People are often reluctant to talk or think about the inevitable, and estate
planning involves that very thing. The experience in our office is that,
most of our clients, are glad once they put a plan in place for their
estate should something happen to them.
Having an estate plan, ensures that you have provided for your children
and others who are close to you in the event they have to go on without
you. I believe that this is an important decision that needs to be made
while going through a
divorce and often overlooked. We have had clients who chose to ignore this while
going through a
divorce and as fate would have it they passed away and their ex got everything.
Here is a list of the instruments that make up the typical estate plan:
- Life Insurance
- Last Will and Testament
- Inter vivos Trust (also known as a Living Trust)
- Durable Power of Attorney
- Medical Power of Attorney
- Living Will or Medical Directive
- Funeral or Memorial Instructions
- List of Accounts and Documents
You may prepare to modify your estate plan during the
divorce. Many Texas counties, have Standing Orders that apply immediately upon
the filing of a suit for divorce or a suit affecting the parent child
Most standing orders prevent the parties from transferring assets, selling
or encumbering property, whether separate property or community property,
changing the beneficiary designation on any life insurance policy or affecting
the cash value of a life insurance policy.
However, since many of these standing orders were put in place Texas Estates
Code Ann. § 253.001 was passed making it so that Texas Courts may
not make orders prohibiting a person from executing a new will or a codicil
to an existing will.
A Few Thoughts While Your Divorce Is Pending
When you are married, avoiding estate planning might not be as big of a
deal because most things automatically go to your spouse under Texas laws
of intestate succession. Many times, estate planning concerns often limited
to what happens if both parents are deceased in some tragic event, such
as an automobile accident in which neither spouse survives.
In Texas if you inherit property or money before your
divorce is finalized, then such an inheritance is your separate property and is
not subject to division in the divorce.
However, how is your property distributed if you do not have a Will in
Texas and you do not survive your divorce being finalized? However, without
a will all your assets community or separate may go directly to your “surviving
spouse” under Texas’s laws of intestate succession. Another
thing you should think about is that your surviving spouse would be first
in line to seek probate appointment as the Personal Representative of
your intestate estate. This would also be true for you should your spouse
die without a Will before the
divorce is final.
Testate and Intestate Succession
When a person dies with a Will, then he or she is said to have died “testate.”
The enforceable terms of the Will control the appointment of an Executor,
the administration of the decedent’s testate estate, and the distribution
to the devisees named in the Will.
By contrast, when a person dies without a Will, he or she is said to have
died “intestate.” Texas’s laws of intestate succession
apply to the administration of the decedent’s intestate estate and
control the distribution of assets to the heirs at law. In other words,
Texas’s intestate laws determine exactly who the heirs at law are
or will be.
What Happens to Your Estate Plan after a Divorce?
Chapter 123 of the Estates Code addresses the dissolution of marriage with
regard to wills and certain nontestamentary transfers. Specifically, section
123.001 of the Estates Code provides that:
“If, after the testator makes a will, the testator's marriage
is dissolved by
divorce, annulment, or a declaration that the marriage is void, all provisions
in the will, including all fiduciary appointments, shall be read as if
the former spouse and each relative of the former spouse who is not a
relative of the testator failed to survive the testator, unless the will
expressly provides otherwise.”
While not a provision of the Estates Code, the Texas Health and Safety
Code section 166.155 (a)(3) makes similar provisions for the revocation
of Medical Powers of Attorney, which are revoked by “the divorce
of the principal and spouse, if the spouse is the principal's agent,
unless the medical power of attorney provides otherwise.
Section 9.302 of the Family Code makes nearly identical provisions with
regards to retirement benefits and other financial plans, and states, in part:
(a) If a decree of
divorce or annulment is rendered after a spouse, acting in the capacity of a participant,
annuitant, or account holder, has designated the other spouse as a beneficiary
under an individual retirement account, employee stock option plan, stock
option, or other form of savings, bonus, profit-sharing, or other employer
plan or financial plan of an employee or a participant in force at the
time of rendition, the designating provision in the plan in favor of the
other former spouse is not effective unless:
- the decree designates the other former spouse as the beneficiary;
- the designating former spouse redesignates the other former spouse as the
beneficiary after rendition of the decree; or
- the other former spouse is designated to receive the proceeds or benefits
in trust for, on behalf of, or for the benefit of a child or dependent
of either former spouse.
