probate client information packet - tagged docs … · web viewthe word "independent"...

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FOR OFFICE USE ONLY

RE:

CLIENT NO.:__________________________ MATTER NO.:

REVIEW DUE DATE: FILE NO. _________________________________INITIAL ACTION ITEM: WEBSITE ACCESS:

FEE ARRANGEMENT:FIXED FEE: $

ESTIMATED COSTS: $

HOURLY RATE: $

RETAINER RECEIVED: $

BILLING ADDRESS:

NOTES:

CONTACTS CATEGORIES (SELECT APPLICABLE):

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LEGAL MATTER ACCEPTED/REJECTED: ______ DATE OF ACCEPTANCE/REJECTION:

CREDIT CARD INFORMATION:MasterCard / Visa # Expiration date Billing address:

Name on card:


CLIENT INFORMATION FORMDATE: _________________

ATTORNEY:

CLIENT'S NAME:

NEW CLIENT EXISTING CLIENT/NEW MATTER

OTHER NAMES WHICH CLIENT IS OR HAS BEEN KNOWN BY:

RESIDENCE ADDRESS:

BUSINESS ADDRESS:

MAILING ADDRESS:

RESIDENCE PHONE: _____________________ BUSINESS PHONE:

CELL PHONE: _________________ BUS. FAX: ______________________ PAGER:

E-MAIL ADDRESS: _____________________ WEBSITE ADDRESS:

MARITAL STATUS: _________ SPOUSE'S NAME:

CLIENT: DATE OF BIRTH: _____________ AGE: _______ PLACE OF BIRTH:

SPOUSE: DATE OF BIRTH: _____________ AGE: _______ PLACE OF BIRTH:

CLIENT: SOCIAL SECURITY NO.: ____________________ DRIVER'S LICENSE NO.:

SPOUSE: SOCIAL SECURITY NO.: ____________________ DRIVER'S LICENSE NO.:

CLIENT EMPLOYMENT:COMPANY NAME:

COMPANY ADDRESS:

MAIN PHONE:

PROFESSION/JOB TITLE: ________________________ DEPARTMENT:

ASSISTANT:

PERSON WE CAN CONTACT IF WE CANNOT REACH YOU:

NAME:

ADDRESS:


MOBILE PHONE: ______________ BUS. FAX: ______________ PAGER:

RELATIONSHIP:

PERSON RESPONSIBLE FOR BILL, IF OTHER THAN CLIENT:

ADDRESS:


REFERRED BY: ______ PREVIOUS CLIENT ______ ACQUAINTANCE ______ ADVERTISING ______ REFERRAL SERVICE

ADDITIONAL INFORMATION (IF APPLICABLE):

OTHER ADDRESS:

OTHER EMAIL:

OTHER PHONE:

OTHER FAX NO.:

MISCELLANEOUS INFORMATION:

Client Information Form 2


PROBATE INFORMATION FORM

DECEDENTName of Decedent: ________________________________________________________________________Address of Decedent: ______________________________________________________________________Date of Birth: __________________ Place of Birth (city/state): ______________________________________Date of Death: __________________, Place of Death (city/state):____________________________________Social Security No. of Decedent _________________________ Decedent's Spouse: _______________________________________ Spouse SSN: ___________________Date of Marriage: ____________________ Spouse Date of Birth: _______________________________Place of Marriage (city/state): ________________________________________________________________(If applicable) Date of: Spouse's Death: __________________ OR Divorce: ___________________________Number of prior marriages and name(s) of Decedent's previous spouse(s), if any: _______________________________________________________________________________________________________________Date of previous spouse's: Death: _________________ OR Divorce: ________________________________Name(s) of Decedent's Children: Note if they are under 18 ________________________________________________ _______________ ________________________________________________ _______________ ________________________________________________ _______________ ________________________________________________ _______________Date of will (if any): ____________________ Number/date of codicils (if any): _______________________ Name and Addresses of Witnesses on will (if known): _______________________________ ____________________________________________________ _______________________________ ____________________________________________________ _______________________________ ____________________________________________________Name of Executor: __________________________ SSN: ________________ Drivers License:______________ Address of Executor: _______________________________________________ Phone: __________________If Executor resides out of state, name and address of Resident Agent in Texas:_____________________________________________________________________________________________________________________Executor’s Relationship to Decedent:____________________________________________________________Does will make gift to Charity or Government? Yes _____ No ______Were children born or adopted after will signed? Yes _____ No ______Was there a Marriage or Divorce after will signed? Yes _____ No ______Estimated value of the estate rounded to the nearest $50,000.00? $_________________________

Names, addresses, ages, of heirs/beneficiaries:___________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ ______________________________________________________________________________________ __________________________________________Names and addresses of trustees named in will, if any:________________________________________ _____________________________________________________________________________________ _____________________________________________Name and address of person to prove up Will (if different than Executor)? ______________________________________________________________________________________________________________________

Probate Information Form 2


STEP BY STEP GUIDE FOR INDEPENDENT EXECUTOR

Step 1 Deliver Will, Living Trust (if any) and Death Certificate to Attorney and complete Client Information Form and Probate Information Form. Also complete Affidavit of Heirship Form (if applicable). Sign Contract for Legal Services. Gather names and addresses of beneficiaries under the will in order to obtain waivers of notice pursuant to Texas Probate Code Section 128A or to serve notice to beneficiaries under will within 60 days of the signing of the order admitting will to probate (notice must be sent by Certified or Registered Mail).

Step 2 Read Getting Started with Administration of Estate and visit website at www.bcswlaw.com to read Frequently Asked Questions (FAQs) on Probate.

Step 3 Read Instructions and Duties of Independent Executor

Step 4 Attorney will file Application for Probate of Will with Court.

Step 5 Appear with attorney in Court to probate will and receive Letters Testamentary.

Step 6 If charitable beneficiaries named in Will, notice to attorney general to be done by attorney within 30 days of probating will.

Step 7

Step 8

Step 9

If decedent paid taxes to Texas Comptroller, notice to Texas Comptroller to be done by attorney within 60 days of probating will.

If Beneficiaries under the will do not sign waivers, a notice to all beneficiaries must be sent within 60 days of the signing of the order admitting will to probate (notice must be sent by Certified or Registered Mail and include a copy of the will and order Admitting Will to Probate).

Within 90 days of the signing of the order admitting a will to probate, there must be filed with the clerk either an affidavit by personal representative or a certificate by their attorney that notice has been given notice of the filing of the probate, including a copy of the will and order admitting will to probate.

Step 10 Complete Creditor Section of Inventory, Appraisement, List of Claims, Debts and Creditor Information Form and return to attorney office within 45 days of probating will.

http://www.bcswlaw.com/

Step 11 Give notice to secured creditors within 60 days of probating will. Notice to general creditors in newspaper to be done by attorney.

Step 12 Obtain Federal Tax Identification Number for the Estate.

