A large amount of women hold a substantial amount of wealth in this country, however, many do not take the correct steps to protect their assets. It’s a simple fact that Women live longer than men! By the time a woman is 85+ she will outnumber men by 25% and she is 9 times more likely to live past 100 than a man. When the husband gets ill, becomes disabled or passes away, it is the WIFE who is left to deal with the couples finances. Therefore, it is necessary for women to get more involved in the couple’s finances well before any of these life changing events occur. What should a Woman avoid?
Putting off Estate Planning. Probating an estate without a will takes longer, cost more money, requires more court involvement and the state law determines who gets your possessions. But the biggest reasons you should have a will is to keep the family harmony! There’s no excuse for putting your family through the drama of trying to probate an estate without a will!
Trying to Do It Yourself! There are numerous ways to transfer assets upon death and a will is just one of them! There are also numerous documents you may need depending upon your own circumstances.
- Who gets your stuff once you pass?
- Who gets the responsibility of being your executor and what does that mean?
- Who makes decisions for you upon disability or incapacitation?
- Who makes burial decisions once you pass?
- Do you need a Special Needs Trust now or upon your death so your spouse or child doesn’t lose disability benefits?
These are all good questions to iron out with a professional! The cost of preparing a will by using a professional should not prevent you from being prepared. You can spend a little now or a lot later! However, the main reason you should leave it to the professionals is because doing it your self means there is good chance that you will make a mistake! I have had small and large estates where the person used a computer form incorrectly and it left us trying to figure out what they wanted to accomplish and cost the beneficiaries additional unnecessary expenses. I have also had clients write their own will giving away each of their assets to a specific person, but they forgot about after acquired items or potential future litigation.
Failing to Understand your financial situation. Many women find themselves lost when their husband passes away or becomes incapacitated because he was the one that handled the finances. While you may not want to be the one to deal with the bills on a daily basis you should always know what assets you have as a couple, how those assets are disposed of upon death, and what your estate plan is as a couple.
Failing to Probating Husband’s Estate. Women are more likely than men to put off probating their spouses estate. Many women think that they get it all so there is no need to probate, but this always causes problems down the road. It is necessary to probate the will to transfer assets such as, bank accounts, investment accounts and real estate. What happens when you want to sell or refinance your house and it is still in both names? What happens when you pass away and your children try to probate your estate and there are joint accounts or property?
In Texas, a Will can only be probated within 4 years of death unless there are extenuating circumstances and then it can only be probated as a Muniment of Title. So waiting to probate a Will seriously limits your options! Do you really want your children to have to deal with your husband’s estate years down the road? Do you really want the Court to tell you that you now only own one-half of your house because you failed to probate?
If your husband doesn’t have a Will, then it is important to probate now rather than later! The main reason is because you or your children may not be able to find witnesses in 10 or 20 years. So as you can see it is very important to consult an attorney after your spouse dies to discuss the ways you can go about making sure you preserve your rights.
Failing to Consider the Possibility of Incapacity. Women live longer and are more likely to be the caregiver of their husbands or parents, so it is likely that a woman is going to have to deal with long-term care during her lifetime. For this reason, it is important for women to be informed, involved and understands her financial affairs. Here are a few questions you need to discuss with your estate planning attorney are:
- Do I need a Guardianship Designation? It lets you chose now rather than allowing a Court to decide who will have control over your person and finances if you become incapacitated or the POA’s are not enough.
- Do I need to provide for a Special Needs Trust for disabled or incapacitated spouses or children? If your spouse or child receives financial assistance, you would not want to leave them assets that would affect this assistance.
- Do you need a Lady Bird Deed? This tool could help preserve your home to be left to your children at your passing being used to pay your creditors.
Failing to Consider Burial Plans. Since you will likely outlive your husband, have you considered that it will be up to you to make the funeral plans after his passing. Many women are too upset about their loss to handle these arrangements so it is left up to the children or funeral home. But what if you and your husband could make these plans in advance of either’s passing? This doesn’t mean you have to purchase burial plots and pay for burial plans! This just means you have a written plan in place and designate an agent to carry out this plan after you are gone. It makes sense to have such a plan because it is easier on the remaining spouse who has to deal with the loss or with the spouse’s other family members.
Many people know they can find the Statutory Power of Attorney form online. But what they do not usually understand is the extent of the authority they are giving to their agent and how the form needs to be filled out properly to be accepted once incapacity occurs.
Giving a person agency over your financial affairs means they step into your shoes and can do all kinds of things, such as, sell your house, cars, spend your money, make investments on your behalf, etc. Therefore you should makes sure you do not not give away too much authority!
Texas law does provide that an agent under a power of attorney owes the principal a fiduciary duty. However, many times it is all but difficult to recover lost money or assets because the agent has already spent the money or disposed of the assets.
