Estate Planning During Divorce Proceedings
Divorce is a period of significant change and emotional upheaval, not to mention one of the busiest periods of your life. Amid all the other demands on your time, it’s easy to overlook the practical- yet vital- task of revisiting your estate plan. Despite how unimportant it may feel, if you are contemplating, initiating, or actively engaged in divorce may be critical to update your estate plan to reflect the dissolution of your marriage. The choices made, or more commonly, left unmade, can have a long-lasting and detrimental impact on you and your loved ones. Why Estate Planning During Divorce Matters When a marriage ends, the emotional turmoil often overshadows practical concerns. However, the law does not wait for your emotional process to catch up. Until a divorce decree is final, you and your spouse remain legally bound. This bond extends to your rights and responsibilities regarding property, inheritance, and decision-making authority. Unintended Inheritance: If you die before your divorce is finalized, your estranged spouse may be entitled to a substantial portion of your estate under state law—regardless of your intentions. Existing Estate Plans: Wills, trusts, powers of attorney, and beneficiary designations often name a spouse as primary beneficiary
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Plan for Your Pets’ Future: Protect Them with a Will
August is National Make-A-Will Month, a time to reflect on how planning for the future can make a real difference for the people—and pets—you love. For pet owners, one of the most important yet overlooked aspects of estate planning is making sure your animals are cared for if something happens to you. Did you know that nearly 10% of animals in the U.S. are surrendered to shelters after their owners pass away without a will or care plan in place? Without clear instructions, your beloved pets could face uncertainty, and in some cases, homelessness. Attorney Amanda Pierson, a UT graduate and expert in Probate and Estate Planning, will be sharing her insights in a free webinar hosted by the Houston Humane Society on August 21st at noon. In this informative session, Amanda will discuss: Why including your pets in your will is essential for their security and well-being. How an estate plan can give you peace of mind knowing your pets will be safe, supported, and loved. Ways to make a lasting impact by including charitable gifts in your estate plans that benefit organizations like the Houston Humane Society. Amanda’s presentation will provide practical tips for creating a pet
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Estate Planning Considerations with a Dementia Diagnosis
A dementia diagnosis can be devastating for a family. When dealing with uncertain and unpredictable diseases like Alzheimer’s Disease, estate planning can be both daunting and confusing. In cases where degenerative cognitive diseases are a factor, early estate planning, while you or your loved one still has cognitive ability, becomes essential to ensuring a secure future for your family. Estate plans consist of several documents, including Wills, Trusts, Powers of Attorney, and Advance Medical Directives. These documents propound in writing who your inheritors are, what they will receive, who has authority to make medical and financial decisions on your behalf, and what kind of medical care you wish to receive at the end of your life. Once faced with a dementia diagnosis, these documents become an essential link between your named decision makers and third party medical and financial institutions. Your estate planning documents ensure that your preferences will be upheld and your assets protected once you are no longer able to provide cognitive input. For instance, in your Medical Power of Attorney, you will name trusted individuals who will make medical decisions for you if you are unable to communicate. Additionally, an Advance Medical Directive can be used
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Common Mistakes in Estate Planning and How to Avoid Them
Procrastination The most common mistake people make in estate planning? Not doing it! Many people view estate planning as overwhelming and easy to delay pending more pressing life events. Sometimes people are simply uncomfortable discussing estate planning, so they avoid it. Another common reason for delaying or avoiding estate planning is the mistaken belief that only rich people need estate plans. However, an estate plan is important for all people. Life is uncertain. Estate planning helps combat the uncertainties of life. Often people discover the importance of estate planning when there is an emergency and the lack of medical and financial powers of attorney make caring for and handling finances on behalf of a loved one impossible. It is important to have a plan in place that offers your loved ones direction if you are deceased, or unable to make decisions for yourself. No matter your age or stage in life, it is important to have at least a basic plan in place. DIY Estate Planning While there are online resources available to people plan their estates on their own, not all online estate planning forms and resources are accurate, reliable, or sufficient for a person’s needs. In using
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The Importance of Proper Storage for Estate Planning Documents
When it comes to estate planning, having the right documents in place is only part of the equation. Equally important is ensuring that these documents are properly stored and easily accessible when needed. Estate planning documents, such as wills, trusts, powers of attorney, and healthcare directives, represent your final wishes and can provide significant peace of mind to both you and your loved ones. Without proper storage, these documents could be lost, damaged, or inaccessible when the time comes to use them. Why Proper Storage Matters Estate planning documents serve as legal instructions for the distribution of your assets, guardianship of minor children, and decisions regarding medical care should you be unable to make them yourself. If these documents are not stored securely, there’s a risk that they could be tampered with, misplaced, or inadvertently destroyed. In the event of an emergency, ensuring these documents are accessible to trusted individuals is vital. Types of Estate Planning Documents Common estate planning documents include: Will: A legal document outlining how your assets will be distributed after your death. Trusts: A legal structure that comes into effect during your life and holds and distributes your assets according to your wishes. Power of
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What is a Small Estate Affidavit?