Step 13 Open Estate bank account and deposit all funds received into the account.

Step 14 Complete Inventory, Appraisement, List of Claims, Debts and Creditor Information Form and return to attorney office within 75 days of probating will. Attorney will file inventory within 90 days unless deadline extended by Court.

Step 15 If taxable estate, also complete “706 Checklist” Form and return to attorney office within 180 days of probating will. Federal estate tax return (Form 706) to be prepared by accountant or attorney and filed within 9 months of date of death, unless extended. Any taxes must be paid at 9 months whether or not filing of tax return is extended.

Step 16 Prepare and file Final 1040 Income Tax Return for the decedent by April 15 of year after decedent’s death.

Step 17 Choose an appropriate taxable year for the estate and prepare and file the Estate Income Tax Return (Form 1041).

Step 18 Pay all debts, taxes and expenses of Estate.

Step 19 Distribute assets or fund trusts created by decedent’s death. If a trust is created by decedent’s death, obtain federal Federal Tax Identification Number for the trust and open any necessary accounts.

Step 20 If a taxable estate, obtain Federal Estate Tax closing letter from IRS. If a Federal Estate Tax closing letter is to be received from IRS, delay funding in Step 17 until received.

Step 21 If applicable, obtain a release of liability from heirs and beneficiaries before distributing assets and funding trusts.

Step by Step Guide for Independent Executor 2


INFORMATION FORM FORAFFIDAVIT OF HEIRSHIP

INDIVIDUAL COMPLETING THIS WORKSHEET:NAME: ___________________________________________________________________________Mailing Address: ___________________________________________________________________Phone Numbers: ____________________________________________________________________Relationship to Decedent: _____________________________________________________________

NAMES OF TWO DISINTERESTED PERSONS WHO HAVE PERSONAL KNOWLEDGE OF DECEDENT’S ESTATE:These two persons cannot be heirs of the Decedent’s estate, nor can they be related to the family and these persons must be available to sign the affidavit upon completion:1. _______________________________________________________________________________________________2. _______________________________________________________________________________________________

DECEDENT:NAME: First Name: ___________________ Middle Name: ______________________ Maiden Name (if applicable): ________________________ Last Name: _______________________Date of Birth: ____________________ Place of Birth: city __________________ county _________________ state ______________Date of Death: __________________Place of Death: city __________________ county _________________ state ______________

Decedent’s Marriage Just Prior to or At Date of Death:Spouse’s Full Name: First Name: ___________________ Middle Name: ______________________ Maiden Name (if applicable): ___________________ Last Name: _________________________Date of Marriage: ____________________Place of Marriage: city __________________ county _________________ state ______________How did the marriage end (check one)? Decedent’s death ______ Spouse’s death ______ Divorce ______If the marriage ended by Spouse’s death:

Date of Spouse’s death: ________________________Place of Spouse’s death: city __________________ county _________________ state ______________

If the marriage ended by divorce:Date of Divorce: __________________Place of Divorce: city __________________ county _________________ state ______________

Were there children born to or adopted of this marriage (check one)? yes_____ no_____If yes, Children Born to or Adopted of this Marriage1:

Child 1: Name: _____________________________ Birth date: _______________________________Birth Place: city __________________ county _________________ state ______________Present mailing address: _________________________________________________________Date and place of death (if applicable): _____________________________________________If Deceased, was the child survived by a spouse or children: yes _________ no ____________



REPEAT ON BACK OF THIS PAGE IF THERE ARE ADDITIONAL CHILDREN OF THIS MARRIAGE

Decedent’s Prior Marriages (if applicable):Did the Decedent have any prior marriages? yes_____ no______If yes, number of prior marriages: ____________________

1st Prior Marriage:Prior Spouse’s Full Name: First Name: ___________________ Middle Name: ______________________ Maiden Name (if applicable): ________________ Last Name: ___________________Date of Marriage: ____________________Place of Marriage: city __________________ county _________________ state ______________How did the marriage end (check one)? Decedent’s death ______ Prior Spouse’s death ______ Divorce ______If the marriage ended by Prior Spouse’s death:

Date of Prior Spouse’s death: ________________________Place of Prior Spouse’s death: city __________________ county _________________ state ______________


1 *If any of Decedent’s children (regardless of which marriage the child was born or adopted or if the child was born to or adopted by

Decedent outside of marriage) predecease the Decedent and were survived by a spouse or children, fill out the section on this form for that

child and, in addition, fill out a separate Information Form for Affidavit of Heirship on the deceased child.Information Form For Affidavit Of Heirship 2

Were there children born to or adopted of this marriage (check one)? yes_____ no_____If yes, Children Born to or Adopted of this Marriage:





2nd Prior Marriage:Prior Spouse’s Full Name: First Name: ___________________ Middle Name: ______________________ Maiden Name (if applicable): _________________ Last Name: ________________Date of Marriage: ____________________Place of Marriage: city __________________ county _________________ state ______________How did the marriage end (check one)? Decedent’s death ______ Prior Spouse’s death ______ Divorce ______If the marriage ended by Prior Spouse’s death:

Date of Prior Spouse’s death: ________________________Place of Prior Spouse’s death: city __________________ county _________________ state ______________




Information Form For Affidavit Of Heirship 3




REPEAT ON SEPARATE PAGE IF THERE ARE ADDITIONAL MARRIAGES.

Children Born to or Adopted by Decedent Outside of MarriageWere there any children born to or adopted by Decedent outside of marriage (check one)? yes____ no____If yes, Children Born to or Adopted Outside of Marriage:




REPEAT ON BACK OF THIS PAGE IF THERE ARE ADDITIONAL CHILDREN OUTSIDE OF MARRIAGE

Information on Surviving SpouseIf the Decedent was survived by a spouse on the Decedent’s date of death, fill out the following for the surviving spouse:Has the Surviving Spouse remarried since Decedent’s date of death (check one)? yes____ no____If yes, name of Surviving Spouse’s next spouse: ____________________________ & date of remarriage ____________Was the Surviving Spouse married prior to his or her marriage to Decedent (check one)? yes____ no____If yes, name of Surviving Spouse’s previous spouse: _______________________________How did the marriage end (check one)? Prior Spouse’s death ______ Divorce ______


If the marriage ended by Prior Spouse’s death: Date of Prior Spouse’s death: ________________________Place of Prior Spouse’s death: city __________________ county _________________ state ______________






REPEAT ON BACK OF THIS PAGE IF THERE ARE ADDITIONAL CHILDREN OF THIS MARRIAGEWere there any children born to or adopted by the Surviving Spouse outside of marriage (check one)? yes____ no____If yes, Children Born to or Adopted by the Surviving Spouse Outside of Marriage:




REPEAT ON BACK OF THIS PAGE IF THERE ARE ADDITIONAL CHILDREN OUTSIDE OF MARRIAGEInformation Form For Affidavit Of Heirship 5

Estimated value of the Decedent’s estate (one-half community estate and entire separate estate) rounded to the nearest $50,000.00? $_________________________

Special Notes: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________



CONTRACT FOR LEGAL SERVICES

ATTORNEY:BAIRD, CREWS, SCHILLER & WHITAKER, P.C.[Sometimes referred to herein as "Attorney", "I", "we", "our", or "us"]

CLIENT: THE PERSON(S) SIGNING THIS CONTRACT AS “CLIENT”[Sometimes referred to herein as "Client", "you", or "your"]

ENGAGEMENT. You have asked that we represent you in regard to probate or guardianship matters.

