Friday, April 10, 2015

Do You Need a Will to Transfer Your Bank Account?

Probably not, but it certainly wouldn’t hurt to have one anyway.

Also, the funds in your account may not transfer to the people you think should receive that money. You should check your account agreement and ask your bank to answer any questions about where your funds will go once you have passed away.

When you die, your will can only distribute the assets that you, yourself, own. Your account agreement contains provisions that govern the extent to which any funds held in a particular bank account actually belong to you – as opposed to any other people who are also “account holders” or “authorized users,” or whatever language your financial institution may employ these days.

There are an elaborate number of different types of bank accounts - joint accounts, multi-party accounts, pay on death accounts, accounts held for the benefit of one person by another person (sometimes called a “trust account”), convenience accounts, accounts with rights of survivorship – the list can be confusing and I have found that most people don’t really know what type of bank accounts they actually have. In fact, most have never read their account agreement and didn’t keep a copy for their records.

Most likely, your account agreement also contains a “beneficiary” designation. You probably filled this out (or left it blank) on the day that you opened your bank account without even thinking about it. That named “beneficiary” is contractually entitled to receive the remaining funds in your account, directly from your financial institution, even if your will says something different. 

Basically, your last will and testament only transfers property that has not been dealt with through a separate agreement signed during your lifetime. Property such as life insurance proceeds, bank accounts, investment accounts, and similar funds almost always have a “beneficiary designation” that dictates who will receive those funds after your death, whether or not your will has been admitted to probate.

Always, always, always read the fine print when dealing with a financial institution, keep a copy of your account agreements, and double-check your beneficiary designations.

By: Cynthia W. Veidt,

Friday, March 20, 2015

Do You Know Who Gets Your Property If You Die Without a Will?

Well, you may think that you do. And most of you are probably wrong. At least under Texas law.

Recently, I overheard a well-educated financial expert tell his clients that they didn’t need to have a will, because Texas is a community property state and the surviving spouse will inherit everything, anyway.

After figuratively beating my head against a wall for the next five minute, I decided to revisit this misunderstood topic on our Blog instead.

Everyone needs a will – here are a few reasons why:

First, don’t assume you’ll have a surviving spouse. Married couples could both die during an accident, or within 30 days of each other, or after a divorce - any number of unfortunate circumstances may result in the law failing to recognize a “surviving spouse.”

Second, your surviving spouse does not automatically inherit everything you own. Other family members, particularly children (whether they are also children of your surviving spouse or not), will also inherit certain types of property under Texas law. Add in children from a prior relationship, and your surviving spouse may receive an unpleasant surprise.

Third, not everything you own is legally characterized as “community property” just because you happen to be married. And separate property is treated differently under Texas laws than community property.

Fourth, Texas’ statutes governing the distribution of your property if you die without a will (called being “intestate”) are very confusing. The Travis County Probate Court has a color-coded pie chart that helps demonstrate this complexity quite nicely:  

Fifth, your bank accounts and other investments may not pass by beneficiary designation or a right-of-survivorship clause, which means a probate court will need to enter a judgment determining the identity and inheritance rights of your legal heirs. That process will hold up access to your funds at a time when they are most necessary for your surviving family members. 

Why risk an unwanted result, when you can simply prepare a will that clearly tells everyone how to handle your property after you pass away? 

By: Cynthia W. Veidt,

Wednesday, July 30, 2014

Adding a Self-Proving Affidavit to Your Will

In Texas, a self-proving affidavit is not required to make your Will valid, but it does make your Will easier to probate.  When properly executed, the self-proving affidavit dispenses with the need for any live witnesses to testify in court at the hearing on an application to probate your Will.
Effective January 1, 2014, Texas will no longer require a separate “self-proving affidavit” on a person’s Will.  Until then – because of some confusion concerning the effective date of the various changes made to Section 59 of the Texas Probate Code by the Texas Legislature – we believe that it is best to include a separate self-proving affidavit after the signature block where you and the two witnesses have attested to your Will.  

As of the date of this blog entry, Texas Probate Code Section 59 contains the following statutory language for a self-proving affidavit to a person’s Will:

COUNTY OF ________________
Before me, the undersigned authority, on this day personally appeared _______________, _______________, and _______________, known to me to be the testator and the witnesses, respectively, whose names are subscribed to the annexed or foregoing instrument in their respective capacities, and, all of said persons being by me duly sworn, the said _______________, testator, declared to me and to the said witnesses in my presence that said instrument is his last will and testament, and that he had willingly made and executed it as his free act and deed; and the said witnesses, each on his oath stated to me, in the presence and hearing of the said testator, that the said testator had declared to them that said instrument is his last will and testament, and that he executed same as such and wanted each of them to sign it as a witness; and upon their oaths each witness stated further that they did sign the same as witnesses in the presence of the said testator and at his request; that he was at that time eighteen years of age or over (or being under such age, was or had been lawfully married, or was then a member of the armed forces of the United States or of an auxiliary thereof or of the Maritime Service) and was of sound mind; and that each of said witnesses was then at least fourteen years of age.

Subscribed and sworn to before me by the said ____________, testator, and by the said ________________ and _______________, witnesses, on this ______ day of ________________, 20____ A.D.
(Signed)           ___________________________
(Official Capacity of Officer)

It is strongly recommended that you consult with an attorney prior to signing any legal document, including your Last Will and Testament; this will help ensure that the document meets current statutory requirements and that you understand the significance and consequences of each provision and term contained in the document.
By:      Cynthia W. Veidt 

Monday, April 28, 2014

The New Texas Estates Code is Here

Effective January 1, 2014, Texas has fully adopted the Texas Estates Code.  This “new” set of statutes is a recodification of the former Texas Probate Code, Texas Trust Act, and a number of related statutes contained in the Texas Health & Safety Code and other statutes.

Although most of the provisions remain unchanged – save for a new citation – you should make sure to check your estate planning forms to ensure that they remain effective and comply with any new requirements.  In particular, the new Estates Code has made some changes to the Statutory Durable Power of Attorney form (the power of attorney for financial affairs).

We also recommend updating your estate planning documents – including powers of attorney forms – whenever you have experienced a significant “life event,” such as the birth or adoption of a child, marriage, divorce, or the death of a relative or significant other.

By: Cynthia W. Veidt,

Thursday, March 6, 2014

How Should I Sign My (Texas) Will?

You must sign and date your Will.  

The Will should also be signed by at least two disinterested witnesses who are at least 14 years old.  A disinterested witness is someone who is not named as an executor, trustee, or beneficiary in your Will.  You should also try to avoid using any family members who might inherit from you under the laws of intestacy as a witness to your Will. 

Under best practices, you should sign the Will in the witnesses’ presence, and tell each disinterested person that the document they are signing is your last Will and you want them to witness your Will.  

Each witness must sign the Will in your presence.  Although it is not necessary for the witnesses to sign the Will in each other’s presence, it is better to have both witnesses sign the Will at the same time and in each other’s presence, too.  

The witnesses should print their names underneath their signatures and provide an address at which they may be contacted in the event that their testimony is needed at a later date. 

In addition to simply signing your Will, you should consider adding a “self-proving affidavit” to your Will.  (See separate blog entry re: self-proving affidavits). 

It is strongly recommended that you consult with an attorney prior to signing any legal document, including your Last Will and Testament; this will help ensure that the document meets current statutory requirements and that you understand the significance and consequences of each provision and term contained in the document. 

By:      Cynthia W. Veidt