Tag: Articles

  • Tax Implications of Being an Executor in Texas

    When a person dies without having a will in place, the person who has been appointed executor is tasked with distributing all of the assets from the probate estate to those people and organizations named in the deceased’s will, or if there is no will, it falls on the executor to distribute everything at their discretion. The distribution of all assets triggers tax implications for the executor (and other parties) which must be dealt with under the applicable law.

    What are the tax implications of being an executor in Texas?

    As the executor of a estate in Texas, you may be responsible for paying taxes on behalf of the estate. This includes federal estate taxes, state taxes, and any debts the deceased owed at the time of their death.

    If the estate owes any taxes, it is your responsibility to ensure they are paid in a timely manner. Failure to do so could result in penalties and interest charges.

    It is important to work with a tax professional when dealing with estate taxes, as there are often complex rules and regulations involved. An experienced tax advisor can help you navigate the process and ensure that all taxes are paid correctly.

    What is exempt from probate and won’t be subject to estate taxes?

    When it comes to estate taxes, the federal government and most states exempt a certain amount of money from taxation. This is typically called the “exemption amount.” In 2019, the federal exemption amount is $11.4 million per person. This means that if you are an executor in Texas and your estate is valued at less than $11.4 million, your estate will not be subject to federal estate taxes.

    Texas has its own estate tax, but the exemption amount is much lower than the federal exemption amount. For 2019, the Texas exemption amount is $5 million per person. This means that if you are an executor in Texas and your estate is valued at more than $5 million, your estate will be subject to Texas estate taxes.

    Fortunately, there are ways to minimize or avoid paying Texas estate taxes. One way is to create a trust. Trusts can be used to transfer property to beneficiaries without going through probate. Trusts can also be used to minimize or avoid paying taxes on the transfer of property. Another way to minimize or avoid paying Texas estate taxes is to give gifts during your lifetime. You can give gifts up to the annual exclusion amount, which is $15,000 per person

    What is considered property that doesn’t qualify for exclusion from probate taxes?

    There are a few different types of property that don’t qualify for exclusion from probate taxes in Texas. These include:

    -Real estate: Any real estate owned by the deceased person at the time of their death is subject to probate tax. This includes any homes, land, or other buildings owned by the deceased.

    -Vehicles: All vehicles owned by the deceased person at the time of their death are subject to probate tax, including cars, trucks, boats, and RVs.

    -Businesses: Any businesses owned by the deceased person are subject to probate tax. This includes sole proprietorships, partnerships, LLCs, and corporations.

    -Investments: All investments owned by the deceased person at the time of their death are subject to probate tax. This includes stocks, bonds, mutual funds, and other types of investment accounts.

    How is probate money taxed and who pays the taxes?

    When it comes to taxes, the executor of an estate has a few different responsibilities. First, they must file a final income tax return for the decedent. They may also be responsible for filing state and local inheritance taxes, as well as any estate taxes that may be due. The executor is also responsible for making sure that all of the deceased person’s debts are paid, including any taxes that may be owed.

    Probate money is taxed as part of the estate, and the executor is responsible for paying those taxes. The tax rate will depend on the value of the estate and where it is located. In Texas, the inheritance tax rate is 0.5% for estates valued at less than $10 million, and 2% for estates valued at more than $10 million.

    If you are named as the executor of an estate in Texas, it’s important to understand the tax implications of your role. Consult with a tax professional to ensure that you are meeting all of your responsibilities and to minimize any potential liability.

    Who can get a refund on probate taxes paid and how does it work?

    If you’re the executor of an estate in Texas, you may be able to get a refund on probate taxes that were paid. Here’s how it works:

    The Texas Comptroller’s office offers a refund program for certain estates that have paid probate taxes. To be eligible, the estate must have been closed for at least two years and all claims against the estate must have been settled.

    If the estate is eligible, the executor can file a claim form with the Comptroller’s office. The claim form must be signed by all heirs or beneficiaries of the estate.

    Once the claim form is filed, the Comptroller’s office will review it and determine whether a refund is due. If a refund is approved, a check will be mailed to the executor.

