What is a Revocable Living Trust?

What is a Revocable Living Trust?

What is a Revocable Living Trust?

How does a revocable living trust work? This question is an important matter that you can discuss with the experienced Texas estate planning attorneys at Ibekwe Law, PLLC, as soon as a potential need arises. If the question of how living trusts work in Texas is on your mind, you may feel overwhelmed. A revocable living trust, or living trust, is a legal document created during a person’s lifetime that permits a chosen trustee to manage that individual’s assets to benefit the current and future beneficiaries.

The dedicated Texas estate planning attorneys at Ibekwe Law, PLLC (512-505-2753) recognize just how serious questions related to living trusts are. Our team is committed to finding answers that work for you or your loved one who may need a living trust.

How Does a Revocable Living Trust Work?

Most people think of a last will and testament as the most common way to pass an estate on to beneficiaries. Another way is to create a revocable living trust. Depending on your particular circumstances, a revocable living trust may be the best choice for your estate plan.

To create a revocable living trust, a person (the grantor) signs a trust agreement naming a person(s), a corporation, or both as trustee to manage the trust. In Texas, the grantor and the trustee can be the same person. If you name a trust company or bank as trustee–instead of an individual, it ensures that a professional trustee will always be available to act in the best interest of a grantor.

A revocable living trust usually allows property to be managed for the grantor’s benefit. Usually, the grantor retains certain rights over the trust during their lifetime, including:

  • the ability to direct the trustee to give away all or any portion of the trust property;
  • the ability to revoke or change the living trust whenever they want;
  • the ability to make discretionary distributions of income and principal to the grantor and/or the grantor’s family

A revocable living trust acts as a last will and testament when a grantor dies, and property is distributed to beneficiaries following the trust document.

Generally, it’s best to fund the trust while the grantor is living, rather than when the grantor dies; that ensures continuity of asset management and financial support, should the grantor face a disability.

To fund a trust during a grantor’s lifetime, you must title real property, securities, and other assets in the name of the trust. Retitling property is not required for trusts funded at death when the probate estate is “poured over” into the trust. However, funding a trust at death may not avoid the necessity of probate.

Benefits of Revocable Living Trusts

1. Continuity of Management During a Disability

A revocable living trust is a great way to plan for your property to be used for your benefit– if you become mentally or physically incapable of managing your affairs.

The continuity of management is possible when a financial power of attorney is signed. Still, third parties (banks, brokers, and transfer agents) often have more trouble dealing with a power of attorney than a trust agreement. And, if the designated agent cannot act, a financial power of attorney will not be helpful.

Suppose you become disabled and don’t have a revocable living trust or a power of attorney. In that case, you may face a lengthy and expensive court proceeding to appoint a guardian for you before your property can be used for you (or your family).

Even after a guardian is named, ongoing court supervision for managing investments and disbursements is usually required.

2.  Flexibility

With a revocable living trust, out-of-state individuals or trust companies can administer your property at death if you choose. Also, it is usually easier to make changes to a revocable living trust than to a will.

3.  Avoiding probate

Probate is the court process required to determine whether a last will and testament are valid. Because probate can be costly and time-consuming, avoiding probate is one of the benefits of a revocable living trust. For example, if you have homes in more than one state, avoiding probate may be a significant benefit because you can avoid more than one probate proceeding. However, every state has a different probate process, so consult a local attorney.

4.  Immediate Availability of Assets at Death

Revocable living trust assets are available immediately after death to pay estate taxes, administration expenses, and debts without waiting for a probate court decree. If the trust is funded before death, the property in the trust remains in the trustee’s name before and after the death. It is immediately available for liquidation should the need arise.

5.  No Issue with Missing or Destroyed Originals

Original wills must be provided in court to avoid the suspicion that the will was revoked. Usually, one original must be produced at death. Because revocable living trusts avoid probate, many originals may be signed, and one original can validate property held in the trust at death. A revocable living trust can simplify property transfer at death if the original will cannot be found or is destroyed.

6.  No Interference with Investment Management

A primary benefit of revocable living trusts is providing uninterrupted investment management should the grantor become disabled and after the grantor dies. If you previously transferred assets to the trust, you don’t need to retitle securities after death. Additionally, depending on the grantor’s estate’s cash needs and investment objectives, there may be no need to create a new investment strategy.

Disadvantages of Revocable Living Trusts

A few disadvantages to revocable living trusts arise from the different treatment of trusts and wills under specific property laws.

