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Saturday, August 30, 2014

Where to Put My Will?

Put it in a safe place where the executor named in the will may find it when it is needed.

Many people believe the best place for their will is in a safety deposit box or deposited with the county clerk or locked in their desk drawer.

A safety deposit box may not be accessible by the executor. If the executor is set up as a registered user on the safety deposit box account and has access to a key, then this may be a good option. Otherwise banks will not allow entrance to a safety deposit box by someone who is not registered on the account without a court order.

Depositing a will with the county clerk may be a good option. The name and address of the person listed in the will as the executor of the estate should be listed with the county as a contact person in the event of the testator’s death. The county will receive and keep the will on the payment of a $5 fee and the county clerk will issue a certificate of deposit. A later will can be admitted for probate on proof that the later will is the last will and testament of the testator. The necessity for proof of a later will can be avoided if the testator remembers to deposit it with the county as the last will, replacing the previous will. This service provided by the county clerk is for residents of the county only.

A will should be safeguarded; it is for the testator’s eyes only. If a desk drawer is considered to be a secure location, it may be a logical storage place for the will. The maker of the will has to consider the will’s safekeeping up until the time it will be needed. Safekeeping during illnesses, natural disasters and other eventualities must be considered. The executor must be able to gain access to the desk when the will is needed. Will a desk drawer pass the test in these circumstances?

Each person must consider their own special circumstances in deciding where the will is stored.


Monday, October 14, 2013

The Laughing Heir

A laughing heir is one so remotely related to the person who has died (decedent) that there is no sense of bereavement.  Such a person may “laugh” at his or her good fortune rather than bereave the passing of the distant relative. 

A laughing heir statute PREVENTS a laughing heir from inheriting from the decedent.    When the decedent dies without a will, there will be no inheritance by persons more remotely related than grandparents or grandparents’ descendants.  If such relatives cannot be found, the decedent’s property will escheat to the state.

Texas has no laughing heir statute.   A laughing heir may inherit!  Therefore, if the deceased died without a will, the State will qualify an heir, no matter how remotely related to the deceased.   


Wednesday, July 31, 2013

Handwritten (Holographic) Wills

In Texas, handwritten wills are valid.  But there are some stringent requirements and some awfully good reasons not to depend on a holographic (handwritten) will.  Here they are:

  1. The entire will must be handwritten by the person making the will (testator).  It cannot be a mixture of typing and handwriting. 
  2. The testator must sign the will.  There is no requirement that the signature be at the bottom.  The signature can be the testator’s initials, if it is the intent of the testator that signing the initials is meant to be a signature.
  3. The writing must clearly show that the testator intends that the writing be a will (testamentary intent).  Words such as, “I give” or “I bequeath” or “I devise” are good to include.  But whether or not these words are used, the idea is that the testator’s writing has to indicate that the purpose of the writing is to pass title to possessions upon death of the testator.
  4. The testator must be at least eighteen years old (or, if under 18, is married or has been lawfully married, or at the time of the writing, a member of the armed forces of the United States).
  5. In Texas, a date is not required.  Business stationery is not required.  It can be written on most anything.
  6. The testator must have been of sound mind and the will must not have been revoked.

Don’t depend on a holographic will.  Here are just a few of the more common reasons:       

  1. Court challenges are frequently based on whether the testator actually intended that the writing was a will and whether the signature really was the testator’s signature.
  2. Often the entire estate is not devised and the balance of the estate has to pass by way of state intestate statutes.
  3. An error in devising property due to the nature of community property is another common problem.
  4. Usually holographic wills fail to name an independent executor.

An attorney can save the testator and the beneficiaries from the pain of dealing with problems brought about by holographic wills.


Thursday, May 30, 2013

What Good Is A Quitclaim Deed Anyway?

A deed is a conveyance of real property.  A warranty deed guarantees that the property owner has marketable title and can sell or lease the property; enjoy it without being disturbed or dispossessed of it; owns it free of liens and encumbrances.  A warranty deed obligates the conveyor to defend the purchaser from claimants that may surface and allege to have ownership or interest in the property. 

A quitclaim deed is a conveyance of whatever interest the owner has in the property.