    When does the executor need to file a final tax return for a will

    When an executor is wrapping up the estate of a deceased person, they may need to file a final tax return on behalf of the deceased. This is typically done when there are still assets remaining in the estate that need to be distributed to beneficiaries. In Texas, the executor has to file a final tax return if:

    -The estate owes any taxes to the state or federal government

    -The decedent died during the tax year

    -The decedent was a resident of Texas at the time of their death

    If any of these circumstances apply, the executor will need to file a final tax return within 9 months of the date of death.

    How much does an executor get paid in Texas under Probate Law?

    In Texas, an executor is entitled to a fee of 5% of the first $200,000 of the estate, 3% of the next $300,000, and 2% of the next $500,000. For example, if an estate is worth $500,000, the executor would be entitled to a fee of $20,000.

    Do you have to pay death taxes on inheritance in Texas?

    As an executor, you are responsible for ensuring that the deceased person’s taxes are paid. This includes any federal, state, and local taxes. You may also be responsible for paying any taxes on the inheritance that the beneficiaries receive.

    Are executor fees taxable by the IRS?

    If you’re named as an executor in a will, you may be wondering if the fees you’ll earn are taxable by the IRS. The good news is that, in general, executor fees are not considered taxable income. However, there are a few exceptions to this rule.

    First, if you’re paid a salary by the estate for your work as executor, that salary is considered taxable income. Second, if you receive reimbursement from the estate for expenses you incurred while performing your duties as executor, those reimbursements are also considered taxable income.

    Finally, if any of the assets of the estate are distributed to you as part of your compensation for serving as executor, those assets may be subject to capital gains taxes. For example, if the estate includes a piece of property that has appreciated in value since the decedent’s death, any profit you make on the sale of that property will be subject to capital gains taxes.

    If you have any questions about the tax implications of being an executor, it’s best to speak with a tax professional or an attorney who specializes in wills and estates.

    How to probate a will in Texas?

    In Texas, the process of probating a will is overseen by the court system. The first step is to file the will with the court and have it admitted to probate. The next step is to have the executor named in the will qualified by the court.

    What happens in probate court?

    Probate is the court-supervised process of identifying and gathering the assets of a deceased person (the “decedent”), paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries. The probate process takes place in probate court.

    The post Tax Implications of Being an Executor in Texas appeared first on Austin Probate Attorney, Kreig LLC.

  • What is Muniment of Title under Texas Probate Law?

    In Texas, a muniment of title is a judicial document that proves an individual’s ownership of real property. This document is typically used when the owner does not have a deed or other physical evidence of ownership. The muniment of title must be filed in the county where the property is located and must include […]

    The post What is Muniment of Title under Texas Probate Law? appeared first on Dallas Probate Attorneys.

  • Dependent vs. Independent Probate Administration

    Dependent Probate Administration Before filing the probate application, one has to make a choice between dependent or independent probate administration. The term “dependent administration” refers to the probate being administered by the personal representative with direct supervision by the court. As explained below, dependent administration is an extremely restrictive method for administering an estate. This […]

    The post Dependent vs. Independent Probate Administration appeared first on San Antonio Probate Attorney, Kreig LLC.

  • Can My Ex-Spouse Get My Inheritance?

    If you’re not on good terms with your ex, you might not want to hear this – but in some cases, they could actually inherit your money or property if you die without a will. It’s important to know the laws in your state so that you can plan accordingly – read on for more information.

    How Assets Transfer At Death

    When a person dies, their assets are transferred to their heirs. The process of asset transfer is called probate. Probate is the legal process of transferring a person’s assets to their heirs after they die.

    There are two types of probate:

    1. testate – when the person dies with a will
    2. intestate – when the person dies without a will

    If the person dies with a will, then their assets are transferred according to the instructions in the will. If the person dies without a will, then their assets are transferred according to state law.

    In most cases, the deceased person’s spouse is the first heir. If there is no spouse, then the children are the next heirs. If there are no children, then the parents are next in line. If there are no parents, then the siblings are next in line. And so on.

    The order of heirs can be different in some cases, such as if the deceased person was married more than once or if they had children from more than one relationship.