Probate matters may include:

Preparing the Application for Probate of Will;

Arranging for the Proof necessary to have the Will admitted to Probate;

Appearing in Court to have the Will so admitted;

Preparing the Order to be signed by the Judge to admit the Will to probate;

Preparing and filing Oath of Executor;

Preparing and arranging for the publication of Notice to Creditors;

Preparing and serving Notices to Secured Creditors;

Determining the nature, extent, and valuation of the Estate;

Preparing and filing the statutory Inventory, Appraisement, and List of Claims, and obtaining the Judge's approval;

Determining the nature and amount of the liabilities of the Estate;

Assisting in the transfer of title to all of Decedent's assets;

Investigating, determining, calculating, allocating or dealing with asset valuations and furnishing tax basis information to heirs and beneficiaries; and

Reviewing federal estate tax returns prepared by your accountant.

Guardianship matters may include:

Preparing the Application for Appointment of Guardian;

Appearing in Court to have the Guardian appointed;

Preparing the Order to be signed by the Judge to appoint the Guardian;

Preparing and filing Oath of Guardian;

Determining the nature, extent, and valuation of the Ward's estate;

Determining the nature and amount of the liabilities of the Ward's estate;

Assisting in obtaining bond; and

Preparing annual accountings.

We wish to describe the scope of our proposed representation and the circumstances under which we may provide representation.

CONTRACT TERM. The term of this contract will begin on the date this contract is signed and delivered. The term of the contract will end 30 days after the probate estate is settled and assets distributed to the heirs or the Guardianship is terminated by the Court.

FEES & EXPENSES. You agree to the fees set out in this contract and guarantee payment according to the terms of this contract.

Fixed Fees. A fee schedule for most probate and guardianship documents prepared and services performed by this firm is attached to this letter. The cost of our services for the work described as fixed-fee work is described on that schedule. This amount is called the "fixed fee". The fixed fee is payable as billed. Statements for fees and expenses will be delivered to you either in person, electronically (e-mail or facsimile), or by U.S. Mail and will be due upon receipt unless you have made some other arrangement with our firm. Unless you inform us otherwise, your statements will be delivered to you by e-mail. If you have more than one e-mail address, you will need to inform us of the e-mail address

Contract for Legal Services 2

you prefer for your billing. If you do not have an e-mail address, your statements will be delivered to you either in person, by facsimile, or by U.S. Mail. You may pay your bill by cash, check, Visa, or MasterCard. We do not accept any other credit cards. If you would prefer that we automatically charge your bill to your Visa or MasterCard, please fill out and sign the authorization on the last page of this Contract (before the addendums), and we will automatically charge the amount owing on the bill to your credit card no sooner than the fifth (5th) day following the day the electronic bill is sent by e-mail or facsimile or the paper bill is mailed.

Other Services. In individual situations where more complex probate and guardianship proceedings are necessary we will bill for additional necessary services at an hourly rate of compensation. Our hourly rates include telephone calls to and from you. The current hourly rate for senior attorneys is $275 per hour. The current hourly rate for associates is $200 per hour. The current hourly rate for board certified legal assistants is $125 and for staff is $75 per hour. All time will be recorded in quarter-hour units. These services will be billed monthly as incurred. Any increase in the hourly fees while representing you will be billed to you at the increased rates.

Expenses. We may incur various expenses in connection with representing you in this matter. These expenses include postage, photocopying, telephone and other communication charges, filing fees, messenger delivery and transportation charges, and other miscellaneous disbursements. You agree to reimburse us for all expenses incurred or paid by us. If you are billed directly for the expenses or if the expenses are given to you to pay, you agree to make prompt, direct payments of the expenses. We will not incur any unusual or large expenses before you agree to the expense.

Circumstances Under Which Minimum Fees May Increase. The only basis for service charges in excess of the minimum will be the occurrence of any of the following:

Delivery of incomplete information, instructions, and late delivery of information.

"Change-of-mind" redrafts of one or more of the documents. Changes made due to our misinterpretation of your instructions or a drafting error will be made at no additional charge.

"House call" or out-of-office conference with Client.

Any service, including a scheduled service, which continues beyond the term of this contract.

Retainer. You agree to deposit with us a minimum retainer equal to the amount of the initial court costs upon engaging this firm and executing this Contract. We will bill against this retainer as time and expenses accrue. When this retainer is depleted you agree to place


additional funds on deposit with this firm if requested. Otherwise you will be billed for all legal services as stated above.

BILLING.Statements for fees and expenses will be delivered to you either in person, electronically (e-mail or facsimile), or by U.S. Mail and will be due upon receipt unless you have made some other arrangement with our firm. Unless you inform us otherwise, your statements will be delivered to you by e-mail. If you have more than one e-mail address, you will need to inform us of the e-mail address you prefer for your billing. If you do not have an e-mail address, your statements will be delivered to you either in person, by facsimile, or by U.S. Mail.

You may pay your bill by cash, check, Visa, or MasterCard. We do not accept any other credit cards. If you would prefer that we automatically charge your bill to your Visa or MasterCard, please fill out and sign the authorization on the last page of this Contract (before the addendums), and we will automatically charge the amount owing on the bill to your credit card no sooner than the fifth (5th) day following the day the electronic bill is sent by e-mail or facsimile or the paper bill is mailed.

COMMUNICATIONDuring the term of this engagement, we will attempt to be reasonably available to you. We are handling a number of clients and because of previous engagements, personal days, and matters unforeseen, we will sometimes not be immediately available to respond to your phone, electronic, or written communication. It is our policy that all client communication be returned as promptly as possible. Our firm has a voice-mail system for each attorney and staff member, and we urge you to leave a detailed message if you cannot reach your desired party directly. This will assist us in more quickly responding to you with an answer to any question you might have. If the desired attorney is unavailable, a staff member may often be of assistance. In addition, you may communicate with us by U.S. Postal Service, facsimile, or e-mail. We will provide draft copies of documents as they are prepared, and, whenever appropriate, we will also provide status reports in any of several different mediums. Open communication promotes a better working relationship and quicker completion of the work for which we have been engaged.

