Archive for December, 2012

What Every Party Involved in Contesting a Will in Texas Should Know

Saturday, December 22nd, 2012

One important consideration that must guide the drafting of a will in Texas and other states is the exercise of extra care where there are motivations for a party to challenge the will. While contested will proceedings are relatively uncommon, there are situations where the wishes of the decedent make it more probable that a will may be contested. These situations require that the party drafting the will anticipate the potential motivations to challenge a will and carefully draft with such motivations in mind. Generally, a will contest is more likely when an heir will receive less through the will than under Texas intestate law.

It is important to anticipate the possibility of a will being contested in the following situations:

• Children are not treated equally
• The devisor is advanced in age or mentally disabled
• Dramatic changes in their indicated disposition of assets
• Unpredictable atypical behavior by the devisor
• Favoring of a distant relative or non-relative over a close relative
• Unreasonable extensive limitations imposed on the bequests

While these do not represent all possible situations where there is a higher probability of a will contest, these are common scenarios that provide motives to challenge a will. Arlington probate attorney Thomas D. Reino understands that contested probate proceedings are complicated by the fact that the parties in dispute may be close relatives. Sometimes we are able to resolve such disputes through skilled negotiation to avoid the lingering animosity and damage to family relationships that can result from acrimonious litigation.

There are certain issues that must be considered before any potential will contest including the following:

Who May Challenge a Will in Probate: Texas law permits any “interested party” to contest a will in probate proceedings including spouses, heirs, devisees and any other party that may have a legitimate claim against the estate or a property right in the estate.

Potential Adverse Impact of a Will Contest: Some wills contain “no contest” provisions that can impose severe penalties on those who unsuccessfully challenge the terms of a will. These clauses must be identified and the consequences of contesting the will evaluated if a will contains such a provision. A party who does not prevail when contesting a will that contains such a provision may face harsh consequences like forfeiting any form of inheritance.

If you are considering contesting a will in Texas, you should seek legal representation from an experienced Texas probate attorney. Once the process of probating a will has been initiated by filing an application for probate, you must file a will contest stating a basis for challenging the will, which may include but is not limited to the following:

• Mistake
• Lack of capacity
• Undue influence
• Fraud
• Revocation through a subsequent instrument (e.g. later will) or physical act (e.g. burning the will)

At our Arlington probate law firm, Thomas D. Reino represents clients on both sides of contested will probate proceedings. If you are involved in contested probate proceeding in Texas, we invite you to get more detailed information by contacting us at 817.303.2133 or sending us an email at tom@tomreinolaw.com so that you can set up an initial consultation.

Using a Spendthrift Trust to Protect Heirs from Creditors and Divorce Judgments

Friday, December 7th, 2012

Many parents have a son or daughter who struggles with personal demons like drug addiction, alcoholism or gambling addiction.  If you are engaged in estate planning, an heir that has been through rehab programs with limited success can lead to concerns about how to protect this heir from making bad decisions.  While you may feel conflicted because you do not want to exclude your loved one from inheriting part of your estate, you also may feel that the decision to leave a lump sum of cash or assets to your troubled heir will only make matters worse.  The funds inherited may be used to finance the vices of a troubled heir and be quickly squandered away.  Texas estate planning attorney Thomas D. Reino frequently helps clients address these conflicting concerns by crafting a “spendthrift trust.”

Texas estate planning laws like those in other states permit a Grantor to insert provisions to provide for a family member while protecting the inherited funds or resources from mistakes arising out of the irresponsibility or immaturity of the beneficiary of the trust.  A spendthrift provision in a trust essentially provides that the beneficiary cannot be required to use the assets in the trust to pay the beneficiary’s creditors.

The protection provided from the beneficiary’s creditors only remains effective if the trustee adheres to an “ascertainable standard’ when making distributions from the trust.  In other words, distributions cannot be made for just any frivolous purpose so most spendthrift trusts permit disbursements to be made for education, health, support or maintenance.  When the trust specifies this type of specific legitimate grounds for making a disbursement to the beneficiary, the trust arrangement meets ascertainable standards so the safe harbor from creditors is maintained.

The assets in a spendthrift trust are protected from the spouse of the beneficiary in case of divorce and creditors seeking to enforce a debt or recover damages from a court judgment.  When you are engaged in estate planning, these valuable protections of the assets left to a beneficiary make a spendthrift trust a laudable provision even where you are not concerned about the decision making ability of the beneficiary.  The alternative to a spendthrift trust is leaving all of the assets directly to the beneficiary, which may make them available to involuntary transfer by a creditor or a spouse in a divorce proceeding.

At our Arlington estate planning law firm, Thomas D. Reino carefully evaluates your estate to create an estate plan that is appropriate for your specific situation.  While this article provides a brief overview of the benefits and requirements for a spendthrift trust in Texas, the best way to get more detailed information is to contact us at 817.303.2133 or send us an email at tom@tomreinolaw.com so that you can set up an initial consultation.