Therefore, the important lesson is to choose your agent carefully and use an attorney to make sure the POA does exactly what you need it too!
I constantly have clients that open small businesses and they tell me they are using money from friends or family members. I try to warn them about the downside of such arrangements and how to avoid future problems. There are several big mistakes that most people just do not think about in the beginning! However once a problem arises it is usually too late!
Recently I found this great new article that sums it up quite nicely.
Four Landminds to Avoid! by NFIB.com
I do not usually endorse specific businesses but if you are a small business owner you should seriously think about joining an organization called NFIB (“National Federation Of Independent Business”). This organization was formed to bring together small business all over the country and give them a very big voice!
These are 13 things I think all associates should know when starting out in a firm. I hope they help you along your way to becoming a dynamic attorney.
- Respect your Firm. Your firm’s reputation has taken years to establish or is just getting started but either way its reputation is important. Keep in mind that how you act with people in business and social settings can affect the firm’s reputation.
- Respect the Staff. The staff is your most valuable asset. Many times they know more than us and can help you a great deal. As attorneys we sometimes get so busy we forget to “be nice” when asking for help but it really goes a long way.
- Respect the Courts. The court staff is your second most valuable asset. They decide when your hearing is set, when your case is set, help you when you make a mistake, and have the Judge’s ear. Remember the Judge hired them, not some personnel manager. Don’t be dismissive or complain about or to court staff. They aren’t going anywhere and anything you tell them goes straight back to the Judge. Also don’t ever bad mouth opposing counsel because they might just be good friends with the Judge.
- Look the Part. As attorneys we need to set an example for our staff, which means dressing like a professional. When you dress casual, it gives the staff and other attorneys the impression that you don’t take your job seriously. So if you wouldn’t wear it to court then don’t wear it to the office.
- Just do it. When a partner of the firm asks you to handle legal work for them, you just do it. You find a way without making excuses! When you are asked to work on something, then find out when the attorney wants it and when the absolute deadline is so you can plan accordingly. Then get it done.
- You are never 100% right. When a senior attorney asks you a legal question that you are not 100% sure of (which is always) say “I think …..________(fill in the blank with what you think) but let me confirm that for you.” Then go confirm it because the law may have changed since the last time you looked at the issue and you would never want to steer an attorney in the wrong direction.
- Being busy is no substitute for being productive. Billable hours are important, but the most valued associates are those who not only bill, but get the job done correctly. Be a finisher.
- Don’t make excuses. You may get an occasional unfair review, or you may not get along with a particular partner, but law firms are meritocracies. You must own up to your shortcomings, failures and disappointments and learn from them.
- Be the associate everyone thinks they need. You have no idea how much partners value good associates and detest bad associates. They always notice a bad attitude, how you treat the staff, subpar work or a disinterest in your job.
- Learn to develop your own clients. You’ll never develop clients sitting behind your desk. You may not consider yourself a “schmoozer” or think that networking is important. Get over it. So you were told that generating business is not important as an associate? How do you think you’re going to stack up when being reviewed against your colleague with a book of business? If you don’t know how to get started, ask someone!
- Office Hours mean something! If the office has set hours then make sure you are ALWAYS in the office during that time, no exceptions! Otherwise how can a senior attorney utilize you?
- Take vacations. Enjoy your time off, recharge your batteries, and reconnect with family and friends. Just kick butt before you leave and when you get back! Make sure the managing partner and any other attorneys you work with on a regular basis knows you are out but always reachable.
- Stay confident. You are going to screw something up because no one is perfect. You may get reprimanded for it, but you need to stay confident and aggressive. A timid, defensive-minded lawyer will be stressed out, dislike her job and not be very good at it.
This Article was originally published by Building Savvy Magazine (2014)
Most builders are all-too-familiar with the phrase, “Of course we will need a personal guarantor on this note.” Builders in Texas are often expected to ensure the debts of their companies, making them “personal guarantors” for those debts. This practice is not only common in the construction industry, it is expected. But, a bank would never pass up the deep pockets of a business to pursue the personal assets of the individual guarantor, right? Wrong. In Texas, when a personal guarantor waives certain rights under a note, without the same being waived by the guarantor’s company, the bank is left with only one option: sue the individual, not the company!
Texas is generous in protecting borrowers from the sometimes-shady acts of creditors. One of these generosities is Texas’s enactment of anti-deficiency laws. These laws, for example, prevent a bank from foreclosing on a $1-million note secured by property with a fair market value of $1 million, purchasing the property at its own foreclosure sale for $400,000, and then suing the borrower for the $600,000 “deficiency.” The rationale is that, through foreclosure, the bank has recaptured the full amount of the debt—$1 million worth of assets—regardless of the amount it received at foreclosure. A bank is therefore prevented from collecting the same debt twice (i.e., obtaining property at a discounted rate plus a deficiency judgment). Unfortunately however, Texas’s strong preference for “freedom of contract” has allowed banks to utilize language to waive this anti-deficiency protection.
