Texas Probate Options with a Will

When a person dies with a will, there are various questions that typically arise.  Below I address several common questions regarding probating a Will and the options for probating a will.

Do I have to probate the Will?  Is probate necessary?

It depends.  A person's will controls the disposition of their "probate assets."  If the Decedent owned probate assets, then a probate procedure is probably required to transfer those assets.  Probate assets are assets in the Decedent's name, which do not have a right of survivorship or beneficiary designation.  Probate assets also include any life insurance or other assets payable to the Decedent's probate estate or payable to beneficiaries who have all died before the Decedent. 

 

Non-probate assets are assets that do not have to go through probate at the Decedent's death in order to pass to the beneficiaries.  These assets pass by operation of law or pursuant to a contract.  Examples of non-probate assets include life insurance, pension benefits, profit sharing plans, annuities, jointly owned property with right of survivorship, trust assets and powers of appointment. 

If the estate is comprised entirely of non-probate assets, then probate should not be required.  If a loved one has died, it is important to consult an attorney who can advise you as to whether probate is needed.  If probate is necessary, but the will is not probated the statute of limitations may bar admitting the will to probate in the future.  As with most legal issues, time is of the essence in any probate matter so do not wait to consult an attorney regarding whether probate is needed.

Is there a time limit on probating a Will?

Yes, Texas law provides that a will must be probated by an interested person within 4 years of the date of death of the Testator (person who made the will).

What happens if more than 4 years has passed?

Generally a will may not be probated more than four years after the date of death of the Testator/Decedent (person who made the will.)  If more than 4 years has passed, it may still be possible to probate the will if the person offering the will for probate can prove he or she was not in default for failing to probate the will sooner.  The Court may admit the will to probate as Muniment of Title, but cannot grant Letters Testamentary.  Muniment of title is typically used to transfer title to real property and is not always accepted by financial institutions.  If the estate contains assets other than real property, Muniment of Title could make administering the estate very difficult.

 

If the will cannot be probated, the estate will pass under the intestacy laws of Texas.  The disposition under intestacy law may not be the same as the disposition according to the will. Probating a will in a timely manner saves a lot of time, headache and expense. 

Is an Original Will needed?

A copy may be acceptable, but it is always preferable to have an original.  Generally an original will is required for probate.  If an original cannot be found, there is a presumption the will has been revoked.  A copy may be probated if the cause as to why the will has not been produced can be proven (for example, establishing the Decedent's house burned down with the original will inside), the Court is satisfied that the will cannot be produced and the contents of the will are substantially proven (by testimony or a copy).  Probating a copy is much more complex and requires special pleadings, notices and proof.

Who may probate a Will?

A will may be offered for probate by the nominated Executor named in the will or by any interested person.  Generally an interested person is someone with a pecuniary (monetary) interest in the estate, which typically means a beneficiary of the will. 

 

It is important to note that a person is not the Executor until they are appointed by a Court.  An Executor must qualify by meeting certain statutory requirements before they can be appointed, even if they are nominated in the will. 

What are the procedures available for probating a Will?

Typically when a person dies, probate is necessary to transfer their assets to their beneficiaries.  The probate procedure which applies generally depends on the type of assets that belong to the Estate.

 

Letters Testamentary: The most common form of probating a will is applying for Letters Testamentary.  Through this process, the Court determines whether the will is valid, appoints an Executor and issues Letters Testamentary which are evidence that the Executor has the authority to act on behalf of the Estate.  The Executor may then begin to administer the estate, which involves collection of assets, payment of debts and distribution of assets to the beneficiaries.  When financial institutions are involved, for example if the Decedent had money in bank accounts, stocks, bonds, or other investment accounts, Letters Testamentary are usually required before the institution will transfer any of these assets.  The financial institutions want Letters Testamentary to ensure they release the funds to the appropriate party.  The Letters Testamentary prove the Executor is entitled to access the assets and relieve the financial institution from liability, as the Executor is responsible for proper handling of Estate assets.