DISCLOSURE OF TYPES OF COMMUNICATION USED BY OUR FIRM: Although the use of communication technology such as cordless phones, cellular phones, e-mails, facsimiles, or communication through our website help us to communicate better and faster with you, there is an increased possibility that information transmitted over these various medium may be intercepted by an unauthorized third party or accidentally disseminated to an unauthorized third party, which compromises the attorney-client privilege between you and our firm. By your signature to this Contract, you expressly authorize the use of all forms of communication as described above. If because of the sensitivity of the information to be communicated to our firm you desire that one or more of the above described means of communication not be utilized by our firm with you, you agree that you will contact our firm and give the firm specific written instructions restricting or specifying the types of communications to be utilized between you and our firm.


TERMINATION OF THE CONTRACT BEFORE PROBATE OR GUARDIANSHIP IS TERMINATED.

Any party to this contract, Client or Attorney, has the right to terminate this contract at any time. If terminated by the Client or Attorney before the probate or guardianship is terminated, Client will be obligated to pay the cost of legal services provided to date of termination. The cost of legal services will be based on the hourly rate of compensation previously described. The cost will include reasonable time and costs required to deliver to Client all original Client information in the Attorney's possession. We reserve the right to withdraw and terminate employment if any of the following occurs:

if a conflict of interest develops;

if invoices for services and costs are not paid within a reasonable time after delivery; or

if frustration of purpose if we deliver notice of an impediment which materially affects the service we are to provide and if the impediment is not resolved within a reasonable time after delivery of notice.

CONDITIONS OF SERVICE, DISCLOSURES.

We Represent Only the Client. In beginning and completing your work, we will assume that the family and financial information you provide is complete and correct. Those listed as "Client" will be our only clients. We do not assume the representation of any person, family member, or business organization not listed above as "Client." And before entering into this engagement, we reserve the right to obtain waivers of any potential conflict from parties not listed as "Client" who may be affected by this transaction. We will not disclose any information to anyone other than to a client except as specifically permitted by you or as otherwise authorized in order to fulfill our representation. We reserve the right to refuse disclosure of confidential and privileged information under any condition or circumstances. If you become incapacitated, you agree that we may, but are not required to, disclose certain information to your immediate family members or your legal representatives.

Thorough Review of All Documents. It is not uncommon for persons to sign documents without thoroughly reading or understanding what they have signed. This cannot be permitted in this engagement.

Client's Duties. In signing the contract, each person identified as Client promises:

to read the documents;

to ask questions when in doubt as to the meaning of any document or term; and

not to sign the documents until he or she understands the documents.

Client Must Thoroughly Review All Documents. No attorney is error-proof. Your thorough review of the probate or guardianship documents is important. Your


thorough review will also insure that we have properly recorded family information. Any changes made due to our error will be made without cost to you.

If the Client is More than One Person. If the identified Client is more than one person:

Multi-Party Representation. Each is advised, as recommended by the Texas Code of Professional Responsibility, of the hazards of multi-party representation by one attorney. An attorney is required to be impartial, loyal, and to exercise independent judgment with regard to the client group as a whole. An attorney may not promote the interest of any one member of a group to the disadvantage of another in the group of clients. An attorney may act as the common representative for more than one person in a common enterprise for so long as their interests do not differ or potentially differ. If some later dispute arises between you as to the subject of the proposed representation, we would be unable to represent either of you without the permission of the other.

Separate and Independent counsel. Each separate client is advised to obtain the service of independent legal counsel to insure that the client's interests are best protected. Obtaining independent representation, however, could result in increased attorneys fees and expenses.

Client's Duty to Report Conflicts. Each Client has the affirmative duty to the Attorney to report any fact or circumstance which may affect the Attorney's impartial representation of all those identified as Client; and any fact or circumstance which indicates that the Client's interest is in conflict with another.

Conduct to Be Fair and Open. You agree to discuss any issues that may arise with respect to the preparation and execution of any documents in good faith. You agree that your conduct at all times will be fair and open with one another and with us.

Complete and Free Disclosure. You each agree that there will be complete and free disclosure and exchange of all information that we receive from you during our representation. This information will not be confidential as to each of the Clients. With common clients, communications relevant to a matter of common interest between the common clients is not protected by privilege.

Jointly and Severally Liable. You agree to be jointly and severally liable for the payment of the fees set out in this contract and guarantee payment according to the terms of this contract.

Disclosure Notice. PURSUANT TO THE GRAMM-LEACH-BLILEY ACT, PUBLIC LAW NUMBER 106-102, AND THE RULE ISSUED BY THE FEDERAL TRADE COMMISSION REGARDING THE PRIVACY OF CONSUMER FINANCIAL INFORMATION, 16 CODE OF FEDERAL REGULATIONS PART 313, LAW FIRMS WHICH PROVIDE


TAX PREPARATION AND TAX PLANNING SERVICES TO THEIR CLIENTS ARE CATEGORIZED AS FINANCIAL SERVICE PROVIDERS AND REQUIRED TO PROVIDE WRITTEN NOTICES TO CERTAIN CLIENTS REGARDING DISCLOSURE OF NON-PUBLIC PERSONAL INFORMATION. AS YOUR ATTORNEYS, WE COLLECT NON-PUBLIC INFORMATION ABOUT YOU FROM YOU, AND WITH YOUR AUTHORIZATION, FROM THIRD PARTIES SUCH AS ACCOUNTANTS, FINANCIAL ADVISORS, INSURANCE AGENTS, BANKING INSTITUTIONS, AND OTHER ADVISORS. WE DO NOT DISCLOSE ANY NON-PUBLIC PERSONAL INFORMATION ABOUT OUR CLIENTS OR FORMER CLIENTS TO ANYONE EXCEPT AS PERMITTED BY LAW, OR AS AUTHORIZED BY THAT CLIENT. IF WE ARE AUTHORIZED BY YOU, WE MAY DISCLOSE NON-PUBLIC PERSONAL INFORMATION TO UNRELATED THIRD PARTIES. SUCH UNRELATED THIRD PARTIES WOULD INCLUDE ACCOUNTANTS, FINANCIAL ADVISORS, INSURANCE AGENTS, OR GOVERNMENT AUTHORITIES IN CONNECTION WITH ANY TAX RETURNS PREPARED BY US OR TAX PLANNING. WE RESTRICT ACCESS TO NON-PUBLIC PERSONAL INFORMATION ABOUT YOU TO THOSE EMPLOYEES OF OUR LAW FIRM WHO NEED TO KNOW THE INFORMATION IN ORDER TO PROVIDE LEGAL SERVICES TO YOU. WE MAINTAIN PHYSICAL, ELECTRONIC, AND PROCEDURAL SAFEGUARDS THAT COMPLY WITH FEDERAL REGULATIONS AND OUR RULES OF ETHICS TO GUARD YOUR NON-PUBLIC PERSONAL INFORMATION.

OPINION OF INDEPENDENT LEGAL COUNSEL. Any attorney's service to a client should always be structured so that the attorney has no interest, other than the client's interest, in the outcome of any procedure or recommendation. This engagement contract is the only exception to that rule. The contract is technical. The contract will govern our relationship. It is important that you resolve any question you may have before you sign this contract. If in doubt, we recommend that you seek the opinion of a qualified attorney or other trusted advisor.

