FREQUENTLY ASKED QUESTIONS
CAN I RELY ON LEGAL INFORMATION I FIND ON THE INTERNET?
No. You cannot safely determine the legal course of action you should take using the information you find on the internet, including on this website. All internet legal information is inherently general and cannot be a substitute for a personal consultation with an attorney because the answer to almost all legal questions depends on the facts. Unless you are a lawyer, you won't know which facts are critical to determining the answers that are right for you.
The information on this website is not intended to provide any legal advice to you or anyone else and cannot create an attorney-client relationship between you and Brown & Lacallade, P.C. We take no responsibility for your reliance on the information provided on this website.
WHAT IS GUARDIANSHIP?
Guardianship is a court-established and –regulated relationship between someone whom the court has determined is not competent to manage some aspect of their life (called the “Ward”) and another person (called the “Guardian”) to whom the court has given the power to do so for the Ward.
In Texas each adult is free to manage his or her own financial affairs and all other aspects of his or her life unless and until a court determines that he or she is not competent to do so. A Guardianship case is lawsuit brought against someone to take away their freedom to manage their financial affairs or other aspects of their life. Because these are precious rights, Texas does not lightly take them away from anyone.
If the proposed Ward does not have a lawyer to represent them, the judge will appoint one. That lawyer will be paid out of the proposed Ward’s assets if a Guardianship is established or by the state if the proposed Ward does not have enough assets. Unless the proposed Ward’s lawyer agrees, the proposed Ward must be in the courtroom for the trial of the lawsuit.
The law requires that any Guardianship established must be the least restrictive possible. Texas has two types of Guardianship – Guardianship of the Estate and Guardianship of the Person.
To learn more about Guardianship, Click Here.
WHAT IS “PROBATE”?
Probate is a judicial proceeding concerning a dead person. Its purpose is to determine what the person owned at the time of death and who will get it. It also provides a venue for anyone owed money by the deceased to make a claim and get paid out of the estate to the extent is has assets. A probate proceeding also deals with such matters as what property is exempt for creditors’ claims and the statutory allowance for the deceased person’s immediate family (surviving spouse and minor children.)
Probate is a public proceeding, which means that all court proceedings and all of the papers filed in the case are open to the public. Many people find this loss of privacy problematic for their survivors.
To learn more about probate, Click Here.
WHAT DOES PROBATE COST?
Some states, such as California have minimum probate fees set by law. In California, that minimum fee is a percentage of the gross estate, without consideration of the debts against the estate.
In Texas, however, there is no set fee for probate other than the court filing fees, which are usually less that $500.
Surveys have indicated that the average cost of a probate case in a Texas metropolitan area is about 3.5 % of the value of the probate assets.
To learn more about probate, Click Here.
WHAT IS “LIFE PROBATE”?
Guardianship is sometimes called “Life Probate” because it is handled by the same courts in which probate cases are filed.
DO I NEED AN ESTATE PLAN IF ALL MY ACCOUNTS ARE “ToD” OR “PoD” TO OR "JTRoS" WITH MY SPOUSE OR CHILDREN OR TRUSTED FRIENDS?
As with almost all legal questions, the answer is, “It depends on the facts.”
If you have an account that you have made ToD (transfer on death) or PoD (pay on death) to someone, that account will not be a part of your probate estate UNLESS that person dies before you or you die in a common disaster. The PoD and ToD account designations appeal to those who want to remain in control of their assets and not expose them to the risks inherent in JTRoS accounts. However, a ToD of PoD designation, like a will, offers no protection against the risk of Guardianship if you become incapacitated and can no longer manage your account. Even without a guardianship, your disability could leave everybody powerless to make needed investment decisions as long as you are alive.
The JTRoS designation gives the other person on the account the power to use the assets in the account however he or she sees fit. That could be for your care if you are disabled or for a vacation. With a JTRoS account, you are putting total trust in that other person. You are also exposing the account to that other person’s creditors, for example if they are sued because of a wreck.
While probate can be avoided by using ToD, PoD, and JTRoS accounts, great care must be taken to keep accounts balanced if you have more than one child and they provide no estate or gift tax avoidance planning at all.
MY SPOUSE/CHILD HAD MY PoA. ISN’T THAT ENOUGH?
Charles Dickens begins his novel A Tale of Two Cities with the memorable line, “It was the best of times, it was the worst of times.” A parallel exists with the Power of Attorney (PoA) for property management. It is the most powerful of instruments and it is the weakest of instruments.
The PoA for property is the most powerful of instruments because with it your agent has almost unlimited power to use or abuse the trust you have placed in him or her.
In some states, anyone who unreasonably refuses to honor a PoA for property may be held liable for any resulting damages. Not so in Texas. Here, nobody has to accept a PoA for property. It can be refused for any reason or for no reason with impunity. That is why, in Texas, the PoA for property is the weakest of instruments.
Back when everybody knew their banker, the PoA for property was often quite useful. Now that our banks are typically part of a large national holding company, the PoA for property is much less likely to be accepted. Many banks will not accept a PoA for property given to a spouse more than 6 months ago and many national brokers will accept no PoA for property that is not on their own current form, which may be changed at any time without notice.