 

Muniment of Title:  Muniment of Title is a shortened process used to probate a will when administration is not required.  The will is admitted to probate and declared valid, but no other administration of the estate takes place.  The Order admitting the will to probate and the will are recorded in the real property records.  This transfers title to real property from the Decedent to the Beneficiaries.  Generally Muniment of Title is only appropriate if: no more than four years have passed since the Decedent's death, there are no unpaid debts (excluding secured debts on real property), and administration is not required.    Muniment of Title is typically used when the primary assets of the estate is real property, as many financial institutions will not accept Muniment of Title for bank accounts, stock transfers, etc. 

 

This abbreviated process does not require publication of notice, notice to secured creditors and return of an Inventory or Affidavit in Lieu of Inventory, which are otherwise required in probate.

 

Regardless of the type of probate necessary, most courts require that a person offering a will for probate be represented by an attorney.  There are minimal exceptions to this rule, and generally only involve small estate affidavits (not addressed in this article).  If a loved one passes away, make sure and consult a probate attorney in a timely manner.  An attorney will walk you through your options, ease your mind during this stressful time and ensure the Estate is properly handled. 

Texas Special Needs or Supplemental Needs Trusts

Many people mistakenly believe they cannot leave an inheritance to a special needs relative.  They fear causing their loved one to lose desperately needed government benefits.  Fortunately, there are ways to give or leave assets to a special needs individual without jeopardizing their benefits.  There are also ways to protect funds that a special needs individual receives outright which would interfere with benefits unless properly handled. 

 

What is a Special Needs Trust?

A Special Needs Trust, also commonly called a Supplemental Needs Trust ("SNT") is a trust which holds funds that are used to supplement a disabled person's means-tested government benefits.   Means tested programs include SSI, Medicaid, and Community Based Alternatives.  Generally the SNT funds cannot be used for medical care, food, clothing or shelter.  The SNT funds may be used for any extra items not provided for by government benefits such as vacations, purchase of a residence, special medical treatments, special therapies, educational services, etc.  

 

When is Special Needs Trust Necessary?

A SNT is necessary to maintain a disabled person's government benefits when the disabled person receives funds, or is going to receive funds or other items which would otherwise jeopardize their benefits.

 

Typical scenarios in which a SNT is appropriate include:

 

1.  Setting up a SNT to hold an anticipated inheritance for a disabled person receiving government benefits.  Perhaps you have a disabled child or grandchild and wish to make lifetime gifts to them or include them in your estate plan.  This type of SNT can be set up and funded during life or through a testamentary SNT which is contained in your will.  The SNT will allow you to give or leave money or other assets to a disabled person without interfering with their benefits.

 

2.  Setting up a SNT to hold funds owned by a disabled person, typically received by inheritance or receipt of funds from a personal injury settlement.

 

What are the types of Special Needs Trusts?

A SNT may be self-settled or settled by a third party, meaning it may be set up using the disabled person's funds or a third party's funds.

 

Self Settled Special Needs Trust

A Self Settled Special Needs Trust is a trust funded with funds owned by the special needs individual.  These trusts are also commonly called (d)(4)(A) trusts based on the statute which authorizes their creation, 42 U.S.C. §1396p(d)(4)(A).  Typically a Self Settled SNT is used to avoid losing benefits when a disabled person receives funds through an inheritance or as a result of a personal injury.  A Self Settled SNT must be created by a parent, grandparent, legal guardian or by a court, along with other requirements.  The general requirements include:

     1.  The trust is funded by assets owned by the disabled individual for whom the trust is established;
     2.  The individual is under age 65 at the time the trust is established;
     3.  The individual is disabled, as defined by statute;
     4.  The trust is created by a parent, grandparent, legal guardian, or by the court;
     5.  The trust includes a repayment provision to the state for all medical assistance provided to the disabled individual. 

The trust funds must be used to supplement, not supplant government benefits, meaning the funds should not be used for items covered by government benefits.  The Trustee must not make cash distributions to the beneficiary or make distributions for food and shelter. 