THE TEXAS LAWYER'S CREED. A copy of The Texas Lawyer's Creed -- A Mandate for Professionalism is attached. It establishes the standards of professionalism for the legal profession. Some of its provisions may not be applicable to this situation. We pledge that the legal services we render will be in accordance with The Texas Lawyer's Creed -- A Mandate for Professionalism to the extent the provisions are applicable.

REPRESENTATION.

Subsequent Representation. We look forward to representing you. You should, however, understand that, after termination of this matter and any other matters in which we are representing you, this representation will not preclude our subsequent representation in other matters which may be adverse to you.


Adverse Representation. You agree that we reserve the right to continue representing existing or new clients in any matter that is not substantially related to our work for you even if the interests of those clients in other matters are adverse to you.

LAW CHANGES. Changes will likely occur in tax, property, probate, guardianship, and other laws that could impact the probate or guardianship matter. We cannot review the file of each client to determine the impact of court cases, rulings, and other changes in the law. You are advised to keep detailed records of your basis in order to avoid potential problems if the Economic Growth and Tax Relief Reconciliation Act of 2001 is still in effect upon a beneficiary’s death. Rather than have your personal representative to have to grapple with these problems, you should determine the adjusted basis and the date that each of your assets were acquired.

CLIENT WILL RETAIN ORIGINAL DOCUMENTS. All probate or guardianship documents not filed with the Court, upon execution and after copying, will be delivered to the client. Upon receipt by you of those documents, you need to keep all documents in a safe and secure place.

FILE RETENTION BY THE ATTORNEY. We will keep the file relating to this transaction for five years from the termination of this contract, after which time the file may be destroyed. You agree to request from the Attorney in writing any documents of which you may want copies before the end of the five-year period.

BEFORE YOU SIGN THIS CONTRACT. Any question or doubt you may have about this contract should be resolved before you sign. This contract is the only time when the interest of our law firm may be in conflict with your own. It is always a prudent practice to seek the advice and counsel of another attorney as to your rights under this contract. You will never offend us, or jeopardize our relationship, in seeking a review of our work and a second opinion from qualified legal and tax counsel. This will be true at any time during our working relationship.

ACCEPTANCE OF THIS CONTRACT. Your acceptance of this engagement contract will indicate that you have read and agree to the terms stated in the contract. Each person or organization identified as Client must communicate a written acceptance of this contract. Delivery and acceptance may be by regular mail or facsimile delivered electronically. An instrument delivered by electronic facsimile will be considered to be an original.

DATED AND EFFECTIVE:

ATTORNEY:Baird, Crews, Schiller & Whitaker, P.C.

By: _______________________________ (Printed Name of Attorney) (Signature of Attorney)


CLIENT:

______________________________________Printed Name of Client



______________________________________Client Signature




CREDIT CARD AUTHORIZATION

I authorize Baird, Crews, Schiller & Whitaker, P.C. (“Firm”) to charge all amounts owed by me to the Firm to my (circle one) MasterCard / Visa card #_________________________________, which has an expiration date of _____________________. The name on my card is _____________________________. It is my understanding that the amount owed will be charged to my account no sooner than the 5th day following the date the bill was transmitted as provided in this Contract. If there any questions, I can be reached at the following daytime phone number: _________________________.

_____________________________________Signature


SCHEDULE OF SERVICES

SCHEDULE OF WORK TO BE INCLUDED IN THE CONTRACT FOR PROFESSIONAL SERVICES

The following schedule identifies the specific services to be provided by BAIRD, CREWS, SCHILLER & WHITAKER, P.C.

A mark "Yes" will indicate that a described service is to be included in your contract. The term "BHR" identifies that a particular service is provided on an hourly rate of compensation. The term "Included" shows the service is included without additional charge.

Unless otherwise indicated, all recorded values are in U.S. dollars.

Probate Fees

Included(Yes/No)

Description Number Typical Cost Estimated

Independent Administration – Nontaxable Estate (If no complications; waivers are signed by heirs; and there are no mineral interests)

$2,000

Independent Administration – Taxable Estate (without complication)

*Due to the nature of this estate, it will be billed at the hourly rate

$4,000 BHR*

Dependent Administration $5,000

Muniment of Title $1,000

Living Trust after Death of a Settlor (without complications)

$3,000

Guardianship Fees

Uncontested $2,500

Contested $5,000

Application to Sell Property $500

Annual Accounting $500

Annual Certification $350

Other Services

Included(Yes)

Description Number Typical Cost Estimated

706 Estate Tax Return BHR


TOTAL ESTIMATE

Travel, Time and CostTravel consumes working time, time which we would otherwise use to produce income for our law firm. We charge for this time. Travel time will be billed at the applicable hourly rate, with a day rate cap. For travel time which involves part of a day, travel time after 5 P.M. will be charged at ½ of the applicable hourly rate. We charge for the cost of travel (automobile, air travel, and taxi), lodging, and meals.

Associated CostsIf not specifically outlined above, documents necessary to transfer property (such as deeds, assignments, and transfers) will be priced separately. Filing fees to county clerks and the Secretary of State, court costs, and out-of-pocket expenses are additional costs to client.


THE TEXAS LAWYER'S CREED -- A MANDATE FOR PROFESSIONALISM

I am a lawyer. I am entrusted by the People of Texas to preserve and improve our legal system. I am licensed by the Supreme Court of Texas. I must

therefore abide by the Texas Disciplinary Rules of Professional Conduct, but I know that Professionalism requires more than merely avoiding the violation of laws

and rules. I am committed to this Creed for no other reason than it is right.

I. OUR LEGAL SYSTEM

A lawyer owes to the administration of justice personal dignity, integrity, and independence. A lawyer should always adhere to the highest principles of

professionalism.

1. I am passionately proud of my profession. Therefore, "My word is my bond."

2. I am responsible to assure that all persons have access to competent representation regardless of wealth or position in life.

3. I commit myself to an adequate and effective pro bono program.

4. I am obligated to educate my clients, the public, and other lawyers regarding the spirit and letter of this Creed.

5. I will always be conscious of my duty to the judicial system.

II. LAWYER TO CLIENT

A lawyer owes to a client allegiance, learning, skill, and industry. A lawyer shall employ all appropriate legal means to protect and advance the client's

legitimate rights, claims, and objectives. A lawyer shall not be deterred by any real or imagined fear of judicial disfavor or public unpopularity, nor be influenced by

mere self-interest.

1. I will advise my client of the contests of this Creed when undertaking representation.

2. I will endeavor to achieve my client's lawful objectives in legal transactions and in litigation as quickly and economically as possible.

3. I will be loyal and committed to my client's lawful objectives, but I will not permit that loyalty and commitment to interfere with my duty to provide

objective and independent advice.