Even when a deed states that it is a warranty deed, it still may only be a quitclaim deed.  If a so called warranty deed states that it “conveys the interest that the owner has in the property” rather than “conveys the property,” it is, nevertheless, only a quitclaim deed and contains no warranties.

Thus, in Texas, when one receives a quitclaim deed, he or she is put on notice that the seller may not be a valid owner of the property and that others may have a claim on the title.

Some situations where a seller can only give a quitclaim deed and where others may have a claim on the title are:  

  • a governmental entity may have granted only a long-term lease to the would be seller of the property;
  • a purported seller of the property may have ownership only during his lifetime (a life estate) after which the property must return to the grantor or to the grantor’s heirs; and
  • the seller may have acquired the property by adverse possession but failed to perfect the title.

A quitclaim deed is really not a deed because a deed conveys property and the quitclaim deed only conveys whatever interest the seller has in the property.

 


Thursday, May 23, 2013

Testators Attempt to Provoke Fear Over Challenges to their Wills

Persons who make wills use the ‘in terrorem’ clause to help prevent disgruntled beneficiaries from attacking the will.  The ‘in terrorem’ clause is a paragraph included in the will.  The paragraph states, in essence, that any beneficiary who brings a suit to challenge the will or its validity, automatically loses his or her legacy under the will and will take no part of the estate.  However, if the contest is brought in good faith or there was just cause for contesting the will, then the contesting beneficiary does not automatically lose his or her bequest. 

The decision as to whether the will contest was made in good faith is made by the trial court, not an appellate court.  Some justifications for contesting the will might be that the will maker was not competent at the time to make a will or that the he or she was subjected to undue influence.  The clause does not apply to a minor or incompetent whose guardian acts on his behalf.  The clause also does not apply to one who is not a beneficiary.

Here is an example of an “in terrorem’ clause.

IN TERROREM CLAUSE

If any beneficiary under this Will shall in any manner contest or attack this Will or any of its provisions, any share or interest in my estate given to such contesting beneficiary under this Will is hereby revoked. 

 

In Terrorem, Definition:  [Latin, In fright or terror; by way of a threat.] ….  Conditions of such nature, labeled in terrorem clauses, are ordinarily regarded as threats, since the potential loss of the gift is thought to provoke fear or dread of litigation over the will in the recipient.  (Source:  http://legal-dictionary.thefreedictionary.com/in+terrorem)


Thursday, April 18, 2013

My Pet Can't Wait

Making sure that a pet is cared for after the death or incapacity of an owner has become a popular and routine step to take.   Owners are remembering their pets in their wills, as well as, creating trusts as a means to provide for their pets, which are more like "family" than "property". 

A pet may be in a somewhat precarious situation when its owner dies and the owner's estate is not probated or settled for several months.  What is to become of Fido between the time of Master Tom’s death and the date the court names an administrator of his estate?   Fido still has to eat and be cared for, presumably in the manner in which Tom would desire for his pet.  What if no other family member likes Fido or is interested in Fido’s well being?  This time of uncertainty for Fido, immediately after Tom’s death, is the reason why the pet trust may be a better option for pet owners.

An increasing number of states have enacted laws which address the creation of pet trusts.   Pet trusts are established by owners to provide for the care and maintenance of their animals should the owner become incapacitated or upon the owner’s death.  Tom, a Texan, can take advantage of the Texas statute and create a pet trust during his lifetime for Fido and other pets that he may own.   Tom can name a trustee and an alternate trustee to provide for Fido if Tom becomes incapacitated or immediately upon Tom’s death.  The trust terminates at Fido’s death, or, if the trust is created to provide for the care of more than one animal, on the death of the last surviving animal.

Tom also has some additional measures of security when he creates a trust.  He can name a person to petition the court to enforce the trust if it becomes necessary to do so.  And, if there is money remaining in the trust when the last animal covered by the trust passes away, Tom can specify in the trust how those leftover funds should be distributed.

The pet trust is a great tool for owners to provide for their pet’s care and maintenance in the manner in which they specify.  After all, it is the pet owner who is most familiar with the pet’s routines, veterinary appointments, likes, dislikes, etc.  What wonderful peace of mind for a pet owner!  The pet does not have to wait for the decisions of probate court. 

