Wills, Trusts, & Estates

Wills

A will is a document intended to make a distribution of property belonging to its author, which takes effect on the author’s death. With few exceptions, every person 18 years or older has the right and power to make a will, so long as the person is of sound mind. Generally, the sound mind requirement means the author of the will (1) understands and appreciate the nature of their business; (2) understands the size, scope, and value of their property; (3) understands the effect of making a will; (4) can identify the persons who are to receive in the property; and (5) perceives the transactions and distributions within the will, and can form a reasonable evaluation of these executions. Every person of sound mind is permitted to make a will that distributes, devises, or otherwise bequeaths any or all of the estate, right, title, ownership, or interests, including real or personal property, which is owned by the author at the time of the author’s death. For married individuals, either person of the marriage may devise or bequeath their interest in community property, neither person may devise or bequeath more than their share of the community property.

Trusts

A trust, also known as a revocable living trust, is a fiduciary relationship where the “trustee” holds the legal title to property for the benefit or enjoyment of another. Trusts are created when a “settlor” or “trustor” transfers property or assets in a trust for the benefit of the “beneficiary.” Trusts are a tool used in estate planning that allow trust assets to pass without probate. Probate is the court process that reviews, confirms, and enforces the terms of a will. Often, the probate process can take many, many months, and the assets that are passed  in the will can not be transferred until probate is completed. Additionally, trusts provide financial protection in the event of mental incapacitation, because the assets are held by the trust, which makes a conservatorship proceeding unnecessary.  Lastly, while Texas does not impose an estate tax, federal estate taxes will apply to estates over $5 million. Though the federal estate tax will generally apply to trusts of this size, a Qualified Terminable Interest Trust (“QTIP”) is available for married persons. QTIPs avoid the federal estate tax by transferring assets from the deceased spouse to the surviving spouse.

Estates

Any and all probate proceeding in the State of Texas are generally governed by the Texas Probate Code and takes place in the county courts. County Courts handle many estate matters, including:  the probate wills; grant letters testamentary and of administration; settle accounts of personal representatives; and transact all business relating to estates that are subject to administration, such as the settlement, partition, and distribution of the estate. For counties that do not have a statutory probate court, county court at law, or other statutory probate court exercising the jurisdiction of a probate court, all applications, petitions, and motions concerning probate and administrations generally must be filed and heard in county court.The procedure generally followed in probate proceedings includes: (1) Determine Venue. Venue is typically determined by the county where the decedent resided, held property, died, or where nearest of kin resided; (2) Filing of Papers. Any and all applications concerning the probate proceedings, complaints, or petitions, and all other papers are filed with the county court; (3) Notices. Citations, notices, and services are followed, as provided by the Texas Probate Code; (4) Contestants. Before the proceeding is decided by the court, any interested person or corporation may file a written opposition and be heard on the matter; (5) Hearings. A hearing is conducted in the county court concerning the probate matter; and (6) Trial. In contested proceedings, parties are entitled to a trial. 

Disclaimer:
The information contained in this post is for general information and educational purposes only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this publication. Accordingly, the information on this post is provided with the understanding that the author and publishers are not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult a professional.

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