    It’s important to know how assets transfer at death because it can affect your inheritance. For example, if you’re the spouse of a deceased person, you may have to share your inheritance with the deceased person’s children. Or, if you’re the child of a deceased person, you may have to share your inheritance with the deceased person’s siblings.

    In some cases, assets may not be able to be transferred at death. This can happen if the asset is jointly owned with someone else or if the asset is in a trust.

    What Happens After Divorce?

    It can be pretty tough to think about what happens after divorce, but it’s important to be prepared for anything. One thing you may not have considered is what could happen to your inheritance. It’s possible that your ex could end up with a portion of it, depending on the laws in your state.

    This is something you’ll want to talk to an attorney about, as they can advise you on the best way to protect your assets. You may also want to consider mediation or arbitration to try and come to an agreement outside of court. No one wants to think about their hard-earned money going to their ex, but it’s important to be prepared for anything.

    Won’t My Divorce Decree Override a Named Beneficiary?

    If you’re going through a divorce, you may be wondering what will happen to your inheritance. Can your ex-spouse really claim it?

    The answer is maybe. It all depends on how your divorce decree is worded and whether or not you have a valid prenuptial agreement in place.

    If your divorce decree does not specifically address the issue of inheritance, then your ex-spouse may have a claim to it. This is especially true if you live in a community property state like Texas.

    However, if you have a valid prenuptial agreement that states that all assets will be kept separate in the event of a divorce, then your ex-spouse will likely not be able to get your inheritance.

    Do You Need a Texas Probate Attorney to Help?

    If you’re not sure what will happen to your inheritance in the event of a divorce, it’s best to speak with an experienced attorney who can review your specific situation and give you guidance on how to protect your assets.

    https://austin-probate.com/

    Related Questions

    Can a divorced wife inherit?

    In Texas, if a man dies without a will and has a wife, she is considered by the court to be entitled to a portion of his estate. This portion is called an “elective share” and is based on how long she was married and how much family property she received during their marriage.

    The elective share is also known as the “minimum share.” It doesn’t mean you have to take it. It means that, if you do not accept it, another heir will likely get it. In Texas, if a woman dies without a will and has no surviving husband or children, her husband or children are the heirs entitled to her estate.

    Can I go after my ex husband’s inheritance?

    The short answer is: yes. You can go after any property your ex has, whether or not you have a claim to it as a separate property.

    If you were never married and you have no children together, there is no spouse to get half of the community estate. That means you can go after all of it, even though it was originally an ex spouse’s separate property.

    However, your right to claim these benefits may be limited by the statute of limitations in the state where you live.

    When a husband dies what is the wife entitled to?

    In Texas, when a husband dies, a surviving wife is not automatically entitled to all of his property. Instead, the wife is usually entitled to a “probate estate” in the form of an asset that is given to her called an elective share. The main purpose of the Texas Probate Code’s elective share provision is to ensure that surviving spouses aren’t disinherited.

    When does an inheritance become marital property? Is it considered upon death?

    An individual who receives an inheritance may find themselves wondering if the inheritance is considered marital property. In Texas, there are two different things that factor into an inheritance, and each of them can lead to different results.

    The first is the time of the inheritance. Some inheritances are received before the marriage. These are typically from a blood relative or from an estate left by a family member. Inheritances that are received before the marriage are not considered marital property since they were already owned by the individual. They are their property, and they will not be affected by any laws that might change upon marriage.

    The second factor is the way the inheritance is received. If the inheritance is received in a trust, it is not considered marital property. This is because it is not part of the decedent’s estate. In contrast, if an inheritance is received directly, then it is considered to be owned by both parties.

    Is future inheritance considered in divorce settlement?

    As part of a divorce, spouses may consider the inheritance they will receive from a future will. If a probate division of estate is being considered, it is important to know how this division can impact a divorce settlement.

    The answer is that future inheritance is not typically considered during divorce settlement discussions. This is because after a probate division of estate, in most cases, the inheritance belongs to the heirs, who are not already a part of the divorce settlement process.

    The post Can My Ex-Spouse Get My Inheritance? appeared first on Austin Probate Attorney, Kreig LLC.

  • Can a New Will Revoke a Will That’s Already Probated?

