Estate Planning

The Law Offices of Richard C. McConathy offers comprehensive estate planning services in Texas. Our experienced estate planning attorneys will counsel you on the most effective and appropriate planning for your specific estate and family circumstances.

We use sophisticated planning techniques to preserve family wealth. We also have the experience and capacity to deal with all matters related to planning for high-net-worth clients. However, we also offer our services to those who do not require complex tax planning.

Whether your estate requires state-of-the-art planning techniques or more routine planning documents, we will help you understand the planning options that are appropriate for your goals, family situation, and assets.

We recognize that developing plans for the appropriate and responsible transfer of wealth and dealing with unique family issues requires a high level of attention and sensitivity to the goals and desires of each client. We do not use a “cookie-cutter” approach to planning. Instead, we work to understand each client’s specific situation and intentions. We strive to make the planning experience one in which our clients know that all options have been considered and the final results will accurately reflect their wishes.

We believe that our relationships with our estate planning clients are based on trust, and we work diligently to earn the trust of each of our clients.

What is Involved in Estate Planning

Estate planning in Texas involves developing a plan to distribute your property and assets to your heirs after your death. One of the most important factors that your Texas estate planning attorney will consider when developing your plan is how state and federal tax laws can affect your estate and potential tax consequences. An estate plan should also include instructions in case you become incapacitated and unable to manage your own affairs.

Here are some things to consider when preparing your estate plan:

• Who will be your beneficiaries?
• Who will be your healthcare proxy?
• How will you care for and maintain your minor, disabled, or special needs children?
• How can you avoid probate and guardianship issues?
• How can you minimize tax consequences?

Here are some common documents that an experienced Texas estate planning law firm may use:

• Will: A will is used to distribute your assets, funds, and personal property to your heirs. It also allows you to designate a person to manage your estate after your death and/or manage the property for underage beneficiaries until they reach legal age.
• Durable Power of Attorney (DPOA): A DPOA allows you to designate another person (known as your agent) to act on your behalf regarding legal, business, and personal matters. You may designate specific powers for your agent or grant all powers, without limitation.
• Medical Power of Attorney (MPOA): This document designates the person to whom you grant the right to make medical decisions on your behalf.
• Living Will: This document provides specific medical and healthcare instructions in case you become incapacitated and cannot make those decisions for yourself. It may include items such as life support and Do Not Resuscitate (DNR) orders.
• HIPAA Release: The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that makes all your health and medical information private and restricts disclosure to others without your authorization. A HIPAA release authorizes the release of your medical information to your designated Medical Power of Attorney agent so they can make informed decisions affecting your health.
• Guardian for Minor Child Designation: This document designates a guardian to handle the financial affairs, living arrangements, and healthcare of your minor children in case of your death or incapacitation.
• Revocable Transfer on Death Deed: This document automatically transfers title to real property to a designated person upon your death, effectively eliminating the need to go through probate. It can be used to transfer the family home to a surviving spouse or child. To be valid, all deeds must be filed with the county clerk before death.

Will Packages

The purpose of a will package is to protect your assets, both while you are alive and after your death. A will package is the foundation of your estate plan. 

It includes the following documents:

• Last Will and Testament: This document states how you want your property to be distributed after your death, who you want to be your executor, and who will take care of your minor children.
• Statutory Durable Power of Attorney: This document allows you to name someone else to make business and financial decisions for you if you become incapacitated or disabled.
• Medical Power of Attorney: This document allows you to name someone else to make medical and healthcare decisions for you if you become incapacitated or disabled.
• Directive to Physician (Living Will): This document declares your wishes regarding life-prolonging treatments and procedures.
• Declaration of Guardian: This document allows you to name the people who will be your guardian and manage your estate if you become incapacitated or disabled. It also allows you to name the people you do not want to serve in these roles.
• Declaration of Guardian for Minor Children: This document allows you to name the people who will be your children’s guardians if you become incapacitated or disabled.
• HIPAA Authorization: This document allows you to name the people who will have access to your medical information and records.
• Disposition of Remains: This document allows you to appoint someone to make all decisions about what happens to your remains after your death.

Once you have met with an estate planning attorney and they have drafted the documents, you should review them every year to make sure they still reflect your wishes. As your life and family changes, you may want to review your plans and change them. We also recommend that you have an attorney review the documents to make sure they are still compatible with any changes in estate tax and federal law.

Trusts

A trust is an agreement in which one person (the grantor) gives property to another person (the trustee) to manage for the benefit of a third person (the beneficiary). Trusts can be created to be effective during the grantor’s lifetime or only after their death.

There are many types of trusts, but the two main categories are revocable and irrevocable.

Revocable trusts allow the grantor to change or terminate the trust at any time. This type of trust is often used to avoid probate, hold property in other states, or for privacy reasons. For estate tax purposes, the grantor is still considered the owner of the property held in a revocable trust.

Irrevocable trusts cannot be changed or terminated by the grantor once they are created. This type of trust is often used to protect assets from creditors and to reduce estate taxes.

