How Can I Change My Texas Will Without Creating a Brand New One?

Sometimes, you want to change one little thing in your Texas will without the need to create and sign an entirely new one. For example, one of the persons you identified as your executor has died, and you want to name someone else in his/her place. Or perhaps you’ve had an addition to the family and want to leave a specific item or gift to your new grandchild.

In these situations, a codicil to your Texas will can be created to make the minor change or to add a new provision. The codicil should specifically reference your existing Texas will, preferably by date of execution, and specifically identify the paragraph(s) you are changing or create a new number/section for the information you are adding.  A codicil in Texas should be executed using the same formalities as an original will and can be made self-proving in the same manner as an original will. Make sure that your codicil is placed in the same location as your will, and that your executor is aware of its existence.

However, if you want to make several changes to your will, or something has occurred in your life that substantially alters your previous estate plan (such as a marriage/divorce or birth/adoption of a child), you should execute a new will, under the usual formalities, and specifically revoke the old one. Multiple codicils to a will, or substantial changes to a will via codicil, can become very confusing to your executor or increase the risk that the terms will be inconsistent with each other.

Article by Cynthia W. Veidt, Austin Attorney

Helpful Resource Guide on Texas Law!!

The Texas Young Lawyer’s Association (TYLA) is often a wealth of information for persons trying to obtain basic information and guidance about Texas law. Now, TYLA provides another helpful resource guide for Texas who are interested in estate planning and the probate process.  The Texas Probate Passport can be found at http://www.tyla.org/tyla/index.cfm/projects/probate-passport/.

Article by Cynthia W. Veidt, Austin Attorney

When Does an Account Have a “Right of Survivorship”?

Texas law has not favored the creation of joint ownership with right of survivorship (“ROS”) for a variety of historical reasons. Executors of a deceased’s estate are often left to wonder – is this joint account non-testamentary (in other words, not an asset of the probate estate subject to the executor’s control) because it meets the requirements for a right of survivorship under Texas law?  Financial institutions can be reluctant to pay on these joint accounts prior to some form of probate, which prevents the co-owner(s) from having access to funds needed to pay their bills.

So much for careful estate planning to minimize probate assets!

Chapter XI of the Texas Probate Code deals with non-testamentary transfers, with particular attention to multi-party accounts and survivorship rights. One of the first things you should try to obtain is a copy of the account agreement. Look to see if it uses language such as “on the death of one party, all sums belong to the surviving party as his or her separate property and estate.”  Tex. Prob. Code § 439. Reliance on the name of the account, alone, is usually insufficient to create survivorship rights.

In addition, you may want to check the account agreement against the proposed “Uniform Single-Party or Multiple-Party Account Form” described in section 439A of the Texas Probate Code. Banks and other financial institutions which utilize this form, or something substantially similar to it, are protected from most claims that could be brought by a deceased’s estate, personal representative, beneficiaries or heirs if they rely on the “survivorship” provisions to pay remaining sums to the joint owner(s).

Article by Cynthia W. Veidt, Attorney

Protecting the Artist/Filmmaker/Musician’s Rights

You’ve worked a long time to create something special – whether it’s a song, a poem, a novel, a screenplay, a film, a photograph, a painting, a couture design for your future show at Bryant Park, or some other artistic work. A whole bundle of legal rights protects your time and investment, ranging from copyright and patents to distribution and recording rights. Don’t forget that you need to protect those rights during your lifetime in the event of future incapacity or after death. First, be aware of which rights you have retained, and which you may have bargained away. For example, ownership or control over the “master” of a particular recording session is often legally separate from the right to use and publicize one’s name, image and likeness. In an age where online videos, t-shirts, hats and other cross-promotions can generate more revenue that royalties from a single song, you need to be aware of these important property rights. And your heirs may be able to register their rights (via Chapter 26 of the Texas Property Code) to control and license your image and life story for up to 50 years. Second, you need to carefully review the language of any contracts – and always get these agreements in writing – so that you can properly negotiate over the entire bundle of intellectual property rights. Consider this: if George Lucas had overlooked the value of “image” merchandising when he negotiated his contract for the original Star Wars movie, he probably would not be the wealthy man that he is today. Finally, when you prepare a will (and yes, you most definitely should have a will) and other health-care planning documents, make sure that you hire an attorney and provide them with a copy of all contracts. Most of the rights in artistic works are considered “intangible property,” and you do not want them to fall into the wrong category for division among your heirs. Careful drafting will help ensure that your loved ones receive the bounty of your hard work once you are gone. Article by Cynthia W. Veidt, Attorney

Trustee Guilty of Unauthorized Practice of Law in Texas?

