We do a lot of estate planning and probate here at the Jacobson Law Firm, and we generally advise people that if they can name a beneficiary for a bank or investment account, insurance policy or annuity they own, they should do so, because then that account doesn't have to go through their estate after they die. However, we also tell them it's a good idea to review their accounts and policies every few years. I got a call from a man recently who told me his ex-wife had named him as the beneficiary on her six-figure annuity while they were married. After the divorce, "We stayed friends and she told me she still wanted me to have the annuity when she passed." However, when she died and he called the company handling the annuity, he was told that although he was still listed, they wouldn't be able to pay him. "Can they do that?"
In Texas (and in many states), when two parties get divorced, it is as though they had predeceased each other for purposes of inheritance and beneficiary status. In other words, "You're dead to me!" is actually true. In the scenario above, if the ex-wife had gone back and re-designated him as the beneficiary after the divorce was final, he'd have been able to get the six-figure payday; but because she didn't, the law prohibits him from being the beneficiary. The same goes for serving as agents, such as in a financial or medical power of attorney or as executor under a will: if redesignated after the divorce, the ex can be your executor or agent, but not if you don't specifically name him/her AFTER the date of the divorce.
All this leads back to this suggestion: divorced or not, it's always a good idea to go back and review your estate planning periodically, to make sure what you THINK you did is actually what you did. If you're concerned about whether your estate planning documents still meet your changing needs (or if you don't have any yet), consult an experienced estate planning attorney.
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer.
The title of this blog entry isn't original to me, and I don't recall where I read it, but it was during this 2020 of not knowing what tomorrow will bring. The person wrote that we're all "operating in the 'what-ifs'", meaning it's anybody's guess what will happen next and yours may be as good as mine. "Change the facts, change the answer" - my Torts professor at St Mary's University Law School used to say this every time some young, idealistic skull full of mush (hat tip to Rush and John Guilgud) wasn't happy with the result of a case and tried to argue a different result by saying, "What if the person [fill in the righteously indignant blank]?" He generally followed with some version of, "If those facts had existed, we wouldn't be talking about this case".
One thing about the "what-ifs" - the more thought you put into developing a plan, the more likely that plan is to have contingencies built into it. Notwithstanding Von Clausewitz' "No plan survives first contact with the enemy" (Squadron Officer School, 1988), there are things you can do, both personally and in your business planning, to be prepared for emergencies and avoid having to (my least favorite overused word of 2020, barely beating out "systemic racism"), pivot your personal life or business blindly. And even in the midst of viruses and riots and politics and lies (but I repeat myself), sitting down with your cadre of professionals (paid or unpaid, we all have 'em) and talking through your circumstances can help you gain perspective and focus, and let you put together a strategy that takes most things into account.
From the legal side, talking with an experienced estate planning and/or business attorney to get your plan established is a worthwhile investment of time and/or money. Likewise, your CPA and financial advisor are probably right on top of all that's going on in this season, so reach out to those people. There's no need to handle this stuff on your own.
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. By the way, stay tuned for our new look on the Jacobson Law Firm, PC's new website! We hope it will be up and running within the next 30 days.
I wear a lot of hats. I don't mean I have lots of responsibilities, I mean I wear. a. lot. of. hats. Three fedoras, two driving caps, two Panamas, two cowboy hats, a couple of baseball caps, one Air Force ORF cap - that's what happens when you spend too many years in the tropics and South Texas without enough (or any) sunscreen. I've had enough stuff cut, frozen and burned off my face and scalp to last a lifetime.
However, I - and probably you as well - wear a lot of hats in the colloquial sense as well. So do a lot of our clients. For example,
In a business formation, a client can be -
- a partner, member, shareholder, AND
- an officer, director, employee, manager
In estate planning and/or probate, a client can be all of the following:
- a beneficiary,
- an executor,
- a trustee,
- an agent under power of attorney (financial or medical)
Keeping in mind which hat you have on can be critical if, for example, you own a business and you're buying stuff for your personal use but using a company credit card to do so - if it's a forgot-my-personal-card-and-need-this-now situation, make sure you turn in the receipt and reimburse the company for what you spent. And make sure it's not a regular occurrence - you're vulnerable to a claim that you're using the company as your personal piggy-bank and somebody suing your company could "pierce the corporate veil" and come after your personal assets.