 

This type of SNT has several requirements, and if it has to be approved by the court, there is no guarantee the court will authorize creation of the SNT.  The primary downside to this type of SNT is the required repayment provision.  If there are funds left in the SNT at the end of the beneficiary's life, they must be paid to the state to extent assistance is provided.  Thus, if you want to leave an inheritance to a special needs person, it is wise to set up third party settled SNT now, rather than forcing the disabled individual to attempt a self settled SNT, which can be problematic. 

Third-Party Settled Special Needs Trust  

A Third Party Settled SNT is a tool most commonly used by family members to provide for a disabled relative with out causing the disabled relative to lose their benefits.  This type of SNT can be funded during lifetime to help with a disabled person's needs while the settlor is alive or a settlor can bequest funds through their will or a trust that will flow into a SNT for the disabled relative when the settlor passes away. 

 

One benefit of establishing a SNT during life is that other family, such as grandparents, can also utilize the SNT to leave an inheritance to the disabled person via the SNT by naming the Trustee of the SNT as the party to receive the inheritance, or other relatives can simply fund money into the SNT during their lives.  An SNT can also be funded with life insurance policies that will pay out to the SNT ensuring it is funded to care for the disabled person when various family members pass.  For parents of a special needs child, ensuring their child is cared for after they are gone, is a huge concern.  An SNT can ease those fears and ensure there are sufficient funds to provide for the special needs child the rest of their life.

 

There are lots of planning options for special needs individuals.  If you have a special needs loved one, consult an estate planning attorney who can help you make sure your family is protected.

The Importance of a Comprehensive and Current Estate Plan in Texas: Estate of Ted Williams as a Cautionary Tale

Every client who engages the Newill Law Firm for a Family Legacy and Wealth Planning Package gets a plethora of documents which cover all of their estate planning needs.  Many people mistakenly believe they can execute an estate plan and never re-visit the documents.  An estate plan is not static.  The plan must change when your wishes or life circumstances change.  Not only is it important to have a complete and comprehensive estate plan, it is critical to update your plan if your wishes change and to implement an attorney to make those changes to ensure they are done correctly. 

 

One optional document we offer is an "Appointment of Agent to Control Disposition of Remains."  This document states who you want to make decisions regarding your remains once you pass away.  Most people think they do not need this document...and hopefully they never do.  More often than you would anticipate families, especially blended families, fight over who gets to decide whether the deceased family member is cremated, buried, frozen, or launched into space like Gene Roddenberry, creator of Star Trek.

Sometimes simply stating how you would like your remains handled is not enough, you also need to specify who controls the remains.  A very strange case which illustrates this point arose in the Estate of Ted Williams, a famous Boston Red Sox player and baseball manager.  Williams died in 2002, leaving a Will executed in 1996, which stated he wished to be cremated.  Daughter, Bobby Jo Williams Ferrell, called for cremation of Williams's remains.  His children from another marriage, Claudia Williams and John-Henry Williams, presented a note allegedly signed by Williams in 2000, which stated he wished to be cryogenically frozen, along with his children, so they could all potentially be reunited in the future.  The executor of the Estate supported the position Williams wished to be cryogenically frozen.  A legal battle over the remains ensued.  After spending substantial sums on litigation, Bobby Jo Williams Ferrell eventually withdrew her objection to cryogenic preservation of Williams.  Ultimately, Williams was cryogenically frozen and remains frozen today.  The issue of how Williams truly wanted his remains treated has never been resolved. 

Writing an update to your estate plan on a napkin, scrap of paper, or bathroom stall is unlikely to produce quality results.  As illustrated in the Estate of Ted Williams, not only is it important to have a comprehensive estate plan, it is critical to update your plan if any of your wishes change or if your life circumstances change and to use an attorney to make any changes to your estate plan.  

