picture needs of your estate planning clients and applying your judgment and experience. This book contains over 90 forms, dozens of clauses, numerous practice tips and more, all supported with hundreds of recent cases. For example:

More than 40 wills and trusts, including…

• Will for Unmarried Testator With Pot Trust.
• Will for Unmarried Testator With Generation Skipping Trusts.
• Husband’s and Wife’s Wills With Minor’s Trusts.
• Husband’s and Wife’s Wills (Second Marriage) With Immediate Gifts to Children.
• Tax-Planned Wills for Married Couple With Bypass Trust and Outright Marital Deduction Gift.
• Tax-Planned Wills for Married Couple With Bypass Trust and QTIP Trust.
• Qualified Income Trust (QIT) for Medicaid Planning.
• Husband’s and Wife’s Wills With Spousal Special Needs Trust.
• Husband’s and wife’s Wills With Minors’ Trusts and Special Needs Trust for Child.
• Revocable Intervivos Trust for Single Person.
• Tax-Planned Revocable Intervivos Trust for Married Couple.
• §2503(c) Trust.
• Insurance Trust.
• Investment Trust.

Practice Aids

• Use the Client Questionnaire to get your client invested in the process and identify topics in advance that you should be prepared to discuss.
• Avoid problems down the road that cannot be corrected by withdrawal with the Conflicts of Interest Disclosure for Spouses.
• Clarify how you will be paid with the Fee Agreement.
• Prevent incorrect assumptions with the Tax Planning Flowcharts.
• Answer questions in advance, aid client review, and document your advice with these detailed Cover Letters.

Practice Tips

Preliminary concerns

• To protect against a deemed gift, name the spouse as beneficiary of at least 50% of each retirement plan, IRA, or life insurance policy.

All wills

• Wills executed using bank notaries frequently end up with errors on the face of the documents.  Discourage clients who want to execute wills by themselves.
• Clients often wish to give the guardian liberal access to the children’s inheritance, but this can create issues of self-dealing or conflicts of interest which then must be addressed in the will. A simpler alternative is to use this clause to ….
• If a testator has children from a previous marriage, he should consider leaving the homestead to the surviving spouse and providing for the children out of other assets. Why? The children may not be able to sell or use the property for some time.

Tax-planned wills

• If the surviving spouse is given a lifetime power to withdraw trust principal, consider limiting the power to an ascertainable standard like health, education, maintenance, and support. This limitation gives the executor of a QTIP trust the flexibility to…. In a GPOA trust, this limitation may provide….
• If a QTIP trust is funded in part with an IRA or Roth IRA, the will or trust document should contain a clause like the following that redefines “income.”
• Texas provides little help to the victim of imprecise drafting, since it has no statute that would effectively limit an otherwise unlimited power. Texas practitioners are thus advised to confine themselves to language specifically permitted by Treas Reg section 20.2041-1(c)(2).

Trusts

• Creditor protection can be undermined by appointing the beneficiary as trustee, giving the beneficiary the right to remove the trustee, or giving the beneficiary the right to compel distributions.
• Clients are often surprised to learn that even with a living trust, an estate tax return must be filed, bypass trusts must be funded, and the heirs may not get all their money until the IRS issues a closing letter.
• If a revocable trust owns a checking account that the settler-trustee uses for personal expenses, he should have his own name printed on the checks.

Medicaid Planning

Chapter 5 contains forms for:

• Lady Bird deeds
• Miller Trusts
• Special needs trusts

Included with the book is access to digital forms via an emailed zip file, containing a searchable full-text of the book as well as all the forms from the book. The forms can be easily accessed and modified with your preferred word processing program. No installation necessary.

Speed is important when you charge fixed fees for creating wills and trusts, but imprecise drafting can lead to costly errors. The book’s drafting recommendations include sample clauses that you may access via an emailed zip file. The issue-oriented text is to-the point, delivered without hedging, and is well-supported with recent cases. Tax considerations, consequences and opportunities are clearly presented and supported with examples. Plus 38 wills and trusts are included for easy access and modification.

REVISION 9 HIGHLIGHTS

The latest edition of Texas Estate Planning brings you—

32 REVISED FORMS. The most significant revisions include:
Digital assets. All wills, revocable trusts, and durable powers of attorney have been revised to add a provision authorizing the executor, trustee, or agent to take control of the testator’s, settlor’s, or principal’s digital assets, such as email, social media, and online banking.
Estate tax portability. All wills and revocable trusts for married persons now include a provision allowing the surviving spouse to request the executor to elect to allow him or her to use the decedent’s unused estate and gift tax exclusion. The executor need not honor any request made less than two months before the filing deadline for the return.

UPDATED TEXT. Issues addressed include:

• Where is the line beyond which remote beneficiaries to an accumulation trust will not be considered for pur-poses of Designated Beneficiary treatment? PLRs provide guidance. See §2:152.2
• Can an inherited IRA ever be exempt from bankruptcy creditors? See §2:162
• When might income distributions from a family trust be separate property? See §3:07
• Why you need to preserve evidence of where a durable power of attorney was executed. See §4:26.
• How the Norwood decision has created problems for incapacitated individuals who have executed a durable power of attorney and sick or disabled individuals who need to. See §4:27.
• How you can preserve evidence of where a durable power of attorney was executed. See §4:46
• How strict are courts in enforcing the four-year statute of limitations for probating a will? Under what circumstances might a court grant some leeway? See §10:68
• Why you should include a provision giving the executor or trustee power to control, transfer, or terminate the testator’s/settler’s digital assets in a will or revocable trust. See §10:179.1
• Privacy and the revocable trust—what are the limits? See §20:02.1
• Under what circumstances is an arbitration clause included in a trust enforceable? See §20:182
• Should you routinely include an arbitration clause in your trusts? When might an arbitration clause thwart the settler’s intent? What might you do to prevent that outcome? See §20:183

ABBREVIATED TABLE OF CONTENTS

Chapter 1 Client Communications
Chapter 2 Non-Probate Assets
Chapter 3 Community Property
Chapter 4 Ancillary Documents
Chapter 5 Medicaid-Oriented Estate Planning
Chapter 6-9 [Reserved]
Chapter 10 All Wills
Chapter 11 Wills for Single Persons
Chapter 12 Simple Wills for Married Testators
Chapter 13 Tax-Planned Wills for Married Couples
Chapter 14 Codicils to Wills
Chapter 15 Generation-Skipping Transfer Planning
Chapter 16-19 [Reserved]
Chapter 20 All Trusts
Chapter 21 Revocable Inter Vivos Trusts — Single Persons
Chapter 22 Revocable Inter Vivos Trusts — Married Couples
Chapter 23 Funding the Revocable Trust
Chapter 24 Irrevocable Trusts — Non-Charitable Beneficiaries

ABOUT THE AUTHOR

Dianne Reis is a graduate of Harvard University and the University of Texas School of Law, where she served as an associate editor of Texas Law Review. She is a member of the Real Estate, Probate, and Trust Law Section of the State Bar of Texas, the College of the State Bar of Texas, the Estate Planning Council of North Texas, and the National Academy of Elder Law Attorneys (National and Texas Chapter). She is currently serving on the Exam Writing Committee of the National Elder Law Foundation.

Ms. Reis is board certified in estate planning and probate law by the Texas Board of Legal Specialization, and she is certified in elder law by the National Elder Law Foundation. She has a solo practice in Plano focusing exclusively on estate planning, probate, and Medicaid planning.