 


Wednesday, April 10, 2013

Part I: Adverse Possession in Texas

PART 1 OF 2

A property owner has the obligation to oust or bring suit against someone who wrongfully possesses his property.  If the wrongful possessor continues in possession without being ousted, that property may eventually be acquired by the possessor through a process called adverse possession.  Minimum requirements to be satisfied before acquisition by adverse possession are:

 1)      The possession must be CONTINUOUS AND UNINTERRUPTED for a certain length of time.  If there is a break in the duration of possession, time is tolled from the beginning of the most recent period of  continuous possession.

2)      The possession must be OPEN AND NOTORIOUS.  The person on the land (or property) acts as if he owns it.  He restricts others from using it.

3)      The possession must be HOSTILE.  The person does not have permission of the owner to be there. 

 Additionally, Texas has four statutes, each specifying different time limitations and requirements for acquiring title by adverse possession.

 Three-Year Statute – A person may acquire title in three years if the person adversely occupying the land does so under title or color of title.  That is, the person has acquired the land in a regular chain of transfer or, for example, by muniment of title (a will was recognized by a court and the will along with the court’s order were used to transfer title).

Five-Year Statute –  A person may acquire title in five years if: a) he cultivates, uses or enjoys the property; b) pays property taxes; and c)has a duly registered deed (not a forged one).

Ten-Year Statute – A person may acquire title in ten years if he cultivates, uses, or enjoys the property.  Under this statute, possession is limited to 160 acres, except:  if the acreage is enclosed, all enclosed acreage counts, not just 160; and if the possessor has some sort of memorandum of title or a duly registered deed, then the amount of acreage is as stated in the document.

Twenty-Five-Year Statute – A person may acquire title in 25 years if he cultivates, uses, or enjoys the property and he has done so in good faith and under a deed or other instrument that is recorded in the deed records of the county (even if the deed is void!).  This is true without regard to disability of the parties (See Part II:  Adverse Possession for a discussion of “disability”). 

 Read Part II for interesting notes on adverse possession in Texas.

 Statutes

Tex. Civ. Prac. & Rem. Code §§ 16.024, 16.025, 16.026, 16.027, 16.028.

 

 

 


Wednesday, April 10, 2013

Part II: Adverse Possession in Texas

PART II of II

As discussed in Part I, adverse possession of property requires that the occupation be:

  • CONTINUOUS AND UNINTERRUPTED
  • OPEN AND NOTORIOUS and
  • HOSTILE

In Texas there are four time limitations defining adverse possession, each with different additional requirements that must be met before property is adversely acquired.  Those were discussed in Part I.

Following are some additional notes regarding adverse possession in Texas:

Person with Disability (Younger than 18, Serving in U.S. Military during time of war, or Of Unsound Mind)

If the apparent legal title holder is under a disability either at the beginning of the adverse possession or when title vests in the legal title holder, the time of the disability is not included in the limitations period under the 3-year, 5-year, or 10-year statutes.  For example, a 16-year old inherits property.  Two years will not be counted in achieving the duration of the limitations period because the apparent legal title holder was a minor until age 18.

New Ownership Rights are Limited

It must be noted that ownership rights acquired by adverse possession are only good against the person from whom those rights were acquired.  For example, if the original owner (from whom the adverse possessor, acquired the land) had ownership in the land only for the duration of his life (in other words, the original owner had a life estate), the original owner would not have the ability to will or gift that property to another.  Someone else already has a legal future interest in the property.  The person with the legal future interest will ascend to ownership at the death of the original owner and the adverse possessor’s interest will be extinguished.

Marketability Requirements

For property acquired by adverse possession to be marketable, the person claiming title must receive a court judgment that he has successfully acquired title or provide a proper release of deed.

Mineral Rights Not Automatically Included

The acquisition of property’s surface by adverse possession does not include rights in minerals under the surface, if these two estates had previously been separated (severed).  Yes, there can be two different estates (!) – the surface estate and the mineral estate.

Property in Public Use

A person may not acquire through adverse possession any right or title to real property dedicated to public use.