Where To Store A Texas Will

So, you have completed your estate plan and now you have to find a place for the documents to hibernate until they are needed.  Your estate planning documents will not serve you well if you stash them in that old box of "important" documents you keep in the attic and promptly forget where they are located.  In Texas, lost wills are presumed to be revoked.  Although this presumption can be overcome, and a copy of a will can sometimes be probated, it is much wiser to keep track of your original documents.  

File Will
Under Texas Probate Code Section 71, a person may deposit their will with the County Clerk in the county where the testator (person who made the will) resides for a minimal fee.  In Bexar County the fee for safekeeping of a will is $5.00.  This procedure ensures the original will is safe and easy to locate.  When the testator dies, the original will can be easily accessed and probated.  Depositing a will does not prevent the testator from changing the disposition of his or her will.  The testator may retrieve the will during his or her lifetime, thus enabling him or her to amend the will or execute a new will.

Safe Deposit Box
Another option is to store original documents in a safe deposit box.  When selecting this option for safekeeping it is important to inform your family where your safe deposit box is located and verify someone else is able to access the box.  If no one has access, once the box owner passes away under Texas Probate Code Section 36D the financial institution may allow a spouse, parent, adult descendant, or person named as executor in a copy of the will to inspect the box.  If the institution will not allow access, the court may order inspection under Texas Probate Code Section 36B. 

The above inspection provision will not guarantee access to the box if the testator is still living but becomes incapacitated and has stored his or her power of attorney documents in the safe deposit box.  Thus, when utilizing a safe deposit box, which is under the supervision and control of a financial institution, it is important to discuss access with your bank and consider having multiple keys and/or holding the box as joint tenants with someone you trust who can access the documents. 

Fire Proof and Flood Proof Safe or Cabinet

Keeping original documents at home clearly provides the most access and control over the originals.  The originals should be kept in a large fire proof and flood proof safe or filing cabinet.  Original documents would be likely to survive any natural disasters or fires in these locations and thieves will be unlikely to steal large and cumbersome safes or cabinets.  Investing in a safe or cabinet will provide a secure place for your documents and peace of mind regarding their safety. 

Regardless of where you store your original documents, there are several things everyone can do to substantially increase the likelihood their documents will be found when they are needed.

1. Inform.  Inform family members, friends or those you appointed in your documents where you are keeping your originals.  If utilizing a safe deposit box or safe, make sure someone you trust also has access to the documents. 

2.  Copy.  Give copies of your documents to the nominated persons in your documents, family members, and potentially your primary doctor.

3.  Mark.  Mark your copied documents as copies so it is clear they are not originals.  I am often presented with copies of documents which people believe are originals. 

4.  Consider Your Situation.  Consider whether anyone will be unhappy with the disposition you have made in your will and store your documents accordingly.  For example, if you disinherit one child it may be advisable to store the original documents in a place where that specific child will not have access.  Consider who you trust.  Consider where you can store the documents to achieve maximum security yet accessibility. 

Texas Adult Guardianship Case: Step-by-Step

If an adult family member is having difficulty managing their financial and personal affairs, it may be time to consider a Guardianship of the Estate, Person, or both.  Prior to initiating a Guardianship, it is important to discuss all of the alternative options with your attorney.  To establish a Guardianship, the Applicant (person seeking to become guardian) must show the Proposed Ward (person having difficulty) is incapacitated by clear and convincing evidence.  Given the high burden of proof, and family strife a Guardianship can cause, initiating a Guardianship should be a procedure of last resort.  If you find yourself facing this situation, the following step-by-step process outlines what you can expect throughout each stage of the Guardianship. 

 

1.  Physician's Certificate of Medical Examination:  Prior to filing an Application for Appointment of Permanent Guardianship of the Person or Estate, a Physician's Certificate of Medical Examination  (CME) should be obtained.  The CME is a physician's assessment of the proposed ward's condition based on an examination of the proposed ward.  Amongst other things, the CME states the nature of the proposed ward's incapacity, their physical and mental condition, any applicable medical diagnosis, and discusses their ability to handle business, finances, operate a vehicle, vote, make decisions regarding residence and marriage, and consent to medical treatment.