1.  Funding Your Trust

In addition to creating your trust, you must take action to fund it. You must change beneficiary designations on accounts owned by the grantor. You must change your property to a trust’s name to include it in a revocable living trust, which may be difficult and involve costs like filing fees. As part of your estate plan, using a pour-over will transfer all additional assets into your revocable trust, so no assets have to go through probate.

2.  Adapting to Changed Circumstances

The grantor must be sure to update the provisions of a revocable living trust as things change.

SEEK THE PROFESSIONAL LEGAL GUIDANCE OF AN EXPERIENCED ESTATE PLANNING ATTORNEY

Trusts are very complex. If you have concerns about how trusts work, seeking professional legal counsel is well-advised. The experienced Texas estate planning attorneys at Ibekwe Law, PLLC understand your cares and are dedicated to helping you find the most suitable path forward, given your circumstances. For more information, please do not hesitate to contact or call us at 512-505-2753 today.

Who May I Nominate as Guardian for My Child?

Who May I Nominate as Guardian for My Child?

Who May I Nominate as Guardian for My Child?

An experienced estate planning attorney has the legal insight, compassion, and commitment to help you nominate as guardian the person who is right for you and your child –thus providing you with the peace of mind every parent seeks.

When you choose someone to nominate as a guardian for your child in the state of Texas, you assign someone who will assume the role and responsibilities of a parent for your child if you are no longer able to do so. When you nominate someone you trust implicitly to take over in your role as a parent, you make a critical decision that should provide you with peace of mind. You want to know that your child will be well-loved and well cared for in the unlikely event that you and the other parent will not be there for them. [Note: Texas allows for the nomination of a guardian of the person (day-to-day care) and the estate (finances and property) of your child; this can be one role or two separate roles. This blog post will focus on the guardianship of the person.]

Nominating a guardian for your child is an important legal task with significant legal ramifications. In Texas, the dedicated estate planning attorneys at Ibekwe Law, PLLC can help ensure that you make and appropriately execute the decisions that are right for you and your child. To learn more, please do not hesitate to give us a call at 512-505-2753 today.

The Role of Guardian

The person you nominate as guardian for your child will do all the things a loving parent does, including providing him or her with life necessities, such as food, clothing, and shelter. In addition, your child’s guardian will be called upon to make the big-picture decisions for your child that parents are responsible for making, including:

  • Where your child will live;
  • Where your child will attend school;
  • The type of religious upbringing your child will have;
  • The extracurricular activities your child will participate in; and
  • The medical care your child will receive.

Time is Not on Your Side

No one expects to be gone suddenly, and while it is unlikely that your child will be left parentless, the fact of the matter is that it can happen. Taking the time to nominate a guardian can provide you with considerable peace of mind. If the worst does happen –and you and your child’s other parent cannot continue parenting him or her for any reason –you cannot go back and take care of business after the fact. This is precisely why estate planning law is so important and why it should not be avoided (although many people are inclined to do so).

How an Estate Planning Attorney Can Help

Because no one schedules their unexpected demise, having a plan regarding your child’s guardianship is critical, and an experienced Texas estate planning attorney at Ibekwe Law, PLLC can help you make these important decisions. In fact, our experienced estate planning attorneys help in all of the following ways:

  • By helping you to make an informed decision that takes your child’s best interests into careful consideration
  • By helping to ensure that the person you nominate to be your child’s guardian is both willing and able to take on the responsibility –and is likely to be accepted by the court as your child’s guardian
  • By reviewing your guardianship choices as time passes to help ensure they continue to support your intentions (life events such as divorce can cause you to reevaluate your choices)
  • By specifically including any wishes that are important to you regarding your child’s upbringing, such as his or her education or religious affiliation

It is essential to point out that changing the person you have appointed as your child’s guardian need not be an arduous task –and the person you remove need not know about the change.

Choose Your Nominee Well

It is vital to choose the person whom you nominate to be your child’s guardian well. The idea is to appoint someone you trust to carry out your wishes and love your child the same way he or she would love his or her child. Toward this end, it is a good idea to ask yourself all of the following questions:

  • Does the person whom you are nominating share the beliefs that are important to you?
  • Will the person whom you are nominating be able to provide your child with the life you want for him or her, including:
    • continuing to enjoy his or her favorite extracurricular activities;
    • continuing to attend the school he or she knows and loves; and/or
    • doing anything else that is important to you?
  • Does the person you are nominating have children of their own, and are the children close to your child?

Ultimately, you, your child (if he or she is old enough and mature enough to weigh in), and the person you are nominating must be comfortable with your decision. When you land on the right person, it should provide you with the peace of mind you are looking for, which helps to ensure that you are on the right track.