    When a will is probated it is declared as valid and the executor is given permission by a court to distribute assets according to the provisions of the document. What happens when a will made later in time that revokes the previously probated will is sent to a court for probate? Estate of Morris explains […]

    The post Can a New Will Revoke a Will That’s Already Probated? appeared first on San Antonio Probate Attorney, Kreig LLC.

  • What’s the difference between Tangible and Intangible Assets in Probate?

    With a will, you can divide both your tangible as well as your intangible assets. Whether an item belongs in the estate or not depends on what type of asset it is. It’s very important to make this distinction between tangible and intangible assets, otherwise the distribution of an item of significant value could be affected.

    Tangible assets, rights, and property examples

    Tangible personal property is any physical item other than real estate. Tangible personal property includes furniture, fixtures, machinery and equipment. Tangible personal property includes any item that is or can be removed or transported without material change to its form or function, such as apparel and furnishings.

    Intangible assets: Non probate assets, real estate and personal property

    Intangible property generally includes assets which are not physical. Common examples include assets like cash, reputation, copyrights, patents , and goodwill. Intangible assets may also include property rights or claims to property that is itself not tangible. For example, ownership of land includes the right to use it, licenses that grant limited access to computer software, and securities such as bonds or stocks. Basically, intangible assets are not physical in nature.

    Is money tangible personal property?

    It is common to assume that since money is physical, it is a tangible asset. However, the courts have ruled that money is an intangible asset. However, if the decedent owned some personal property that was not of a fungible nature, such as a coin collection or valuable currency items that the decedent identified specifically, it could be part of his or her intangible personal property and would pass outside the will. But, generally speaking, cash is an intangible item.

    Are stock certificates tangible property?

    What about stock certificates? A recent case analyzed whether stock certificates in a closely held company could be considered tangible personal property. Despite the plaintiff’s argument that stock certificates were tangible assets, the court ultimately found that they were intangible and therefore not subject to the decedent’s Will. The court ruled that the document only represented what the actual interest was in the corporation, so it could not be admitted into evidence.

    Do you need to hire an attorney to distribute an estate?

    Therefore, it is always important to pay close attention to how an executor classifies assets during distribution of an estate. The classification of assets can be very important in the distribution process because it could mean that tangible assets, such as real estate or vehicles, are distributed differently than intangible assets, like stocks and bonds. If you have any questions, call one of our trusted probate attorneys for a free consultation.

    Use the calendar on the right (–>) to schedule your FREE consultation today!

    https://austin-probate.com/

    What is the difference between tangible and intangible personal property?

    Intangible personal property is the most difficult to describe since it doesn’t physically exist. In Texas, intangible personal property refers to any asset that isn’t real estate, money or other tangible items. Determining who inherits intangible items can be difficult since not everyone will receive the same type of assets. A good example of intangible personal property includes things like art, stocks and bonds, life insurance, stocks and cars.

    Laws on probate assets are often very different in each state. This is because states have different laws on which items must be probated and which ones don’t need a formal probate. For example, in California, Arizona, Nevada and Oklahoma, the only assets that need to go through a formal probate court are real estate and money. Other assets pass straight to the person who inherits the item.

    In contrast, tangible personal property is anything that can be physically touched. This would include items such as furniture, clothing, jewelry and vehicles. Tangible personal property is generally much easier to divide up since it can be divided into equal shares. For example, if there are three children inheriting a home, each child would receive an equal share of the home.

    It’s important to note that some states consider certain types of intangible personal property to be probate assets. For example, in Texas, stocks and bonds are considered probate assets. This means that they must go through the formal probate process in order to be transferred to the rightful heirs. Other states have different laws on which intangible items are considered probate assets.

    What are examples of tangible and intangible assets?

    When you are dividing up your parent’s estate after they pass away, you’ll need to determine what is considered an asset, and what is not. Here are some examples of tangible and intangible assets:

    Tangible Assets Tangible assets are those that you can touch, like jewelry, artwork, or other valuable items. Tangible assets will be identified on your parent’s balance sheet.

    Some people might consider their family home to be a tangible asset, but it can also be an intangible one. The same is true of any property that your parents own outright. If there are no mortgages or other loans against the property, then it qualifies as an asset.