 

If for some reason the CME cannot be obtained prior to filing the Application, it may be obtained after.  The court cannot grant an application without the CME and it may not be dated more than 120 days prior to filing the Application and the doctor must have examined the proposed ward within 120 days prior to the filing.

 

If the basis of the Application is mental retardation, more relaxed rules apply to the CME, most notably the doctor must have examined the proposed ward within 24 months prior to the date of the hearing, rather than 120 days of the Application filing.

 

2.  Application for Appointment:  The Applicant must sign a verified Application setting forth the grounds for the Guardianship, which is then filed with the court in the County where the proposed ward resides.  The CME is attached as an exhibit.  The court clerk will issue a notice and citation stating the Application was filed, the names of the parties, and a statement regarding the rights of interested parties. 

The Proposed Ward must be personally served with notice and citation.  The Proposed Ward may not waive personal service.  Other persons required to receive personal service, or any type of service, may waive their right to service and notice.  Unless waived, personal service must be made on the Proposed Ward's parents, conservator or person having control of the Proposed Ward, Proposed Ward's spouse, the person named in the application to be appointed guardian if said person is not the applicant. 

The notice and citation and application must be sent via certified mail, return receipt requested to all adult children of the proposed ward, all adult siblings of the Proposed Ward, the administrator of a nursing facility where the Proposed Ward resides, the operator of a residential facility where the Proposed Ward resides, a person whom the applicant knows holds power of attorney signed by the Proposed Ward, and other statutorily specified persons. 
 

The Applicant must file a copy of the notice and an affidavit stating compliance with the above notice provisions.

3.  Statutory Wait:  The Court may not act on the Application until the Monday following the expiration of a 10 day wait period.  The 10 day wait period begins on the date notice and citation has been made.  If only personal service is required, the wait period begins on the dated the last person is personally served.  If mailed notices are required, the wait period begins when the notice and affidavit stating compliance is filed. 

4.  Court Investigator & Report:  Once an Application is filed, a Court Investigator will investigate the circumstances of the case and file a report of his or her findings and conclusions.  The report will include the Court Investigator's opinion as to whether a guardianship is needed, and if so, who is the appropriate person to be appointed.

5.  Attorney ad Litem Appointed:  If the Proposed Ward has not already sought their own legal counsel, an Attorney ad Litem will be appointed to represent the Proposed Ward.  The Attorney ad Litem meets with the proposed ward, reviews the Application and other court filings and the proposed ward's medical records, then pursues the course of action his or her client desires.  If the Proposed Ward wishes to contest the Guardianship, the Attorney ad Litem will proceed accordingly.  If the Proposed Ward cannot communicate his or her wishes to the Attorney ad Litem, he or she will proceed in the best interests of the Proposed Ward.
 
6.  Guardian Ad Litem: A Guardian ad Litem is not appointed in every Guardianship.  When a Guardian ad Litem is appointed, his or her responsibility is simply to represent the best interests of the Proposed Ward.  The Guardian ad Litem only considers what is best for the Proposed Ward, which may be in conflict with what the Proposed Ward desires.  Conversely, an Attorney ad Litem is required to comply with the wishes of the Proposed Ward regardless of whether the course of action is in the Proposed Ward's best interests. 

7.  Hearing:  Generally the Proposed Ward must attend the Guardianship hearing, unless excused by the Court.  The applicant will be asked questions by the attorneys and Court.  If the Guardianship is contested, a complete jury trial may be held, with witness testimony.  The judge or jury will render a decision regarding appointment of a Guardian, bond, and all other issues.  Generally the Applicant requests a reduced bond.  Later the Attorney ad Litem requests fees to be paid, from the Guardianship Estate or County, if the Estate is not able to pay.  If a Guardian ad Litem was appointed, they too will seek payment. 