4. I will advise my client that civility and courtesy are expected and are not a sign of weakness.

5. I will advise my client of proper and expected behavior.

6. I will treat adverse parties and witnesses with fairness and due consideration. A client has no right to demand that I abuse anyone or indulge in any

offensive conduct.

7. I will advise my client that we will not pursue conduct which is intended primarily to harass or drain the financial resources of the opposing party.

8. I will advise my client that we will not pursue tactics which are intended primarily for delay.

9. I will advise my client that we will not pursue any course of action which is without merit.

10. I will advise my client that I reserve the right to determine whether to grant accommodations to opposing counsel in all matters that do not adversely

affect my client's lawful objectives. A client has no right to instruct me to refuse reasonable requests made by other counsel.

11. I will advise my client regarding the availability of mediation, arbitration, and other alternative methods of resolving and settling disputes.

III. LAWYER TO LAWYER

A lawyer owes to opposing counsel, in the conduct of legal transactions and the pursuit of litigation, courtesy, candor, cooperation, and scrupulous

observance of all agreements and mutual understandings. Ill feelings between clients shall not influence a lawyer's conduct, attitude, or demeanor toward opposing

counsel. A lawyer shall not engage in unprofessional conduct in retaliation against other unprofessional conduct.

1. I will be courteous, civil, and prompt in oral and written communications.

2. I will not quarrel over matters of form or style, but I will concentrate on matters of substance.


3. I will identify for other counsel or parties all changes I have made in documents submitted for review.

4. I will attempt to prepare documents which correctly reflect the agreement of the parties. I will not include provisions which have not been agreed

upon or omit provisions which are necessary to reflect the agreement of the parties.

5. I will notify opposing counsel, and, if appropriate, the Court or other persons, as soon as practicable, when hearings, depositions, meetings,

conferences or closings are canceled.

6. I will agree to reasonable requests for extensions of time and for waiver of procedural formalities, provided legitimate objectives of my client will not

be adversely affected.

7. I will not serve motions or pleadings in any manner that unfairly limits another party's opportunity to respond.

8. I will attempt to resolve by agreement my objections to matters contained in pleadings and discovery requests and responses.

9. I can disagree without being disagreeable. I recognize that effective representation does not require antagonistic or obnoxious behavior. I will

neither encourage nor knowingly permit my client or anyone under my control to do anything which would be unethical or improper if done by me.

10. I will not, without good cause, attribute bad motives or unethical conduct to opposing counsel nor bring the profession into disrepute by unfounded

accusations of impropriety. I will avoid disparaging personal remarks or acrimony towards opposing counsel, parties and witnesses. I will not be influenced by any ill

feeling between clients. I will abstain from any allusion to personal peculiarities or idiosyncrasies of opposing counsel.

11. I will not take advantage, by causing any default or dismissal to be rendered, when I know the identity of an opposing counsel, without first

inquiring about that counsel's intention to proceed.

12. I will promptly submit orders to the Court. I will deliver copies to opposing counsel before or contemporaneously with submission to the Court. I

will promptly approve the form of orders which accurately reflect the substance of the rulings of the Court.

13. I will not attempt to gain an unfair advantage by sending the Court or its staff correspondence or copies of correspondence.

14. I will not arbitrarily schedule a deposition, Court appearance, or hearing until a good faith effort has been made to schedule it by agreement.

15. I will readily stipulate to undisputed facts in order to avoid needless costs or inconvenience for any party.

16. I will refrain from excessive and abusive discovery.

17. I will comply with all reasonable discovery requests. I will not resist discovery requests which are not objectionable. I will not make objections nor

give instructions to a witness for the purpose of delaying or obstructing the discovery process. I will encourage witnesses to respond to all deposition questions

which are reasonably understandable. I will neither encourage nor permit my witness to quibble about words where their meaning is reasonably clear.

18. I will not seek Court intervention to obtain discovery which is clearly improper and not discoverable.

19. I will not seek sanctions or disqualification unless it is necessary for protection of my client's lawful objectives or is fully justified by the

circumstances.

IV. LAWYER AND JUDGE

Lawyers and judges owe each other respect, diligence, candor, punctuality, and protection against unjust and improper criticism and attack. Lawyers

and judges are equally responsible to protect the dignity and independence of the Court and the profession.

1. I will always recognize that the position of judge is the symbol of both the judicial system and administration of justice. I will refrain from conduct

that degrades this symbol.

2. I will conduct myself in Court in a professional manner and demonstrate my respect for the Court and the law.

3. I will treat counsel, opposing parties, the Court, and members of the Court staff with courtesy and civility.

4. I will be punctual.

5. I will not engage in any conduct which offends the dignity and decorum of proceedings.

6. I will not knowingly misrepresent, mischaracterize, misquote or miscite facts or authorities to gain an advantage.

7. I will respect the rulings of the Court.

8. I will give the issues in controversy deliberate, impartial and studied analysis and consideration.

9. I will be considerate of the time constraints and pressures imposed upon the Court, Court staff and counsel in efforts to administer justice and resolve

disputes.


254-774-8333254-774-9353 (fax) www.bcswlaw.com

GETTING STARTED WITH ADMINISTRATION OF ESTATE

A good friend or a member of your family is having a Will drawn up, and asks you whether you would be willing to act as the executor. You feel honored by this request, and you give your consent. Or perhaps someone close to you has passed away, and the time has come to assume your duties as executor. You may be wondering exactly what the extent of your obligations will be, how much time your duties may demand, and where to go for help in fulfilling this important role. This issue of Estate Planning Today focuses on a number of practical things to do, and not do, when a loved one passes away and you are named as the executor.

Common Misconceptions

There are many misconceptions about the legal and financial consequences of someone's death. These myths are often perpetuated by well meaning friends who are truly trying to give practical advice. Unfortunately, a lot of misinformation is often provided. To set the record straight, please remember:

● Bank accounts are not frozen in Texas. Any person who could sign on the account prior to the account owner's death will continue to have access to the funds on deposit after the owner's death.

● Safe-deposit boxes are not sealed in Texas. No court order or tax permit is required to open a decedent's safe-deposit box, so long as someone on the signature card for the box is still living. Any person who could sign to open the box prior to the box holder's death will continue to have access to the safe-deposit box after his or her death.

● Certificates of deposit can be withdrawn without penalty upon the death of the person who owns them (the early withdrawal penalty does not apply). You are not required to liquidate a C.D., but you may do so without penalty if you choose to do so.

● "Probate" is not typically time consuming or expensive. Most people who die with a Will prepared in Texas have opted for "independent" administration, which is relatively quick and inexpensive.

● Lawyers are not entitled by law to 5% (or any other fixed percentage) of the estate for their services in Texas. Instead, most lawyers charge fees based upon

the time involved and the complexity of the matter. Your lawyer should be able to give you an estimate of what you can expect in legal fees before any work is performed. The same is true for accountants, financial planners, and other professionals whom you might engage to assist you with handling your duties as executor.