This type of waiver is particularly dangerous for personal guarantors. For instance, imagine that in the situation above, the bank had allowed the original borrower to retain its anti-deficiency protection but had required the personal guarantor to waive the same protection. After foreclosure, the borrower would owe nothing due to the anti-deficiency laws because the bank has received $1 million worth of assets. Technically, however, a “deficiency” still exists on the note because the bank received only $400,000 at foreclosure, which is $600,000 less than the original debt. It is important to understand that nothing prevents the bank from collecting the $600,000 deficiency from the personal guarantor if the guarantor has waived his or her anti-deficiency protection.
So although a guarantor is usually liable only for the amount owed by the original borrower, which in this case is $0, without anti-deficiency protection, the guarantor remains on the hook for the full $600,000 deficiency. It is still unclear whether a court would allow the borrower—the guarantor’s company—to intervene in a suit against the guarantor and assert these anti-deficiency laws on the guarantor’s behalf. It is clear, though, that personal guarantors should seek to avoid this situation altogether. If the bank allows a company to retain its anti-deficiency protection, the personal guarantor should insist that he or she be allowed to do so as well.
Kyle B. Fonville is an associate with Decker, Jones, McMackin, McClane, Hall & Bates, P.C. in Fort Worth. His practice focuses primarily on civil and commercial litigation, including construction matters, and appellate law. He can be reached by phone at 817.336.2400 or by email at email@example.com.
Stephen L. Polozola is a partner with Decker, Jones, McMackin, McClane, Hall & Bates, P.C. in Fort Worth. His practice focuses primarily on construction law matters. He can be reached by phone at 817.336.2400 or by email firstname.lastname@example.org.
What a wonderful explanation of some important common sense!
1. MONEY! If you have become intimately familiar with the billable hour and retainers then you know what I am talking about. Reading billing statements showing entries for lawyer time for discussing who gets “this” or “that” is painful. Clients find themselves asking “I have to pay a thousand dollar bill from my attorney because my ex-spouse’s attorney called her five times to negotiate the china cabinet?” How does that make sense? If spouses are able discuss what assets and debts go with whom, then they will save money. It goes without saying that the attorney’s fees factor can grow exponentially when there are parenting issues.
2. It’s better for the kids. I’m just a family law attorney, but how can children learn to resolve conflict if their parents can’t agree on a pick up time or child support? They may learn how to build walls, ahem, I mean boundaries, but they…
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On the death of the husband or wife, leaving a spouse surviving, the homestead shall descend and vest in like manner as other real property of the deceased.” TX PROB CODE § 283. Also, the surviving spouse is entitled to retain a constitutional survivor’s homestead right for life or for so long as the survivor elects to use the homestead. This right is not affected by the deceased spouse conveying the property to a third party through their will.
Here are a few questions which are regularly asked with regards to surviving spouse’s homestead rights:
1. Can the deceased spouse’s administrator force the sale of the house?
Constitutional rights protect a homestead against forced sale and partition so long as the surviving spouse chooses to use and occupy the homestead. TX PROB. CODE § 284.
2. Does the surviving spouses rights end when move out of the property? Have they abandoned their homestead rights?
The surviving spouse’s right to occupy or use the homestead for life or for so long as the surviving spouse chooses to do so. It is not required that the surviving spouse continuously reside in the property to be considered as using it.
3. Who is responsible for maintenance on the property?
The surviving spouse will be responsible for making repairs and generally maintaining the property, but the duty to repair does not go so far as to require that the property be maintained in the same condition that existed when the homestead right was originally established.
4. Who is responsible for the mortgage on the property?
The spouse is responsible for the mortgage interest and the heirs/beneficiaries is responsible for the mortgage principal. A purchase money lien is not subject to the homestead exemption, thus the property could be foreclosed upon default. TX PROP CODE § 41.001(b)(1).
5. Who is responsible for the insurance premiums on the property?
The surviving spouse is not responsible to insure the property against loss. Even if the surviving spouse did insure the property, the insurance proceeds upon fire or damage would be made to the surviving spouse and not to the heirs/beneficiaries. The heirs/beneficiaries (children) would be responsible to carry insurance on the property to preserve their asset.
6. Who is responsible for paying the taxes on the property? The heirs/beneficiaries are usually responsible for all tax payments, however, if the spouse or minor children retain a homestead right then they would be responsible for the property taxes. The homestead is not exempt from forced sale to pay delinquent taxes. TX PROP CODE § 41.001(b)(2).
Disclaimer: The content of this article is provided for informational purposes only and does not constitute legal advice.