Who May You Nominate as Guardian for Your Child?

According to the state of Texas, you can nominate any adult whom you believe is fit to be your child’s guardian and who is not already a legal guardian of your child. You may be divorced from your child’s other parent –or were never married to them. The other parent will likely become your child’s sole guardian in the unlikely event that you die or become incapacitated as a parent (unless there is a very compelling reason for the court to deny parental rights).

When you die or are incapacitated, your family members could conceivably contest the suitability of the guardian you nominate, so it is vital to choose wisely. Memorializing your reasons for selecting the person you have can go a long way toward helping to ensure that the court will ultimately sign off on your nomination.

Now Is a Good Time to Discuss Nominating Your Child’s Guardian with an Experienced Estate Planning Attorney

Now is the right time to determine whom you would like to nominate as guardian of your child, and the accomplished estate planning attorneys at Ibekwe Law, PLLC in Texas are ready to help. Do not put off this momentous decision! Please contact or call us at 512-505-2753 today.

 

Generational Wealth and Estate Planning

Generational Wealth and Estate Planning

Generational Wealth and Estate Planning

Managing generational wealth and planning for what happens to your assets after you pass away can be a great way to help future generations in your family. A well-thought-out estate plan can be a love letter to your children, their children, and beyond. Individuals inheriting generational wealth can have many advantages, including the chance to avoid debts such as student loans. Generational wealth assets can include many different types of investments, including:

  • Real estate
  • Stocks
  • A family-owned or professional business
  • Bank accounts
  • Valuables
  • Land

However, planning for generational wealth is so much more than just estate planning. Estate planning typically involves deciding who will receive your property after your death and who will handle your affairs should you become incapacitated. It typically does not provide for what happens after your heirs receive their inheritance. A written generational wealth plan, however, can take care of future generations and make the most of your assets.

Passing on financial security to not just one generation, but potentially many others can be a great act of love and selflessness. Ibekwe Law, PLLC can help you make the best of your estate plan and include provisions for generational wealth planning. Contact us now at 512-505-2753 for a complimentary discussion and evaluation of your estate planning needs.

Generational Wealth Planning

Rather than keeping your aspirations for generational wealth planning to yourself, it can be beneficial to involve your entire family in the process. Together, you can discuss and devise a vision and strategy for how to build a family legacy. Talking about your generational aspirations with your loved ones, rather than deciding on a plan on your own, can bring the family closer together and lead to some meaningful and heartfelt conversations. Involving all your loved ones can also make them appreciate their responsibility for ensuring that future generations will benefit from generational wealth.

Maintaining Generational Wealth

Maintaining generational wealth can be tough. According to a NASDAQ report, 70 percent of wealthy families lose their assets by the second generation, and a staggering 90 percent by the third. According to a Prosperity Now report in 2017, Black people are on track to reach zero wealth by 2053! If you want to avoid this and continue passing on love and financial stability to your children, their children, and potentially beyond, you will have to consider how to keep and grow wealth. Some of the considerations can include:

  • Generational tax planning
  • Generational investment management
  • Education planning for following generations
  • Strategies for generational risk management

You may also want to consider placing some restrictions on how your money will be accessed to prevent individuals from “squandering away” funds on frivolities such as fancy cars and luxury vacations, for example. You may want to ensure that the money will instead be spent on education, setting up a business, or on other lasting benefits.

Concentrating on education and business ventures can help your descendants with creating their own wealth and “add to the pot,” which in turn can increase generational wealth for future generations rather than depleting funds. You can discuss with your family and memorialize in writing each generation’s responsibility to help the next one. Next generations should receive the same opportunities while maintaining wealth and increasing the value of the estate. Consult with an experienced estate planning attorney to determine how you could maintain generational wealth for many decades to come. Call Ibekwe Law, PLLC for help with your estate plan today.

Growing Your Assets Through Generations

While maintaining generational wealth will be an important goal of a generational estate plan, you may also want to ponder how your assets could keep growing through the generations. Life insurance benefits, for example, can be an excellent tool for helping to ensure the growth of generational wealth. Death benefit typically pays out a tax-free lump sum when the policyholder passes away. The beneficiaries can then potentially use the lump sum to purchase new life insurance policies for themselves, thus passing on benefits and wealth to the next generation.

Having a bulletproof legal framework in place can also help to grow your assets. Devising a solid plan with an experienced estate planning attorney can be crucial. Your attorney should have a complete understanding of the strategies that can be employed to ensure generational wealth keeps growing and benefits several generations and not only the generation after you.