Here's another one we see pretty regularly: "My dad died last week, but I have his power of attorney so I'm going to sell his car". Nope. Your agent-under-power-of-attorney hat goes up in smoke when the person who gave it to you (the "principal") dies. If you're also the executor under the will, you can use that hat AFTER the probate court issues letters testamentary to you, but not before. If you also have a beneficiary hat on your hat rack, you could be liable under a legal concept called "self-dealing" if you distribute money to yourself with your executor hat on, but don't distribute to other beneficiaries.
A related hat issue is when you use your mom's financial POA to transfer property from her to yourself. No can do, Podnah - that's also a breach of fiduciary duty.
So, hats are cool (or warm, depending), but each carries both rights and responsibilities. Make sure you're wearing the right hat for the activity in which you are engaging!
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. If you have questions about your various hats, talk with an attorney experienced in your area of hat-wearing!
Suffering produces perseverance; perseverance, character; and character, hope. And hope does not disappoint...
There's a quote I have reflected on over the last few months: "Adversity doesn't build character, it reveals it." It's equal parts cynical and fatalistic, I suppose, and we have certainly seen a lot of people disappoint us with their actions, words and vitriol in response to the pressure of the last few months. In the last month alone, my wife and I have been on the receiving end of two screaming rages, in public, by people we don't even know. I know others have seen how these times affect people for the worse as well.
Paul writes in Romans 5 that "we rejoice in our sufferings, because we know that suffering produces perseverance; perseverance, character; and character, hope. And hope does not disappoint us, because God has poured out his love into our hearts by the Holy Spirit, whom he has given us."
I much prefer Paul's perspective in these times, though the two are not mutually exclusive. What's the difference? Perseverance. Paul is writing to believers, people who have received the Holy Spirit, encouraging and exhorting them to rejoice not BECAUSE of their sufferings, but IN THE MIDST OF THEM. How to do that? To persevere, or (in the 60s expression), "Keep on keepin' on." Knowing that there's nothing new under the sun, that all this has happened before and will happen again, and that the two greatest commandments apply no matter our circumstances: Love the Lord your God with all your heart, soul, mind and strength, and love your neighbor as yourself. And cultivate a heart of hope. Bless y'all, stay safe, be strong and of good courage.
Imagine this scenario: you notice some sort of medical issue with yourself. You go online and find something that looks like your symptoms, so you pick a diagnosis, write out a prescription for what that website says will cure the condition, then take the prescription by your doctor's office and say, "Hi, I diagnosed myself and wrote my own prescription, so all I need is the doctor's signature and I'll be on my way. K? Thanks!" What do you think your doctor would say to that?
Now, change that to, "Hi, I'm forming a company with some buddies and we all know what we want, so I wrote up this contract. Just take a quick look at it and tell me it's okay. It shouldn't take long. K? Thanks!" Substitute "I wrote up wills for me and my wife"/ "I'm buying a house" / "I wanna sue this guy but don't wanna split the million bucks it's worth with a lawyer", and you have a scenario attorneys see every day.
Here's the thing: the doc's not gonna write you a prescription until he's done his OWN examination on you and established a differential diagnosis, then reviewed the available treatments and chosen the one that fits you. In the same way, a lawyer who is willing to "just give it a quick look", without sitting down with you (it could be a virtual sit-down because COVID), asking questions about the background of the matter, and coming up with his or her OWN analysis of what you need (and, more important, what you HAVEN'T considered that could come back and bite you in the butt), is putting your welfare and the lawyer's license at risk.
The adage, "You get what you pay for", is nowhere more true than in the process of protecting yourself from adverse legal consequences. I understand that legal fees are not something anybody really wants to pay, but consider the above scenarios before you judge us too harshly. And, by the way, this is how we feed our families, pay our staff so they can feed their families, and generally stay able to conduct our business, just like any other business.
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. If you have a legal issue of any kind, do yourself a favor and invest in consulting an experienced lawyer who practices in that area of the law.