    Intangible Assets Intangible assets are those that you cannot touch, such as patents, copyrights, and goodwill. These items may not be listed on your parent’s balance sheet, but they can still have value. You’ll need to have these appraised in order to determine their worth.

    What are intangible assets in a will?

    Many people will put down things like jewelry and money in a will. However, there are things that may be considered intangible assets as well. Things like trademarks or patents are also included in this category as well. In order to understand what they are and why they are in a will, it is important to understand what an intangible asset is. An intangible asset is defined as any nonphysical asset that has value. For example, patents, copyrights, trademarks and goodwill can all be considered intangible assets.

    The estate tax laws state that any property that has an established value of an asset can be considered an intangible asset. This can be determined by the person’s total assets and whether or not the fair market value is greater than the total value of the tangible assets. This only comes into play when other assets have been exhausted. Once the other assets have diminished, the value of the intangible assets will help lower the tax burden on the estate.What are some of the benefits of creating a trust?

    There are many reasons why someone might want to create a trust. One common reason is to avoid probate. Probate is the legal process that happens after someone dies, during which their assets are distributed according to their will or estate plan. Trusts can help avoid probate because they allow assets to be transferred directly to beneficiaries without going through probate court. This can save time and money, and it can also keep your affairs private since probate proceedings are public record.

    Another reason people create trusts is to protect their assets from creditors or lawsuits. When you put assets in a trust, they become protected from your creditors—meaning they can’t take them to pay off your debts. This can be especially helpful for business owners or people with significant wealth who may be at risk for lawsuits. Trusts can also help you manage your assets if you become incapacitated since the trustee will be able to step in and make decisions on your behalf.

    Lastly, trusts can be used for tax planning purposes. For example, if you have a large amount of money in an IRA, you may want to put it in a trust so that your heirs won’t have to pay taxes on it when they inherit it. There are many different types of trusts, and each has its own set of rules and regulations—so it’s important to work with an attorney or financial advisor who can help you choose the right one for your needs.

    What does tangible and intangible mean in a will?

    A tangible asset is one that you can touch, like your house or car. Intangible assets are less concrete. They don’t have any physical form and may be difficult to value, like a good friend or a closely held business.

    Texas Law defines both tangible and intangible assets in terms of property.

    In Texas, property includes both real (tangible) and personal (intangible) property; some property may be classified as both.

    Texas Law states that Intangible personal property includes all legal or equitable interests that are not considered real property under the laws of this state. Some examples of intangible assets are copyrights, patents, and goodwill. These are all things that have value, but you can’t touch them or see them. They can be very difficult to value because there is often no market for them.

    One example of a tangible asset is your house. It’s something that you can touch and see. It’s usually easy to value because you can look at similar houses in the area and get an idea of what it’s worth.

    What is tangible personal property in a will?

    There are a number of different assets that may be distributed in a will. The most typical assets are houses, vehicles (tangible personal property, or TPP), bank accounts, valuable personal property and retirement accounts. There is TPP, which is the most typical item that people will find in their will. But what is TPP? TPP is anything that you own that you can physically touch, like your car, your computer, furniture, etc. It doesn’t include financial instruments or intangible personal property (IP).

    The post What’s the difference between Tangible and Intangible Assets in Probate? appeared first on Austin Probate Attorney, Kreig LLC.

  • Effects of Testamentary Capacity and Undue Influence on Wills

    Testamentary capacity refers to a person’s ability to create a valid will. This ability deals both with being of legal age to create a will (18) and the mental capacity of the person making the will. Undue Influence occurs when a person acts under the influence of another rather than of their own free will […]

    The post Effects of Testamentary Capacity and Undue Influence on Wills appeared first on Dallas Probate Attorneys.

  • Venue Transfer vs. Domicile

    Venue refers to the court in which a proceeding takes place. A party may want to transfer venue for a number of reasons including convenience, type of court, or possibly because the original venue lacks the jurisdiction/ability to hear the case. A person’s domicile is their permanent place of residence. How is domicile established? When […]

    The post Venue Transfer vs. Domicile appeared first on San Antonio Probate Attorney, Kreig LLC.

  • Can a Holographic Will Be In Someone Else’s Handwriting?