Life insurance is an important component of one’s essential estate
plan, especially when there are children who will need support.
You may be ordered or agree to continue or acquire a life insurance policy
after a divorce when:
- When spousal maintenance or
- child support is part of your divorce decree.
You can read more about this topic in my blog article “Texas Divorce and Child Support - Life Insurance Obligations.”
You can also read about the importance of making sure life insurance is
redesignated after a divorce or specifically designated in a divorce decree
in my blog article “$300 Divorce Cost a Man $100,000 in Texas.”
Term Life Insurance
Term life insurance policies provide coverage of the life of the primary
insured for a specific length of time. In a
divorce on the inventory and appraisement There is no equity or cash value so
they would be listed as having a value of 0 on the inventory.
Generally, you purchase term life insurance protection for 10 year terms
up to 30 year terms. Many policies are guaranteed renewable to age 90
and some companies offering policies to age 95.
Whole Life Insurance
A whole life insurance policy is a long-term approach to insuring a life.
A whole life policy will provide coverage over the course of the insured’s
lifetime at a set premium.
A whole life policy may include an investment aspect whereby a policy’s
cash value grows at a guaranteed rate. The policyholder can borrow against
the policy’s cash value. In a divorce on the inventory appraisement
you may have to include a value for the policy.
You Can Not Take It with You
A traditional Last Will and Testament is a written reflection of the testator’s
testamentary intent. It provides for the for yow you would like your things
distributed at your death. of
A Will can set age restrictions, set up testamentary trusts, name an executor
and successor to your executor, nominate guardians, and more
Creating Your Last Will and Testament.
When a lawyer says we are going to “probate the Will,” this
means that the Last Will and Testament will be submitted to a probate
court and administered.
- carrying out the last wishes of the testator
- paying off creditors and taxes, and
- distributing the property to those named in the Will as devisees, or beneficiaries.
- The executor, is appointed in the Will and, if he or she accepts the appointment,
carries out the testator’s wishes.
The executor’s duties include:
- inventory and appraisement,
- notification to creditors and heirs,
- estate administration,
- paying estate obligations, and so on, until the probate process is complete
and the estate is closed.
Often, the executor is a family member. There is no requirement that the
executor have any particular education, knowledge, certification, or background.
Even in the best of circumstances, the executor is under a lot of pressure
because of family relationships. Often times if this is the first time
the executor has been involved in any probate proceedings, it can be very
foreign and challenging.
Holographic Will, if done properly are valid in Texas. However, you should
be think twice before you rely on a holographic Will for your estate plan.
They are easy to mess up and even If the Will is found to be valid, extrinsic
evidence may be needed to determine the terms of such an informal Will.
For a Holographic Will to be found valid in Texas:
- A will written wholly in the testator’s handwriting
- is not required to be attested by subscribing witnesses.
- In all other respects, holographic wills must satisfy the requirements
for valid wills generally.
- The law regarding the requirement of the testator’s signature on
an attested will applies equally to holographic wills, including the rule
that the signature need not necessarily appear at the end of the will
- Unlike certain other American jurisdictions, there is no requirement that
a holographic will under Texas law be dated.
- The holographic will must also satisfy the other general requirements of
a will (i.e., that it be written with testamentary intent, and that the
testator have testamentary capacity).
A holographic will may be made self-proved at any time during the testator’s
lifetime by “an affidavit” by the testator that:
- the instrument is his last will,
- (2) he has not revoked the will,
- (3) he was of sound mind, and
- at the time of execution he satisfied the status and age requirement of
Estates Code section 251.001.
Most wills in Texas are “self-proved.” A will that is “self-proved”
is easier to admit to probate following the testator’s death. If
a will is not “self-proved” and only has the signature of
the testator and two witnesses, then when it comes time to probate the
will one of the two witnesses will need to attend the probate hearing
and provide testimony that the will was executed with all of the necessary
There are two methods of making a wills “self-proved” in Texas:
- Affidavit or
- New Streamlined Method
Under the affidavit method:
- after the testator and witnesses sign the will itself,
- they can then sign an affidavit before a notary swearing to the fact that
they all executed the will with the necessary formalities.
