texas estates

When should you amend your trust?

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Many times people create trust during their lifetime and they face situations that may require amendments to the trust.  If changes are required to your trust, a trust amendment is the proper way to make the changes. Handwritten marks and notes on the trust document are not considered legal changes. An amendment specifically states what paragraphs of your trust is being changed, and sets forth the new trust language. The amendment may be short, or it may be so drastic that it actually changes the entire trust, from the first word to the last.

What are some reasons why you may need to amend your trust?  Some trusts are completely out-of-date, or irrelevant due to changes in the statutes, case law, or just poorly written. Some trusts may have provisions that are illegal, or contrary to the client’s wishes. Some people need their trusts revised or updated because of changes in their wealth or family circumstances.

Lengthy or complicated trust amendments may be difficult, costly, time consuming and hard to follow for future trustees. Therefore, a good estate planning attorneys will recommend a trust restatement. A trust restatement is a document which completely restates the entire trust agreement, and a new trust is created through the amendment and restatement.

Although a restatement is basically a new trust in the form of a trust amendment, the name of the old trust and the date that it was established remain the same.  Therefore, there is no need to obtain a new tax identification number, move funds to new accounts, change deeds, etc.

With the many tax law changes in recent years, concerns about future ill health and incapacity, or with changes in your family situation, it is recommended to have your trust reviewed by an attorney. A simple amendment may be all that is required or it may be necessary and more efficient for the attorney to restate the entire trust.

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Reasons to Sell Royalties

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The sale of royalty interest provides the opportunity to liquidate and clean up the assets of an estate to avoid foreclosure delinquencies or estate tax problems.

Some people sell in order to eliminate future legal expense to Probate their estates. For the Small Interest Owner, the cost associated with transferring ownership can exceed the perpetual value of the royalty interest.

It is very important to understand cost or percentage depletion of a well when computing taxes. Some interest owners do not want to incur extra costs or out-of-pocket expense for the tax preparation and administration.

Some people feel it is cumbersome to try to keep track of royalty interest income and the taxes associated with the interest. This seems to be especially true for owners of small interests. By selling your interests now, you will no longer be required to pay property taxes, which can simplify your taxing preparation or taxing problems.

With energy prices at an all time high, this is an excellent time to convert royalty interest into cash and liquidate. The Cardinal Rule is, “Buy Low, Sell High”, with the oil and gas commodity markets at an all time historic high, there has never been a better time to sell.

There are various companies that will buy your interest, just make sure you go with a reputable one so you are not taken advantage of when selling.

Estate Planning using Community Foundations

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If you have a desire to pass on some of your wealth to the charity of your choosing, there are numerous ways to accomplish this goal.  You could make a bequest in your will to your favorite cause, you could create a charitable trust, you could create a foundation, or you could give to a community foundation during your life or after death. 

A Community Foundation can help you reach your charitable goals as follows:

  1. Build a personalized philanthropic plan with assistance from our expert staff, who will work with you to carefully understand your charitable goals and interests.
  2. Use the Community Foundation’s knowledge of your region and its nonprofits to enhance your giving.
  3. Choose to remain anonymous, if you want to protect your privacy and deflect much unwanted solicitation.
  4. Create a permanent legacy for future generations.
  5. Bring your family together around giving and pass along your philanthropic values to the next generation.
  6. Develop a family mission statement and define charitable interests and goals.
  7. Develop a list of organizations and programs that match your family’s interests.
  8. Facilitate annual family meetings to consider grants from your fund.

If your interested, you can contact the local community foundation in your area.  Most states have an association of community foundations to assist you in picking the right one.  In my area, The Community Foundation of North Texas at  817-877-0702.