First Steps

Anatomical Gifts. The family should immediately contact the hospital or organ bank, if they want to make anatomical gifts. If the decedent named a specific organization in a Donor Card to receive an organ or tissue donation, contact that organization.

Funeral arrangements. Funeral arrangements are generally made by the surviving spouse, children, or other family members rather than by the executor as such. The decedent’s wishes should be respected if they are known, but do not have to be carried out if they are unreasonable or financially burdensome.

Contact Family and Friends. Naturally, immediate family, friends and relatives should be contacted as soon as possible. It may be appropriate to wait until after funeral arrangements have been made before calling people other than members of the immediate family and close friends. That way, a second phone call won't need to be made to give them information about the funeral. The family shouldn't hesitate to ask people to make calls for them. Most people will welcome the opportunity to be helpful.

Death Certificates. The funeral home usually collects the information to order death certificates, and will ask how many to order. You will probably need one original for each bank account, brokerage account, life insurance policy, retirement plan, and vehicle of the decedent. It is not unusual to start with ten or twenty. Additional certificates can be ordered later if necessary. It is critically important that the information given to complete the death certificate be 100% accurate. Double check the spelling of each name, as well as the date of death and social security number of the decedent. Errors found after the certificates are issued can take four to six months to correct.

Other Important Calls. You can wait a few days before calling these other people and places:

● Estate & Probate Lawyer. A lawyer experienced in probating estates and handling estate tax matters.

● Decedent’s Current Employer. The personnel department of the decedent's current employer and any former employers that had retirement plans. You should ask about any wages, vacation pay, sick leave pay and the like, and request claim forms for any death benefits payable (e.g., life insurance policy proceeds, or the death benefits from a retirement plan).

● The Social Security Administration. If the decedent was receiving Social Security, the funeral home will generally notify them to stop future benefits. However, if the decedent left a surviving spouse or dependent children, Social

Getting Started with Administration of Estate 2

Security should be contacted. They can help determine the continuing benefits to which the spouse and children are entitled.

● The Veterans Administration, if the decedent was a veteran. The VA can provide help with paying funeral and burial expenses. The decedent's spouse and children may also be entitled to monthly benefits.

● The family's insurance agent, who can provide the forms needed to collect life insurance proceeds.

Other people and places should be called within the first month or so following death:

● Credit card companies. Credit cards issued solely in the decedent's name should be destroyed. The decedent's spouse may continue using credit cards that both spouses were authorized to use. Check to see if the decedent purchased credit card insurance. If so, the outstanding balance will be canceled at death.

● Utility companies. If bills were addressed to the decedent, you may want to tell the companies to change their billing. The surviving spouse may or may not want to change the telephone billing and listing. Many women do not want it known that they are living alone. (Some people recommend that women use the first letter of their first name in their telephone listing, but use of the first letter has become a signal that the person listed is a woman.)

● College financial aid office, if the decedent had children in college. Because of their parent's death, the children may qualify for financial aid (or additional financial aid).

What Not To Do

When someone passes away, there is a very important post-death estate planning device called a "qualified disclaimer" that is often employed. Frequently, the goal of a disclaimer is to maximize the estate tax savings of the trusts created in the Will of the first spouse to die. In other situations, disclaimers are used to shift assets to other beneficiaries, or to "repair" tax or other potential problems with a Will or estate plan.

Here's the catch: In order for the disclaimer to qualify, the estate beneficiary must not have accepted the disclaimed assets. For example, if the surviving spouse files a claim with a life insurance company, receives a check, and deposits it in his or her account, then the surviving spouse has accepted the proceeds and the disclaimer option for that insurance is lost. Likewise, if the surviving spouse does a "spousal IRA rollover" of the deceased spouse's retirement funds or IRA into a new IRA in his or her name, the spouse has effectively accepted these funds and the disclaimer option is again precluded. As these examples illustrate, before changing title on an account, before applying for insurance benefits, and before making an IRA rollover, the family should contact us or other qualified advisors to discuss the tax and other issues involved in these decisions. Any slight delay that may result from analyzing these issues may be offset by saving countless hours and thousands of dollars down the road. There is no harm in gathering up claim


forms for life insurance, retirement benefits, and the like. But you should not change the title on any assets, file claim forms (unless the benefits are of a very modest value), roll over retirement plans or IRAs, or otherwise sign documents that might preclude the disclaimer option before you have had an opportunity to speak with us or another qualified advisor.

Probating The Will

If the decedent left a Will, it generally will need to be filed with the Probate Court. Texas offers a number of different types of probate and alternatives to probate. After meeting with you to discuss the estate, we can help you determine which steps are most appropriate for you. In most cases, the Will is filed with the Probate Court within a few weeks after death. (Texas law generally requires that, if an executor is to be appointed, the Will must be filed within four years of the date of death.)

Probate and Non-Probate Assets. Not all property will "pass through probate" to the person named in the Will. The following types of property pass automatically to a designated beneficiary by contract or by operation of law, regardless of whether the recipient is named in a Will:

● Property owned as joint tenants with rights of survivorship.

● Funds on deposit in a financial institution in the decedent's name, marked "payable on death," "P.O.D." or "T.O.D." to a named beneficiary, or "trustee" for a named beneficiary.

● Life insurance proceeds, IRAs, and other retirement plan benefits (unless the beneficiary designation names the insured's estate, or all named beneficiaries have died).

● Property held in a trust established during the decedent's lifetime (including a "living" or "revocable" trust).

● U.S. savings bonds that are co-owned.

Sometimes non-probate assets pass to a recipient in a way that does not match the decedent's tax and estate planning objectives. This problem can often be mitigated by the disclaimer planning discussed above if undertaken prior to the recipient collecting the assets.

What Happens During Probate?

Probate starts with a brief hearing at the courthouse at which the judge legally approves the Will and authorizes the executor named in it to act. This authorization is evidenced by official "Letters Testamentary" issued by the court clerk. The executor must give notice of his or her appointment to the decedent's creditors, and the creditors are given time to file a claim. After the claims period has ended, the executor may pay the creditors. If the executor is certain that ample sums are available to pay all creditors, claims can begin to be paid prior to the end of the notice period. The last formal step in the probate process is the filing of an inventory of the decedent's assets with the Probate Court. The inventory contains a detailed description and value of all


probate assets owned at the date of death. The inventory is normally due 90 days after an executor is appointed, but the court will grant additional time if it is necessary. If an estate tax return must be filed, the deadline for filing the inventory is often extended to coordinate it with the due date for the estate tax return, since the inventory and estate tax return contain similar information. It usually takes four or five months to complete the probate process if the Will appoints an "independent" executor. If no independent executor is named, or if the estate is required to file an estate tax return, it may take a year or two before the estate administration process is complete. Occasionally, the administration process may take even longer, especially if the holdings of the estate are large and complex, or if the validity of the Will is contested. In most cases, the beneficiaries do not have to wait for the administration process to be completed to receive distributions from the estate. Assets can be distributed during the estate administration so long as no creditors are injured as a result. However, if estate taxes are due, the executor may be held personally liable for the taxes unless enough estate assets are retained to pay all of the taxes. You should discuss the timing and amount of distributions with us prior to transferring funds from the estate.