- If this affidavit is attached to the will when it is offered for probate,
no “prove-up witness” is required in the absence of a will contest.
The major problem with this method is that because there were two different
places for the testator and witnesses to sign, it is possible for one
or more of them to sign in one place, but forget to sign in the other.
New Streamlined Method
Now, Section 251.1045 of the Texas Estates Code contains a combination
“attestation and self-proving” clause, so that the testator
and witnesses need only sign a Texas will in one location. To be effective,
the language in the will must be in “substantial compliance”
with the specific language set out in this statute. We recommend copying
this clause exactly to avoid any potential complications.
Also, this single signature option is only effective for wills executed
on or after January 1, 2014; please check your current will to make sure
that it fully complies with the previous statutes concerning “self-proving”
language and signatures.
Each individual desiring a Will should have their own. During the course
of ar marriage it is not uncommon for a married couple to make reciprocal
Wills. These wills typically are:
- Drafted around the same time and
- Have dispositive provisions were mirror images of each other.
If your Will was written, signed, and witnessed after your marriage, then
your spouse was probably the person named as your first choice to act
as the executor of your testate estate following your death.
Your spouse was probably also named as the primary devisee, or beneficiary.
Given that you are in the process of a
divorce, you may wish to change your Will in that regard.
If you decide to amend your existing Will, then you can do so by either:
- Adding a codicil (Will amendment) or
- Creating a completely new Will, however, which revokes all of your prior
Wills and codicils.
Trusts and Young Beneficiaries
Parents sometimes struggle with the decision over what age a beneficiary
should be before receiving control over inherited property. Unless your
estate plan provides for a different result, an 18-year-old beneficiary
will be given their inheritance because he or she is an adult and an adult
under Texas law can handle their own money as they wish.
This may not bother you if the amount of money is $10,000, an amount that
might buy a decent used car. However, depending on your 18-year-old you
might not think they are quite ready to handle a larger sum maybe $100,000 or more.
Many parents realize their young adult child is inexperienced with money.
One of the things that parent does when this is the case is set up an
estate plan that ensures the young adult beneficiary does not get all
the money at once.
One way to do this is to place the assets or funds in trust on behalf of
the young beneficiary. The trust instrument has specific instructions
covering when and how the trust funds will be distributed.
One such restriction can require that the young beneficiary wait, and hopefully
mature, before getting control of all the money placed in trust. The trust
can state that the trustee will exercise control of the trust funds on
behalf of the beneficiary until he or she reaches the age such as 25..
Preparing an estate plan while your divorce is pending may seem overwhelming.
You may be tempted to put if off until everything has quieted down after the
divorce, until the kids are back to school, and so on.
It is better to be proactive in planning for the future and making sure
your children are protected now. Take the time to give us a call so you
can get the legal advice you need.
If you want to know more about what you can do,
CLICK the button below to get your
“16 Steps to Help You Plan & Prepare for Your Texas Divorce”
Other Articles you may be interested in:
- Texas Divorce and Child Support - Life Insurance Obligations
- $300 Divorce Cost a Man $100,000 in Texas
- Why having a will is important...
- 6 Tips - On How to prepare for a Texas Divorce
- Roadmap of Basic Divorce Procedure in Texas
- Child Custody Basics in Texas
- 6 Mistakes that can Destroy Your Texas Divorce Case
- Does it Matter who Files First in a Texas Divorce?
Law Office of Bryan Fagan | Houston, Texas Divorce Lawyers
The Law Office of Bryan Fagan routinely handles matters that affect children
and families. If you have questions regarding
divorce, it's important to speak with one of our
Houston, TX Divorce Lawyers right away to protect your rights.
divorce lawyers in Houston TX are skilled at listening to your goals during this trying process and
developing a strategy to meet those goals.
Contact Law Office of Bryan Fagan by calling (281) 810-9760 or submit your contact information in our online
form. The Law Office of Bryan Fagan handles
Divorce cases in Houston, Texas, Cypress, Klein,
The Woodlands, the FM 1960 area, or surrounding areas, including
Fort Bend County and