8.  Bond, Oath, Letters of Guardianship:  After appointment, the Guardian must post bond, file an oath and then Letters of Guardianship are issued.  The Letters of Guardianship evidence the Guardian's legal authority to act on behalf of the Ward.

9.  Declaration of Guardianship in the Event of Death or Incapacity:  If a parent is named Guardian of the Ward, it is wise to execute a Declaration of Guardianship which nominates a Successor Guardian to serve in the event the Guardian becomes incapacitated or dies.  This document limits future court involvement.  If the parent Guardian dies or becomes incapacitated, the Successor Guardian may be appointed by the court on submission without a hearing. Some people choose to include this nomination in their Last Will and Testament, however a separate Declaration of Guardianship is easier to submit to the court if needed.  Further, it keeps the Last Will and Testament private, which many people wish to do. 

 

10.  Inventory and Appraisement:  If Guardianship of the Estate has been granted, an Inventory and Appraisment must be filed within 30 days after the date the Guardian is appointed.  The Inventory and Appraisement lists the property owned by the Ward and each item's value.  A List of Claims due to the Ward, if any, is also attached to the Inventory and Appraisement.

11.  Annual Accounts and Annual Reports:  A Guardian of the Estate must file an Annual Accounting within 60 days of the 12 month anniversary of the date of appointment.  The Annual Accounting tracks all the assets and liabilities of the Ward's Estate.  A Guardian of the Person must file an Annual Report regarding the Ward.  The Annual Report includes information related to the Ward's residence, condition, health, medical treatment, etc.  The Letters of Guardianship specify the due dates for Annual Accounts or Reports.  The Guardian must also submit proof of bond at this time.

An uncontested Guardianship can be a fairly straightforward matter.  However, a contested guardianship may involve several extra steps not listed above and can quickly become very time consuming, expensive, and stressful.  Hopefully you never need any of the information contained in this article.  However, if a loved one ever becomes incapacitated or you believe a guardianship may be imminent, contact an elder law attorney who can guide you through the process.

Estate Planning With Pets

I love animals and anyone who knows me is aware of my obsession with dogs.  I have admittedly gotten professional pictures taken of my dogs, Dunder and Scraggles...here's one.
 

I am involved in various animal rescue organizations.  I have seen many animals offered for adoption who have come to the rescue because an owner passed away and the family members could not, or would not, take care of the pet.  I consider my pets family members, as do many people.  An increasing number of people have started to plan for the care of their pets once they become incapacitated or pass away.  There are various methods utilized to plan for pets from the very basic pet cards and door signs to pet trusts.  The tools which are right for you will depend on your specific goals, financial situation, available and willing animal caregivers and numerous other factors.  If you are considering planning for your pet, it is wise to meet with an estate planning attorney to ensure your intent is carried out through your estate plan.

Estate Planning Methods to Protect Your Pet

Pet Card:  A pet card is a small wallet alert card which can be kept in your wallet, purse or on your person.  It specifies how many pets you have, the type of pets and names an emergency pet caregiver.  If you are involved in an accident or are otherwise unable to care for your pets, this card alerts the people assisting you to address the care of your pets and contact the emergency pet caregiver.

Emergency Caregiver Form: This form is an enhanced Pet Card.  It describes your pets, designates an emergency caregiver for your pets, contains pertinent veterinary information and outlines how your pet is to be cared for.  Once copy should be kept in a place where it can readily be found by someone caring for your pets, for example on the fridge or next to the dog food bag.  Another copy should be kept with your estate planning documents.

Emergency Notice Door Sign:  Posting emergency notice signs on the front and back doors of your home are critical in the event of a fire or other emergency.  These signs let emergency responders know how many and what type of pets are inside the residence.  This may be particularly important if you have pets which are prone to hiding or otherwise may go unnoticed. 

Durable Power of Attorney:  A Durable Power of Attorney should be included in every estate plan and gives your designated agent the power to mange your finances in the event of your incapacity.  If you already intend to execute a power of attorney, you may wish to include provisions in your durable power of attorney authorizing your agent to care for your pets, spend your money on care for your pets, and perhaps authorizing the agent to deliver your pets to the named emergency caregiver. 

