Financial Estate Planning

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Our guest co-author is Estate Planning Attorney, Rhonda Brink. Rhonda enjoys current membership on the Planned Giving Advisory Council of the University of Texas. Her professional credentials, publications and activities are extensive. She is supported in her efforts by her husband of twenty-seven years, Robert L. Green, Jr., and three children: Brian, father of her first grandson; Lynn, student of veterinarian medicine at Texas A&M; and high school junior, Leslie. She enjoys, time permitting, weekend farming at “The Brierpatch” in Burleson County, Texas.

DO YOU HAVE A WILL?

No? Well the State of Texas has prepared one for you. Would you like to give them some input?

That is the typical way most people begin the estate planning process, with the realization that there is already a process and procedure in place to handle our healthcare in the event of incapacity and the disposition of assets at death. The unfortunate part is that much of those decisions are made based on years of legal precedence which includes the federally recognized status of marriage. Without the protection of access to marriage, our family is legally defined not by who we love, but rather by who is our family based on blood relation or legal definition (marriage, adoption, etc.). For some of you, you may not currently have a “special someone” in your life or prefer that all of your money revert to your family. If that is the case, you can stop reading here. But for some of us, we want to make sure that our partners are protected and will be afforded the right to care for us, should that need arise.

So gay couples, as with straight couples who are not married, can ignore these facts or deal with them. On the L Style side, we covered the health and personal care side of estate planning. Here, we will discuss estate planning for assets and finances which may involve a broad range of legal documents:

  •  writing a Last Will;
  • considering how probate works and whether to use a revocable trust to dispose of your property;
  • analyzing the tax consequences of a plan;
  • disposing of assets outside your Will;
  • naming beneficiaries of retirement and employee benefit plans, insurance and accounts with survivorship; and
  • devising methods of ownership of wealth

All of these are intended to achieve continuity of management, favorable valuation of your estate for tax purposes and protection from adverse claims on your estate.

Not only can you use these documents to determine who gets what, but you can also decide whether you want your beneficiaries to manage their inheritance. To maximize a beneficiary’s control of your property, leave assets outright to your beneficiary. To provide management or to control who ultimately receives property, leave property in a trust for a beneficiary. Even if a trust is used, you can decide whether to give your beneficiary the flexibility and power to determine who, among a designated group, ultimately will own your assets held in a trust.

Common to all estate plans and Wills are choices for the management and disposition of property among your children, if any. Such decisions apply to all young beneficiaries – including nieces and nephews. Trusts for the benefit of such beneficiaries may be indicated.

You will need to decide who is going to handle the affairs of your estate (executor), the administration of any trust (trustee) and the personal care of minor children, if any, (guardian). In Texas, your Will generally will appoint an “independent executor” and authorize “independent” administration of your estate, so that these tasks can be performed without expensive, time-consuming involvement of and supervision by the probate court.

You should select an agent to handle your financial and legal affairs by drafting a durable general power of attorney. Some of your financial assets will pass to the designated beneficiary and thereby avoid the entire probate process. These beneficiary designations are extremely important because try as they might, even families and courts can’t try to interpret their intent in any other fashion other than how you created them. Your beneficiary designations for insurance, employee benefit plans and IRAs, together with the designation or beneficiaries or survivors on deposits and investment accounts should coordinated with your Will and estate plan.

A living trust, an alternative method to achieve your estate planning objectives, may offer particular benefit if you anticipate that someone, particularly a relative, may challenge your estate planning choices. Your plan may also need to address:

▪   arrangements to protect your property, identify it, and separate it from your partner’s property;

▪   the rights of future or potential creditors of you or your beneficiaries;

▪   the special needs of beneficiaries or members of your family who may be disabled or unable to provide for themselves; and

▪   the disposition and management of business interests that you may own alone, or together with your partner

Why would anyone, of any relationship status, let these significant financial decisions be made by others – especially by a judge that does not know your needs or by a family that may not recognize them?

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