    A holographic will is a handwritten will that is not witnessed. The testator, the person who made the will, must write, date, and sign the entire will. This type of will is valid in any state, including the state of Texas. However, as with most wills, it must be proven to be your will and not a forgery before it can become effective. But must the will be entirely in the testator’s handwriting? This case gives us some help in answering that question.

    Holographic Will

    A will entirely written and signed by a testator, used as an alternative to a will drafted by an attorney.

    Texas Probate Case

    In re Estate of Capps, 154 S.W.2d 242, 245 (Tex. App. – Texarkana 2005)

    Facts & Procedural History

    After Nadine Capp’s passing, her physical will was unable to be found. The trial court found that Ms. Capp (Decedent) had intended for her property to be dispersed as instructed by the will document, and admitted it to probate as a holographic will. The trial court also appointed Devon Roberts as the administrator for Decedent’s estate.

    Truman Bishop (temporary administrator of Decedent’s estate) and Hulene B. Parvar appealed, arguing that the evidence was insufficient to support the admission of the will to probate considering the original will had not been found. They also declared that the evidence was insufficient regarding the proper execution of the will, and that the appointment of Roberts rather than Bishop was an error. The Court of Appeals affirmed the trial court’s judgment, holding that the evidence was sufficient to allow for the will’s admission to probate (specifically that it showed the cause of nonproduction and that the will had not been revoked). The evidence provided showcased that the will had been created in Decedent’s handwriting and that the choice of administrator for Decedent’s estate was proper.

    Main Considerations: Valid Written Will Requirements

    What evidence must be provided to show non revocation (the rebuttal of the presumption of revocation) of a lost will?

    Proof of circumstances contrary to the presumption of revocation, or evidence that the will was fraudulently destroyed by another person, can defend against the invalidation of a lost will. Using the standard sufficiency analysis rule, the testimony of a person (witness) who states that a testator did not revoke the will has been held sufficient evidence of non revocation to support probate of the will. Additionally, evidence that shows a decedent recognized a will following its execution and had no issues with its intended beneficiaries or the will’s contents can be used to rebut the presumption of revocation of a missing original will.

    The Takeaway

    In re Estate of Capps shows that a holographic will can/will be regarded as valid if either the will is completely in the testator’s handwriting (self-proven) or two witnesses testify to the presence of the testator’s handwriting. A will, intended to be holographic, will be enforced despite the existence of words not in the testator’s handwriting if those words do not alter the meaning of the will.

    Do You Need an Experience Attorney to Probate a Will?

    Do you need help with a probate matter in Austin-metro area or the surrounding communities? We are experienced probate attorneys who represent clients with sensitive probate matters. If so, please give us a call us at 512-273-7444 or use the contact form to the right (–>) to see how we can help.

    https://austin-probate.com/

    Why is a handwritten will called holographic?

    A handwritten will is called holographic because it is written entirely in the handwriting of the person who made it. This type of will is typically made when someone doesn’t have time to go to a lawyer or make a more formal will, such as a last will and testament or a simple will.

    What do you write in a holographic will?

    A holographic will is one made entirely in the handwriting of the testator. Holographic wills are legal in Texas. A holographic will begins with the words “I, (name), being of sound mind, hereby…” You must make it clear that the document is your will. You must also sign and date it.

    To make a holographic will, you simply write out your wishes. You can also have at least two disinterested witnesses sign it to “prove” that you actually wrote it. In other words, they certify that they saw you write it.

    Does a holographic will have to be in cursive?

    A holographic will is a handwritten will that is entirely in the handwriting of the testator, the person who is making the will. The will does not have to be in cursive, but it does have to be in the testator’s own handwriting.

    What is the difference between a simple will and a holographic will?

    A simple will is a will that is executed by a lawyer or notary in accordance with the formalities of the law. A holographic will is a will that is entirely handwritten, dated and signed by the testator.

    In order for a handwritten will to be legal, the document must be in your own handwriting. No one can write it for you and it cannot be typed. You can write in cursive or print, but the entire will must be in your handwriting only.

    The post Can a Holographic Will Be In Someone Else’s Handwriting? appeared first on Austin Probate Attorney, Kreig LLC.