 

Some people execute a special durable power of attorney just for the care of their pets.  An example of such a document may be found at the link below:

http://elderpet.org/Documents/durable%20power.3.pdf

Traditional Pet Trusts:  There are two main types of pet trusts, Testamentary Pet Trusts and Intervivos Pet Trusts.  A Testamentary Pet Trust is a Trust created within your Will and it only comes into existence upon your death.  An Intervivos Pet Trust comes into existence as soon as it is executed and funded.  The benefit of an Intervivos Pet Trust is its capacity to initiate care of your pets prior to your death, for example if you become incapacitated.  A Testamentary Pet Trust only comes into existence upon you death, thus providing no protection for your pets should you become incapacitated.  Further, if there is a time delay between your death and probate (typically there is), the Trust will not be immediately funded and will not be capable of caring for your pets in the interim between your death and probate.  Since animals need food, water, medical care and other things on a daily basis, a Testamentary Pet Trust is generally not the best way to provide for day-to-day care of your pets. 

 

Many people prefer a Testamentary Pet Trust over an Intervivos Pet Trust, because it is cheaper since the Testamentary Trust is contained within the Will, thus there is no separate Trust document which must be paid for.  In addition, the Testamentary Pet Trust does not have to be funded, as it is funded upon your death through probate.  An Intervivos Pet Trust must be funded when it is created, requiring the pet owner to put resources into the Trust during his or her life.  Despite the additional cost, an Intervivos Pet Trust is the most reliable tool for ensuring your pets are properly cared for in the event of death or incapacity. 

 

Statutory Pet Trust:  Pursuant to Section 112.037 of the Texas Trust Code, a trust may be created to provide for the care of an animal.  A simple provision in a Will such as "I leave $5,000 in trust for the care and comfort of my dog, Dunder "may be enough to create a Statutory Pet Trust.  If no other terms of the Trust are specified, the statute fills in the gaps of the Pet Trust and provides the following:

 

• The Trust terminates on the death of Dunder. (If more than one animal is named, it terminates on the death of the last surviving animal);
• The court may appoint a trust enforcer, essentially this person make sure the $5,000 is spent on Dunder's care and comfort;
• A person interested in Dunder's welfare may request the court appoint a trust enforcer or to remove a person who has been appointed to enforce the trust who is not doing their job of caring for Dunder;
• The $5,000 may only be used for Dunder's care and comfort, unless there is a court determination that the $5,000 is excessive.  Any excess must be distributed to the pet owner, if he/she is living.  If the pet owner is not living, the excess is distributed to his/her beneficiaries under the pet owner's will.  If there is no will, to the pet owner's heirs. 
• If there is excess when the Trust terminates, any excess must be distributed to the pet owner, if he/she is living. If the pet owner is not living, the excess is distributed to his/her beneficiaries under the pet owner's will. If there is no will, to the pet owner's heirs.

Creating a Statutory Pet Trust has obvious disadvantages, specifically the simplicity.  The pet owner is relying on the Trust Code to essentially fill in the blanks of the Trust, rather than laying out a specific plan for the care of the pet.  With a full Intervivos or Testamentary Pet Trust, the pet owner often specifies how the animal is to be treated and what the trust funds are to be used for, such as food, medical expenses, specific treats, doggie day care, grooming, birthday cakes, daily exercise regimen, clothing, etc.  This specificity ensures not only that the animal is cared for in the manner the pet owner desires, but justifies the funds in the trust, leaving little room for the trust assets to be considered "excessive."

 

Gift of the Pet:  Since animals are treated as personal property, a pet owner can gift their pet in their will.  There are various options for gifting a pet which include, gifting a pet along with funds which are to be used to care for the pet, gifting a pet to a veterinarian, shelter or rescue, or gifting a pet to a life care center.  These options are generally risky and unappealing as unlike a trust, there is no one to police the gift and ensure the animal is being properly attended.  Most often they are considered when the pet owner has limited assets available to provide for the pet's care and/or does not have anyone available or appropriate to serve as a caregiver for the pet.