Factors to Consider if You Are a Beneficiary

Inheriting wealth can mean inheriting a huge responsibility. If you benefited from generational wealth or inherited a considerable amount of assets, you may be wondering how you can pay it forward to those coming after you. Looking out for future generations can be a wonderful way to show your love and care for your descendants. It is never too early to start planning for the legacy you wish to leave behind. Having recently inherited assets or valuables can be an excellent time to speak to an estate planning attorney who can advise you on making the best of the assets you have received.

Things you may wish to consider when you intend to build generational wealth for your family can include:

  • Funding education of future generations
  • Reducing the tax burden for your descendants
  • Protecting wealth with adequate management such as trusts
  • Charitable giving considerations

The sooner you can start protecting your assets and growing generational wealth, the greater the benefits will be for your children and any following generations. Consider also that your children and grandchildren can benefit from your plan. For example, you can fund their education and help them develop their own businesses or stay out of debt.

Ibekwe Law, PLLC Can Help You with Generational Wealth and Estate Planning

If you intend to give future generations in your family the opportunities and financial support you believe they deserve, establishing a generational wealth estate plan can be an act of love that keeps on giving throughout the generations. However, generational wealth planning can be complicated and full of potential pitfalls.

If you want to avoid the statistics that indicate your wealth could be lost within a generation or two, having professional help can be crucial while estate planning. Your estate planning attorney will also ensure that your plan is drawn up correctly and valid under state law. Ibekwe Law, PLLC can help you with all the important estate planning steps for future generations, including making a will, planning trusts, and ensuring that your descendants pay the least amount of taxes possible. Call us today for a free consultation, and we can advise you on how you could leave a lasting legacy for future generations of your family: 512-505-2753.

Estate Planning For The Single Person

Estate Planning For The Single Person

Estate Planning For The Single Person

Everyone seems to want a bit of a fresh start in the new year. Resolutions are often made around health and business. Many people also make commitments regarding their finances such as vowing to spend less on credit cards or making sure that they stick to a budget. One of the best decisions someone can make at the start of a new year is to consider their estate plan. According to the United States Census, there are over 35 million single-person households in America. Many people wonder if they need to worry about estate planning as a single person. Estate planning for single persons is just as critical as for married people. The short answer is that no matter your life circumstance, you should consider visiting with an experienced estate planning attorney at Ibekwe Law, PLLC at 512-505-2753 about your financial wishes after you pass away.

Single with Children

If you are a single person with children, you should absolutely consider executing a solid estate plan for the benefit and future of your children. An estate plan does not just include the distribution of your finances after your death. A properly created estate plan will also afford you the opportunity to make decisions regarding who will be the legal guardian of your child following your death. You will also be able to leave your assets to your minor children through a proper estate plan and ensure their financial security, even if you pass away. Estate planning for the single person with children is critical to ensure not only your financial rights but your parental rights as well. Consider visiting with an experienced estate planning attorney at Ibekwe Law, PLLC to ensure your children are taken care of according to your specific wishes.

Single with No Children

Even if you do not have any children, it is important to understand that you are your estate. Who will make your decisions regarding your health care if you get into a serious accident and can not make those decisions on your own behalf? What if you become incapacitated in some way? Who will handle your financial affairs? Even if you do not have any family members that you would want to leave your assets to, perhaps there is a charitable organization that you want to bequeath certain assets to after you pass away. An estate plan does not just include passing on assets to children or other family members.

Estate planning for a single person with no children affords them the opportunity to make all of the important life decisions for themselves ahead of any catastrophic event. Without establishing an estate plan with a durable power of attorney or assigning a person to act on your behalf regarding medical decisions, a single person completely gives up their right to make these decisions for themselves. Additionally, if a single person passes away without a proper estate plan, they have simply given up their legal rights regarding their estate distribution and the Texas state’s intestate laws will unilaterally apply. These laws may not come close to what the actual wishes of the decedent were and therefore it is critical for every person, no matter the marital status, to ensure their legal and financial rights are protected both during life and after death.

Single Person with Few Assets

Many single people think that because they are not exceptionally wealthy, they should not consider making an estate plan. However, anything you own will need to be distributed upon your death. Make sure that the assets you do have go to either the people or organizations that you care about. Additionally, as previously mentioned, estate plans include much more than the distribution of assets. Estate planning for the single person with few assets can include health care directives and the appointment of someone to handle the single person’s finances if they remain physically or mentally unable to do so in the future.