Trustees who are not attorneys beware! You may be guilty of the unauthorized practice of law in the State of Texas.

Texas Trustees are often given the power to sue or be sued on behalf of the trust; it is a necessary power, since a trust must be able to enforce its rights or defend itself from legal action. But the Amarillo Court of Appeals recently found that a non-attorney trustee had no right to proceed in a pro se capacity (i.e., without an attorney) in legal proceedings. See In Re Guetersloh, 326 S.W.3d 737 (Tex. App.—Amarillo 2010, no pet.).

The court’s reasoning: the trustee was not enforcing his or her individual rights, but was instead acting on behalf of others (the trust’s beneficiaries). Since the trustee was not an attorney, he was necessarily engaging in the unauthorized practice of law.

Similar rules bar a corporation’s representative from suing or defending in the name of the corporation without legal counsel.

Article by Cynthia W. Veidt, Austin Attorney

Dallas Court of Appeals Goes Against Arbitration Trend

Over the past few years, Texas courts have been busily encouraging parties to avoid litigation in favor of binding arbitration. Enforcement of arbitration clauses against parties who did not enter into a written agreement is sometimes possible. In some contexts, arbitration has also been required of third parties who were the “intended beneficiaries” of another party’s contract.

But in Rachal v. Reitz, 347 S.W.3d 305 (Tex. App.—Dallas 2011, pet. filed), the Dallas appellate court found that a clause in the settlor’s trust instrument requiring arbitration of disputes between the trustee and the beneficiaries was not enforceable. The panel of judges took the position that the trust’s beneficiaries were not parties to the trust instrument; as a result, they had not agreed to waive their right to litigation and could not be required to arbitrate their claims.

The case has been submitted for review by the Texas Supreme Court. Stay tuned for future updates.

Article by Cynthia W. Veidt, Attorney

Closing an Estate under Independent Administration

Although it is not strictly required that an independent executor take action to close the estate, some executors may prefer that the record reflect that at least from the executor’s perspective, he or she has completed their administration and will not be taking further action.

The Probate Code offers a few options for those wishing to close the estate. Arguably the simplest and most cost effective way to accomplish this is to file a “Notice of Closing Estate” with the court as authorized by Section 151(b) of the Probate Code.

The Notice of Estate Closing is essentially an affidavit executed by the independent executor and filed with the court that asserts that independent executor has discharged his or her duties.

The Notice of Estate Closing must state (1) that all debts known to exist against the estate have been paid or have been paid to the extent the assets of the estate allowed and (2) must list each distributee to whom assets of the estate had been distributed, including the address of each distributee.

The Notice of Estate Closing must also assert that each distributee has been provided a copy of the Notice prior to filing, and must include any proofs necessary to establish such delivery. Therefore, the Notice should be executed and mailed to each distributee by a method that allows tracking (certified mail return receipt, fax, etc.), and the executor should be prepared to attach such tracking as an attachment to the Notice of Estate Closing.

Given the requirement that the Notice be fully executed and delivered to the distributees prior to filing, the Notice must anticipate that proofs of delivery will be attached when filed with the Court, and language to that effect must therefore be anticipated and included in the Notice prior to delivery to the distrbutees.

If the Independent Executor is delivering a copy of the Notice to a distributee represented by counsel, where that attorney has not actually made an appearance before the Court, it is also advisable to attach documentation with the Notice that demonstrates why the Independent Executor believes that such distributee is represented by counsel such that the delivery of the Notice by and through that counsel would be effective (for example, correspondence from that counsel asserting representation of the distrbutee).

Once the Notice has been delivered to the distributees and the proofs of such delivery have been gathered and attached, the Notice of Estate Closing may then be filed with the Court. Upon filing of the Notice of Closing of Estate with the Court, the estate will be considered “closed” after 30 days.

It is important to note that the closing of an estate by way of a Notice of Closing Estate does not relieve the Independent Executor of any potential liability in discharging his or her duties while administering the estate. However, the Notice of Estate Closing can nevertheless be a valuable tool for ensuring the record reflects the Independent Executor’s belief that no further administration is necessary. This record notice can prompt distributees to bring forward any potential claims so that they can be dealt with in a timely fashion while evidence is still fresh and while damages that might stem from any potential liability may be limited. Additionally, filing the Notice may also set up a potential equitable defense based on laches in the event a distributee asserts a claim against the Independent Executor years later after having received notice that the estate was closing. The Notice may also be helpful in establishing the maximum timeframe for when the clock should be running for purposes of calculating the statute of limitations that may run on potential liability claims arising out of the administration of the estate by the Independent Executor.