Trusts can be useful tools in a divorce proceeding especially when a spouse has a direct or indirect interest in a trust. Counsel should identify specific trust features that could make a difference and impact whether trust assets can be reached, potentially affecting alimony and property division determinations.
Within the context of a divorce, trust and estate attorneys should understand specific discovery techniques family law practitioners may use to determine whether a spouse has an interest in a trust, whether that interest is material, and what attack can be made against the trust. The key is make sure your attorney is knowledgeable before you do any estate planning in anticipation of a divorce.
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!
Sometimes our clients are the smartest people we know!
Note from Kelly:
A client wrote this blog after her divorce was final, with the benefit of hindsight and (probably) the anxiety of my final bill. This client was one of the most organized clients I have had. She also listened well, especially when I told her things that were difficult to hear. This client is NOT an attorney and the below information is not legal advice.
“Choosing to end a 19 year marriage, or any marriage, is not an easy decision. As Dr. Phil says “you have to earn your way out of the relationship.” Once you have decided that it is the right decision for your life, there are steps you can take to make this excruciating experience a little less painful. First and foremost, make sure you have a good therapist to walk you through the emotional process of divorce. The attorney you decide upon is NOT…
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This article was originally published by Plaid for Women https://www.plaidforwomen.com/read-post/two-regrets-of-a-divorced-woman/
The Family Courthouse is paved with women who claim the system is against them. Many feel that they waited too long and some wish they had tried harder to reconcile. Beyond the emotional wasteland left by a divorce, a divorced woman has many economical regrets. Here are two I have heard over and over again:
1. That they didn’t stay employed.
Some women report being frustrated that they were not entitled to spousal maintenance or did not get as much as they would have liked. This is especially true for the homemaker, but in our changing society where women are increasingly doing the “bread winning,” it can be true for husbands as well. Texas law allows for monthly spousal maintenance (a/k/a support) up to $5,000 or 20% of an ex-spouse’s gross income, whichever is lower, if a spouse can prove…
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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.