Statutes

Tex. Civ. Prac. & Rem. Code §§ 16.022, 16.025, 16.030.


Monday, April 1, 2013

Avoid Interested Witness Status

In Texas, a will needs witnesses.  The will must be attested by two or more credible witnesses above the age of fourteen years.   (Texas Probate Code Chapter IV, Section 59)

If a witness is also named as a beneficiary in the will, that witness is called an “interested” witness.  The witness who has nothing to gain and will not receive a gift (bequest) from the will is called a “disinterested” witness. 

The interested witness risks losing his or her legacy if, at the time the will is probated, there is no one else who can testify as to the validity of the will and the will cannot otherwise be proven.  Texas laws, as do the laws of many states, require that the legacy be purged if the only person available to testify about the will is the interested witness.   (Based on state purging statutes)

However, the bequest to the interested witness may be saved if his or her testimony proving the will can be corroborated by one or more disinterested and credible persons, whether or not these persons were also witnesses to the will.  As long as these credible persons can testify that the testimony of the interested witness is true and correct, the legacy can be saved.

There is another instance where a legacy to the interested witness may be saved when the interested witness is the only remaining witness.  Before completely purging the bequest to the interested witness, the court will consider the gift that would have gone to the interested witness if no will existed, that is, if the person had died intestate.  If, according to the laws of intestacy, the interested witness would have received an intestate share of the estate, then the courts will grant that share to the interested witness up to but not exceeding the value of the bequest in the will.


Monday, March 25, 2013

Spendthrift Daughter Cannot Benefit Prematurely from a Spendthrift Trust

Benetta knew that her mother Settie had provided for her (Benetta) in a trust.  So Benetta, the Beneficiary of the trust, was not worried that she would be able to pay for her exorbitant shoe purchases and extravagant international vacations.  If she were ever unable to meet her monthly expenses she would tell her creditors that they could have the money designated for her in the trust.

But Settie, the Settlor of the trust expected that her daughter, Benetta, might have such ideas.  So, Settie was careful to state in the trust “this shall be a spendthrift trust.”  Additionally, there was language in the trust that stated the trustee would make distributions to Benetta only when she reached ages 27, 30 and 35.  Benetta was only 19. 

Creditors are generally barred from reaching a beneficiary’s interest in a spendthrift trust.  The beneficiary may be deeply in debt as Benetta appears to be in the example above.  But until the beneficiary receives a distribution from the trust, her interest in the trust is not subject to attachment, contracts, debts or other liabilities.  The spendthrift clause deprives the beneficiary’s creditors from receiving either of those remedies.

The idea is that a person funding the trust, the settlor, has every right to control his or her property and the right to name the conditions or terms of its distribution.  The beneficiary gives nothing of value for her interest in the trust and only has that interest because of the settlor’s decision to provide it.  Therefore the beneficiary has no right to control or access the trust funds prematurely.  The settler retains the right of control over the trust funds until distribution is made to the beneficiary.

There are exceptions to the protections offered by a spendthrift clause.  Among them are: 1) a beneficiary’s child support obligations may be paid from the trust, if distributions are required to be made to the beneficiary rather than distributions that are at the discretion of the trustee to the beneficiary; 2) trust funds cannot be protected if the settler is the beneficiary; 3) the trust may not be protected against creditors who have provided items of necessity, such as meals and medical care; 4) the IRS may prevail against the settler for unpaid taxes; and 5) when a trust is revocable (vs. irrevocable), the trust cannot be protected by a spendthrift clause.


Thursday, March 21, 2013

Do Young Adults Need Wills?

Does the young adult have any assets (money, savings, possessions, an inheritance, a pet, a collection of music)?  Does the young adult have any children, a spouse?

Most young adults have at least one or all of the above.  In that case, the answer to the title question is “yes”!

When people die without a will, they die “intestate.”  The state will determine what happens to their assets according to that state’s laws of “intestacy”.  Texas makes every effort to distribute the deceased person’s property to a spouse, or to children, or parents, or other relatives according to a special, rather inflexible scheme.   The method the state uses to distribute those assets will likely not represent the distribution that the deceased person would have made.


Read more . . .


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