 

You wouldn't forget to feed, water or walk your pets, so do not overlook your pets when contemplating estate planning.  Make sure your pets continue to enjoy their current standard of living after your death or incapacity by discussing pet planning with your estate planning attorney.  The only way to absolutely ensure your pets are protected and your wishes are honored, is to execute an estate plan which incorporates your beloved pets.

Estate Planning to Protect Your Children

If you passed away or became incapacitated, who would take care of your children?  What assets would be available to provide for your children?  Who would make decisions in your absence?  Is there someone you absolutely do not want to care for your children?  If you don't have a comprehensive estate plan, you probably cannot answer these questions with certainty.  Anyone with a child or children needs a comprehensive estate plan.  There are three primary estate planning tools used to protect children, a Designation of Guardian for Minor Children, Designation of Health Care Agent for Children, Contingent Trusts and Special Needs Trusts. 

Designation of Guardian for Minor Children

If you passed away or became incapacitate, who would you select to care for your children and their estates? A Designation of Guardian for Minor Children can be contained in your Will or executed as a separate document.  It is used to name a person or couple to care for your minor children if both parents of the children die or become incapacitated.  In most circumstances, if one parent dies, the surviving parent is the natural guardian of the minor children (even if the parents are unmarried or  divorced). This document may also specify persons you do NOT want to be appointed guardian. 

If you do not name a guardian for your minor children in your Will or ancillary documents, the court will make the decision for you.  Generally there is a priority for appointment based on familial relation, so the judge will decide who to appoint as guardian between your relatives (parents, grandparents, and so on), if there are any.  If you have named a guardian, the court must appoint the named person unless they fail to qualify or it is not in the best interests of the child.  If the designated guardian does not qualify or fails to serve for any reason (death, resignation, refusal), the court will look to the named alternate.  Only if the designated guardian and all alternates fail to qualify, do not serve the best interests of the child, or fail to serve, does the court proceed to appoint a guardian based on the statutory priority list.  You know better than anyone what is best for your children.  Deciding who to choose to care for your children in the event of your demise is a critical decision and should not be left to a court.

Designation of Health Care Agent for Children

If you plan on being away from your children for an extended period of time, a Designation of Health Care Agent for Children allows the person caring for your children in your absence to make medical decisions on behalf of your child.  For example, if you went on a trip and could not be reached when your child needed imminent medical attention, the agent designated in this document could make the required decisions. 

Contingent Trusts

Minor children who inherit property do not have legal authority to mange the property until they are 18.  Depending on the value of the property inherited, a child who inherits may need a custodian under the Texas Uniform Transfers to Minors Act to receive and hold the property, or alternatively the appointment of a guardian to manage the child's estate.  One way to avoid the necessity of a custodian or guardian, while ensuring children gain access to their inheritance at a responsible age, is to include Contingent Trusts in your Will. 

A Contingent Trust is a trust created by your Will which holds a child's inheritance until a specified age or ages.  For example, many people request the trust be drafted to allow the Trustee to make distributions to the child for his or her health, education, maintenance and support, with 1/2 of the trust property distributed to the child at age 25, 1/3 of the remaining property at age 30 and the balance at age 35.  Once the child reaches the maximum age established in the trust, the trust terminates and the balance distributes outright to the child.  This distribution scheme ensures the child does not gain access to the property until he or she is mature enough to handle the inheritance and distributing the funds in portions prevents a child from "blowing" all of the property at one time.    For the very wealthy, this scheme allows for children be taken care of, while not saturating them with funds, enabling them to do nothing with their lives.

Any person with minor children who is executing an estate plan should make sure their Will contains Contingent Trusts.

For most parents, their children are their pride and joy.  Don't fail to plan for their futures.  Make sure you secure a comprehensive estate plan which takes into account the needs of those most important to you, your children.