Dealing with the loss of a loved one can be overwhelming, especially when it comes to managing their estate. In Texas, a small estate affidavit offers a simplified way to transfer assets without going through a full probate process. This option is particularly useful for families handling smaller estates, helping to save both time and money. What Is a Small Estate Affidavit? A Small Estate Affidavit is a legal document that allows heirs to collect and distribute the assets of a deceased person without going to court. In Texas, this process is available only under specific circumstances and is governed by the Texas Estates Code. It’s an efficient alternative for estates that meet certain requirements, particularly when the value of the estate is modest. Requirements for Using a Small Estate Affidavit in Texas The Estate’s Value Must Be Small The total value of the estate, excluding the homestead and exempt property, must not exceed $75,000. This limit ensures that the affidavit is used only for smaller estates. No Will A Small Estate Affidavit can only be used if the deceased did not leave a valid will. Assets Qualify for Simplified Transfer The affidavit is primarily used to transfer assets
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Do I Have to Pay Estate Taxes When I Die?
Estate taxes can be a significant concern when planning for the future, and many individuals want to know whether their estate will be subject to taxes when they pass away. For residents of Texas, the good news is that the state itself does not impose an estate tax. However, federal estate tax laws may still apply depending on the size of the estate. Texas and Estate Taxes In Texas, there is no state estate tax, sometimes referred to as a “death tax.” This means that if you are a Texas resident, your estate will not owe any taxes to the state upon your death. This is advantageous for Texans, as some states impose their own estate or inheritance taxes, which can reduce the amount of assets passed on to heirs. The absence of a state-level estate tax simplifies the estate planning process and often allows for more flexibility in passing on wealth to future generations. Federal Estate Taxes While Texas does not have its own estate tax, estates may still be subject to federal estate taxes. The federal estate tax exemption for 2024 is $13.61 million per individual. This means that if the total value of your estate is
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IRS Announces 2024 Tax Adjustments: What You Need to Know for Your Estate Planning
On November 9, 2023, the Internal Revenue Service (IRS) took a crucial step in keeping pace with the relentless march of inflation by issuing Revenue Procedure 2023-34. This directive provides the annual inflation adjustments for various tax provisions, offering valuable insights for individual taxpayers planning their financial strategies for the upcoming tax year. In this article we discuss the key highlights of these adjustments and their implications for estate planning in 2024. Estate, Gift, and Generation-Skipping Transfer Tax Exemption One of the headline changes is the adjustment to the estate, gift, and generation-skipping transfer tax exemption amount for the year 2024. The new figure stands at $13,610,000, representing a significant increase from the previous year’s $12,920,000. This adjustment has crucial implications for individuals planning the transfer of assets, as it means they can now shield an additional $690,000 ($1,380,000 for married couples) from transfer tax liability compared to 2023. Annual Exclusion for Gifts The IRS has raised the annual exclusion for gifts in the calendar year 2024 to $18,000. This is an increase from the 2023 exclusion amount of $17,000. Gifts to Non-Citizen Spouses Another noteworthy adjustment involves gifts to spouses who are not citizens of the United States.
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From Grief to Forever: Turning Ashes into Diamonds
Technology has taken a significant leap forward, offering innovative ways to remember and cherish departed loved ones. Among these unique ways lies a concept that may seem straight out of science fiction—turning cremated ashes into diamonds. What was once an idea confined to laboratories has now become a heartfelt and intimate way for families to preserve the memory of their loved ones forever. The Journey of a Diamond The transformation of a person’s ashes into a diamond is a fascinating process. Natural diamonds are formed over millions of years, deep within the Earth’s core under extreme pressure and temperature. But thanks to General Electric’s breakthrough in 1954, scientists can now replicate those conditions to create lab-grown diamonds. This opened up new possibilities, and in recent years, some companies have started incorporating carbon from cremated ashes into this process. Remembering with Gems One such company, Eterneva, based in Austin, Texas, has been at the forefront of this movement. They offer families the chance to design custom gem memorials, allowing them to choose the size, shape, and even the color of the diamond. A yellow diamond, for example, can be produced by adding nitrogen, while a colorless one requires stringent measures
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Pros and Cons of Adding an Adult Child to a Bank Account: A Guide for Houston, Texas Seniors
Thinking about adding an adult child to your bank account to help handle your finances? If so, you’re not alone. While it may seem like an easy solution for getting assistance with bill payments, it’s crucial to weigh the pros and cons before taking action. Our Houston estate planning team is here to guide you through this decision. The Benefits of Adding an Adult Child to Your Bank Account Convenience: Having an adult child on your bank account can make financial management easier. They can help pay bills, monitor transactions, and address any banking issues on your behalf. Emergency Preparedness: If you become incapacitated, your adult child can immediately access funds to cover your needs. Avoid Probate: Funds in a jointly owned bank account with survivorship rights typically pass directly to the surviving owner, bypassing probate. Meet Mrs. Hart Mrs. Hart, a 78-year-old widow, struggles with managing her finances due to her declining eyesight. She adds her son, Jeff, to her bank account. This allows Jeff to conveniently handle her bill payments, manage her investments, and ensure that her financial needs are being met. However, adding an adult child to a bank account isn’t without potential pitfalls. Potential Drawbacks
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