The title of this blog is our long-time estate planning mantra here at the Jacobson Law Firm, P.C.. That statement has become especially poignant in the last 2 months, what with COVID-19 and all, but the stats on COVID as compared to the flu just reinforce that things like wills, trusts, medical and financial powers of attorney, etc. aren't just for "rich folks", they're for ALL folks. Below is a short primer on each kind of advance directive:
The Will – The last will and testament is an express, written statement of who gets your stuff when you die. Although there are a few ways you can do this without a notary and two witnesses, the safe way is to have an attorney draft it for you to ensure it complies with the requirements of the Texas Estates Code. There are a few required parts of a will, but basically it lets you identify your family, dispose of your stuff (either by giving specific things to specific people or by “general bequest”, meaning “all of my property to my wife/children/church/whoever”) and appoint an executor to handle your debts and the disposition of your property according to your stated directions. Click here for a video explanation of Texas Wills.
The Statutory Durable Power of Attorney – also called a financial power of attorney, this document lets you designate somebody to, in essence, be you to third parties. With this document, the person you designate can either have the power to do some things but not others (making it a special power of attorney), or to do anything in your name (the general power of attorney). Either way, you can also designate whether it takes effect immediately and doesn’t terminate when you’re determined to be incompetent, or whether it doesn’t become effective until you’re incompetent. This is an exceedingly powerful document, so choosing the right person is critical. Click here for a video explanation of the Statutory Durable Power of Attorney.
The Medical Power of Attorney – as the name implies, this document lets you designate, ahead of time, a person who can consult with your health care providers and make treatment decisions for you in the event you’re incompetent, either temporarily or permanently. As long as you’re able to communicate and consult with your health care providers, the person can’t make decisions for you, but as soon as you are determined to be unable to communicate effectively with your HCPs, the person you designate can take over the decision-making on your behalf. If you regain competence, the MPOA goes back into hibernation – it’s only effective when you can’t participate in your own care. Click here for a video explanation of Medical Power of Attorney.
The Directive to Physicians – also called a living will, this is the document whereby you direct, in advance, what you want your physician to do if you have a terminal or irreversible condition and you can’t communicate with your HCPs. The normal choices are either, “Do everything you can, even if it’s futile” or “keep me comfortable and let me go. There are a couple of other limitations, such as that your death has to be expected within six month even if they try “heroic measures” to save you, and you can designate treatments they have to try before they pull the plug. This document is a great way to alleviate placing even more burden on your family at a time when they’re already in a very difficult emotional position: you’ve already said what you want your physician to do, so the family doesn’t have to make that decision. Click here for a video explanation of Directive to Physicians.
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. If you have questions on any of the above, which are the basic documents we think everybody needs, please DON'T just go online and download stuff. Contact an experienced estate planning attorney and make informed decisions.
Keep 'em washed! Mask up! Stay brave!
The photo to the left is the Jacobson Law Firm crew, all gloved and masked up, per our COVID-19 protocol when clients come in to execute their estate planning documents. I'm immensely proud of all of them. I also had my first probate hearing via Zoom this afternoon, proving up a lost will by video. It was a little awkward but it worked. Well. Judge Vasquez in Probate Court 2 has the process down pat. We've filed half a dozen documents that usually require notarized signatures but we've used the statutorily authorized unsworn declaration language instead (it's been there for years but hardly anybody ever used it in court proceedings before now).
What I'm finding is that the more of the "standard practices" that get waived for practical reasons during this time, the easier the process is. Which makes me wonder: when COVID/stay home/wear PPE, etc. is over, why not institute a new test for what's necessary? Seriously, shouldn't the test for whether we re-institute some process be that the person wanting to do so has to prove it's necessary and not just "the way we've always done it"? Because the ingenuity, practicality and creativity of the American people in finding work-arounds that actually work - a long tradition of this great nation - has once again triumphed. We should take pride in that and remind ourselves that "Because" is never a good answer to, "Why do we do it this way?".
Stay safe, wash those hands, be smart and be creative - it's the American way.
My friend, Colonel (ret) Mary V. Perry, was the defense counsel in a court martial I tried at Howard AB, Panama in the late 1980s (we were both captains at the time). In her closing argument, trying to get the jury to reject some portion of my recommended sentence because there was no evidence for my argument that it would deter others from engaging in the same conduct, she told the joke about a guy seeing another guy standing on a corner in the middle of downtown, snapping his fingers and looking around. First guy says to second guy, "Waddya doin', bud?"
Second guy: "Keeping the elephants away"
First guy: "Elephants?! There aren't any elephants within 1000 miles of here!"
Second guy: "See? It's working!"