Single Person with Limited Family

If you are a single person with a limited family or a small pool of key people you would wish to leave your assets to after you pass away, you should still consider an estate plan. It is likely that there is an organization worthy of your financial support, and creating an estate plan can help ensure that you support the organizations and charities you believe in, even after your death. Additionally, if you only have a limited family, you may want to seriously consider appointing a close friend to handle all of your finances or health care directives if you remain unable to do so. Without this legal appointment, some distant relative you do not truly know could end up making serious life-changing decisions on your behalf. Remember, an estate plan includes not only financial decisions, but health care directives as well.

Estate Planning for the Single Person

There are many other unique or unconventional circumstances in which having an estate plan can benefit a single person. Do you have any eggs frozen for future use in the anticipation of having children? Do you have a close family friend that has children you would want to support financially for their college education? Do you have personal items or family heirlooms you would want to go to specific people outside your family? Do you have a pet that you would want to go to a certain friend or family member? As a single person, there are many different scenarios that would benefit from having an estate plan. At Ibekwe Law, PLLC, we pride ourselves on helping every person achieve their estate planning goals. We look forward to the opportunity to ensure that all of your wishes are carried out both during your life and after your death, no matter your life circumstances. If you are single, you should take the time to consider visiting with an experienced estate planning attorney at Ibekwe Law, PLLC at 512-505-2753 to help you better understand all of your legal options and rights.

Motherhood Doesn’t Define Your Self Worth

Motherhood Doesn’t Define Your Self Worth

Motherhood Doesn’t Define Your Self Worth

Before I had kids, Mother’s Day seemed like the ultimate celebration of motherhood. I remember scoffing at mom friends who complained that nothing significant really happened on their “special” day.

Now that I have kids, I BELIEVE MY MOM FRIENDS! Mother’s Day can be a total letdown. It can also cause so much hurt for women who want to be mothers, single moms, and those who have experienced the loss of a child or mother.

I don’t have the magic solution for the perfect Mother’s Day. Here’s what I recommend whether or not you are a mama:

  • Communicate Your Needs and Desires. Let the people who matter know whether you want to be alone, go to brunch, hang out with your mom(-figure), or just spend time with the kids in your life.
  • Be Sensitive. All around us are people who have experienced loss. I have been there. Reach out to someone who is hurting. Plan a fun girls’ day with wine.
  • Mother’s Day Doesn’t Define Your Worth. It’s one day, but you are a woman all year round—spreading your positive feminine energy far and wide (biological kids or not). You matter whether or not you receive greeting cards or flowers. Mother’s Day can’t change that fact.

Fun Fact: The founder of Mother’s Day spent much of her life trying to undo the “holiday” due to the over-commercialization of the event.
I am grateful (all year round) to have children. This year, I planned and scheduled motherhood photo sessions from @cole_collective. This was my gift to myself. When my husband asked, I told him that I’d prefer to get new plants. for my garden in lieu of a family lunch. I’d be getting these plants anyway. I have no further expectations or wants for Mother’s Day.
Maybe you can set up yourself with a will as a gift to yourself! I can help with that. You have the added benefit of taking care of loved ones too.
What do you want to do (or not do) on Sunday?

Just Keep Swimming.

Just Keep Swimming.

Just Keep Swimming.

We’ve all heard horror stories about kids drowning because they don’t know how to swim. This is an unimaginable nightmare for any parent.

Hard Stats [i]

  • Approximately one out of five people who die from drowning in the United State are children aged 14 years or younger.
  • For every child who dies from drowning, five get emergency care for non-fatal water-related injuries.
  • Drowning is higher for kids aged 1-4 and for African-American children

I knew I had to do something to protect my children from this outcome. So, for the last year, I put all of my kids in swimming lessons. We go for thirty minutes once a week. ⁣The kids are so excited to be in the water.

  • My five year old is learning his third stroke—the backstroke. It isn’t pretty, but it’s getting there.
  • My three year old is swimming like a fish. She hardly uses her arms but her legs are unbelievably strong.
  • My baby LOVES to be in the water and often melts down when her class is over.

Honestly, swimming is the one of the best investments my family has ever made. It’s so necessary for children to learn how to swim so they are protected with safety skills whenever they are near any body of water. ⁣

This same rationale is what I apply to setting up a will, trust, and other legal documents to protect children. You can by setting up a plan to protect your loved ones in the event of death and an unexpected emergency. ⁣We all know how life can present us with “just in case” moments. Be prepared. ⁣I can show you how. Book a consultation today.


[i] Source: Drowning Data