Here are some other types of trusts:

• Bypass trust: A bypass trust is created in a person’s will to hold property that will not be subject to estate tax. This type of trust can provide for a surviving spouse and/or children, but at the death of the second spouse, the trust “bypasses” the estate process and is not subject to estate tax.
• Marital trust: A marital trust is created to hold property for a surviving spouse. The spouse is the only beneficiary during their lifetime, and at their death, the trust assets are included in their estate.
• Charitable trust: A charitable trust is created to benefit a charity. The charity can receive the trust assets immediately or over time.
• Generation-skipping trust: A generation-skipping trust allows you to pass property to two or more generations below your generation without incurring estate taxes.
• Irrevocable life insurance trust (ILIT): An ILIT is created to hold a life insurance policy. The purpose of an ILIT is to keep the insurance proceeds out of the grantor’s taxable estate at death and to set guidelines as to how the proceeds will be used.
• IRA trust: An IRA trust is created to hold the proceeds of an IRA or other similar type of retirement savings account. IRA trusts are often used to “stretch” out the proceeds of an inherited IRA in order to save income taxes and to prevent the beneficiary from having access to the entire amount immediately.
• Spendthrift trust: A spendthrift trust is created to protect the beneficiary from spending their inheritance unwisely. The trustee has the authority to make distributions to the beneficiary, but the beneficiary cannot access the trust assets on their own.

Trust Litigation

Our attorneys have extensive experience in representing individuals and trustees in trust litigation matters, including breach of fiduciary duty. There are many reasons why you may find yourself involved in trust litigation. 

For example, if you are a beneficiary of a trust and you have issues with the trustee regarding distributions, investments, or lack of information, or if you have an issue with the trust agreement or how the trust was created. In general, the Texas Trust Code requires trustees to exercise the following duties:

• Duty of loyalty: The trustee must act in the best interests of the beneficiaries.
• Duty of care: The trustee must act with reasonable care and skill in managing the trust assets.
• Duty of impartiality: The trustee must treat all beneficiaries fairly.
• Duty to furnish information: The trustee must provide beneficiaries with information about the trust, including the trust assets, investments, and distributions.
• Duty to provide certain beneficiaries an accounting when demanded: The trustee must provide beneficiaries who are 25 years of age or older with an accounting of the trust upon request.
• Duty to act in good faith: The trustee must act in good faith and in accordance with the terms of the trust agreement.
• Duty to keep beneficiaries 25 years and older reasonably informed: The trustee must keep beneficiaries who are 25 years of age or older reasonably informed about the trust.

The terms of the trust document can override the Texas Trust Code. If there is a conflict between the trust agreement and the Texas Trust Code, the trust agreement will prevail.

If you are a beneficiary and you have any questions or concerns about a trust, please contact our office to discuss your situation.

Fiduciary Litigation

Our attorneys have extensive experience in representing individuals, banks, and trust companies in breach of fiduciary duty litigation. If you are a trustee of a trust agreement, you may find yourself involved in such litigation. 

As a trustee, it is important to understand the high standard of care to which you are held by the beneficiary of the trust. You must act in the best interest of the beneficiary, and you are held to the standards set out in the trust agreement, as well as those set out in the Texas Trust Code.

In general, the Texas Trust Code requires that a trustee exercise the following duties:

• Duty of loyalty
• Duty of care
• Duty of impartiality
• Duty to furnish information
• Duty to provide certain beneficiaries an accounting when demanded
• Duty to act in good faith
• Duty to keep beneficiaries 25 years and older reasonably informed

As a trustee, you may have a beneficiary who is not happy with the distributions you are making, or the investments you have chosen. You may even have a situation where the terms of the trust agreement conflict with the Texas Trust Code.

It is important for you to understand your role as a trustee and to seek legal counsel if you find yourself involved in potential fiduciary litigation. We handle various types of litigation including guardianships, will and trust disputes, powers of attorney, interpretation of a will, and trustee-beneficiary disputes.

Estate Tax Planning

Currently, the estate tax exemption amount is $12.06 million for U.S. residents and citizens. This means that the first $12.06 million of a person’s property is exempt from estate taxes when they die. If a person has made gifts during their lifetime, the exemption may be reduced by the amount of the gifts.

There is also an annual gift tax exclusion of $16,000. This means that a person can give $16,000 each year to as many people as they choose without incurring any gift tax. The gifts do not have to be reported on a gift tax return.

Finally, there is a generation-skipping transfer tax (GST) that applies to property that is passed to “skip persons.” A skip person is someone who is two or more generations below the generation of the person making the transfer. The GST tax exemption is currently equal to the estate tax exemption.

The following table summarizes the estate tax, gift tax, and GST tax for 2022:

Estate Planning Attorney in Tarrant County, TX

The Law Offices of Richard C. McConathy can help you with matters involving estate planning in Fort Worth, Arlington, Grapevine, Keller, Southlake, or other cities in Tarrant County, TX. We provide compassionate counsel that is always geared toward our clients’ needs and well-being. We will do whatever it takes to ensure that any legal issue you are facing is resolved as quickly and painlessly as possible.

Contact us today at (817) 422-5350 or contact us online to get the help you need. Our firm also provides a wide range of family law practice areas for clients who happen to require those services, including divorce allegations.