Well, it didn't work for Mary Perry's client (as I recall, he got the Big Chicken Dinner and reduction to Airman Basic, but she managed to kick my rear a couple of other times).
Why do I bring this up thirty-something years later? Well, I'm not sure it's a great analogy, but part of me thinks all the hoopla and hullabaloo over the past couple of days about local, state and national declarations of emergency, prohibiting large meetings, etc. to combat the COVID-19 pandemic might involve some finger-snapping. If this thing fizzles out, how will we know it wouldn't have anyway? Are these things reasonable precautions or wild overreactions? And why does San Antonio allow up to 500 people - FIVE HUNDRED PEOPLE - to gather when Houston limits it to 250 people? This is the sort of inconsistency that makes me suspicious that the people in charge are, at some level, just makin' stuff up as they go. All that said, I'm happy I'm not in charge. Take it seriously, wash your hands, cough into your elbow, wipe the doorknob, don't hang around with sick people. And for goodness' sake, save some toilet paper for the next person.
We do a bunch of estate planning here at the Jacobson Law Firm, and when I tell people what I do, most think wills, powers of attorney (POAs), living wills, trusts, etc., in case (in case?) they die or are incapacitated. All that is true; however, there's one document a lot of parents and grandparents don't think about until it's too late: a POA In Loco Parentis. It does seem like you're giving somebody the power to act like a crazy parent, but although as a practical matter you might do that, it actually means "in the place of a parent".
Hypothetically, your kids ask your wife if she will come watch your grandchild, Apple-Of-Her-Eye, for a week while they go on a cruise. Said grandmother - we'll call her GiGi - agrees, and heads off to Salt Cellar, Texas to entertain the little guy. You, being - I dunno, maybe an estate planning lawyer - stay home and work. Right before the newly liberated mom and hubby head off for their adventure, you get a text message from GiGi asking what happens if AOHE gets sick and she has to take him to the doctor. It is at this point that the "cobbler's children have no shoes" meme starts playing in your head and you ask yourself, "Why the heck didn't I think about doing a POA In Loco Parentis before now?!"
The POA-ILP (don't use that in front of a lawyer, I just made it up) authorizes the named person to do any act that a parent could legally do on behalf of the parent's minor child. It can cover everything from medical care to registering for school to giving consent for field trips, etc., and it gives both the parents and the POA-ILP holder a great sense of relief and security that while the parents are unavailable, somebody's able to watch out for the minor's best interests. There's no need to say why the parents are out of pocket. It can be for as long or as short a period as necessary or convenient (well, when the minor turns 18 it terminates). Caveat: it must be signed in front of a notary and should ideally have both parents' signatures on it.
By the way, everything in our hypothetical turns out okay, but remember - not doing a POA-ILP CAN result in somebody acting "like a crazy parent". Bad thing. Don't do it.
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. If you find yourself needing to have somebody take care of your tyke or tykes, please contact an experienced estate planning lawyer and discuss your needs. But don't ask him/her if he/she has ever forgotten to do one for his/her own kids...
"Here's a stupid question..." - I hear this too often from my business clients. At the Jacobson Law Firm, we've helped form hundreds of business entities and we serve as Registered Agent for many of them. This means that I get to break the bad news when one of those businesses gets sued, but it also means I get to spend time getting to know about my clients' businesses - what's important to them and their employees, what they want out of being a business owner, how they care for their families, what sort of succession plans they've made. I love this part of the practice, because it tracks with our motto: "Helping People For Life".
One thing I never get tired of saying is that there are lots of ignorant questions when it comes to running a business and doing your estate planning, but there are no "stupid questions". A lot of this stuff is non-intuitive, meaning there's no reason the client should know the answer, so why not ask? I will also tell you that I would ALWAYS rather have a client call and say, "I'm considering doing x for my family/business - what do you think?", than have one call and say, "I just did y - that's okay, right?...".
Having a law practice is about building relationships. If your lawyer makes you feel stupid for asking a question, get another lawyer. A good lawyer wants nothing more than to have clients understand what's happening with their matter, be able to participate in decision-making, feel as though their concerns have been heard - and tell their family and friends, "I have a great lawyer - give him/her a call."
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. If you have questions about your business, contact an experienced business lawyer and ASK. And if you're a small business owner, it's doubly important that you have a lawyer who will integrate your business succession plan with your estate planning.
Musings, observations, the occasional whineage and some funny stuff.