Tax Matters

Various tax forms may have to be filed by the executor. A federal estate tax return will have to be filed if the value of the gross estate (including both probate and non-probate assets), plus the amount of taxable gifts made by the decedent during his or her lifetime, exceeds $1,000,000. This threshold increases to $1,500,000 for people dying in 2004 or 2005. This threshold increases again to $2,000,000 for people dying in 2006 through 2008. In 2009, this threshold increases to $3,500,000 and is unlimited in 2010. In 2011, the threshold reverts back to $1,000,000. If a federal estate tax return is required, a one-page Texas inheritance tax return must also be filed. If the decedent owned real estate in other states, inheritance tax returns (and perhaps additional probate proceedings) may be required for those states as well. We can assist you in preparing these forms. The information required to complete these returns is rather extensive. You will probably be required to provide copies of bank and brokerage statements, deeds, car titles, and other information and documents. Although the list of required items is fairly long, you will have ample time to gather this information. The estate and inheritance tax returns are not due until nine months after the date of death. Do not feel that you must gather all of the information for the first meeting with your lawyer. Federal income tax returns will have to be filed not only for the year the decedent died but also for the year before if he or she died before filing a return for that year. For example, if the decedent died in February 2001 before filing his or her 2000 return (due April 15, 2001), the executor would have to file income tax returns for both 2000 and 2001. Surviving spouses are entitled to file a joint return with their spouse for the year of death, unless they remarry before the end of the year. Federal income tax returns may also have to be filed for the estate (depending on how much income is earned before the estate is settled) because it is treated as a separate tax entity. If the Will establishes any trusts, the trustee may have to file federal income tax returns for trust income. Frequently, a qualified CPA is retained to help in filing these income tax returns.

Distributing The Estate

After all taxes have been paid, the estate may be fully distributed. If the decedent's Will creates trusts, a decision will need to be made as to which assets will be used to fund each trust. If the


estate involves multiple beneficiaries, the executor may need to decide how to allocate assets among them. Funding decisions can involve a unique combination of tax, financial and emotional issues. It is very important that you discuss these issues with your professional advisors. You and your lawyer need to take proper steps to document the formal funding of the trusts or other estate distributions to prevent serious problems down the road.

Grief And Decision Making

Grief and Decision Making It is often very difficult for family members to make decisions after someone's death. Most surviving spouses and children have trouble concentrating, feel disoriented and despairing, and may be overwhelmed by problems or decisions that would, under other circumstances, seem straight-forward. This difficulty may continue for many weeks. Well meaning friends and family often offer advice – Why don't you sell your home? You don't need all that room. You'd better get a job. You should move closer to your children/friends/relatives. You should go back to school. You should pay off your mortgage with your insurance proceeds. You should invest in the stock market. Because grieving people have trouble concentrating, their judgment can sometimes be clouded. It is often wise to defer making major decisions, particularly decisions that cannot be changed, for several months after the death of a loved one. Fortunately, most significant decisions regarding legal and financial matters can be postponed for awhile. If a major decision has to be made, you can turn for help to trusted friends and family members who are not as emotionally affected by the death and who can give you sound, objective advice. You should not hesitate to consult experts for a thorough analysis of important decisions.

Contact Us

Naturally, each estate is unique, and this brief overview should not be treated as a substitute for legal advice. Please feel free to contact one of our attorneys with any specific questions.



INSTRUCTIONS AND DUTIES OF INDEPENDENT EXECUTOR

The information contained in this memo is designed to enable you to more fully appreciate the office you now hold and to provide you with guidance to assist you in carrying out your responsibilities. I am sure that you will find it to be interesting and informative.

First of all, you should be aware of the meaning of the terms "Executor" and "Executrix". An "Executor" is the person appointed in the will of the Decedent to carry out the desires of the Decedent as expressed in that will and to administer the estate of the Decedent. An "Executrix" is the feminine gender of that word. I will use the term "Executor" throughout the remainder of this memo, but you should realize that the word "Executrix" can be freely interchanged.

The word "Independent" means that the Executor may act independently of control by the Court except with respect to those matters that have already transpired, and for the filing of the required Inventory, Appraisement, and List of Claims. Without having been categorized as "Independent", virtually all of your duties and actions would be subject to prior approval by the Court since a mere Executor is required to obtain advance approval for virtually every action. This is obviously a cumbersome and expensive process, and since you are an Independent Executor, we will not need to seek Court approval for your actions.

The first step in the administration of a decedent's estate is to have the Will admitted to probate and to have an executor appointed to represent the estate. This requires the filing of a written application with the probate court in the county where decedent resided at the time of death, followed by an informal hearing before the probate Judge. A number of other documents must also be prepared and submitted to the Court in connection with the hearing. We will complete these steps and secure your appointment as Independent Executor.

The Order admitting Decedent's Will to probate for this estate will be signed by the Judge in the near future, at which time, you will qualify as Independent Executor of this Estate by the filing of your Oath. This also entitles you to receive Letters Testamentary. You are not qualified to act for this estate until you have taken the oath of office and filed any required bond, if any. Your oath, if not taken at the hearing, should be taken no later than 20 days from the date of the order making your appointment. Generally a bond is not required for an Independent Executor named in a Will. In the event a bond is required by the Will or the Court, it should be approved by the Court no later than 20 days from the date of the Order making your appointment. Your bond, if required, will have to be executed by an authorized corporate surety and the amount will be that as specified in the order making the appointment.

These Letters represent evidence of your appointment and give you the full authority to act for and on behalf of the estate. All Letters show the date on which they were issued and are valid for only 60 days from that date. Do not worry if they expire before they are used since for a modest charge, we can obtain additional Letters at any time during the administration. As you need additional Letters, please contact my office.

In your capacity as Independent Executor, you are the Decedent's representative for the purposes of terminating the Decedent's affairs. This is called "administration" and requires you to:

locate, identify, collect, and assist in the valuation of Decedent's assets;

prepare an Inventory listing those assets;

locate and identify creditors and pay debts, expenses of administration, and taxes;

prepare and file all final income and/or estate tax returns; and

distribute the remaining assets to those beneficiaries named in Decedent's Will.

In discharging your duties, keep in mind that you are a fiduciary and that you have a duty to deal fairly with the creditors, heirs, and beneficiaries of this estate and to carefully manage the estate. Do not commingle Decedent's assets with your own without my knowledge and direction. Your first duty should be to take possession of Decedent's assets, valuable papers, and records and safeguard Decedent's property. In opening and maintaining bank accounts and certificates of deposit for this estate, be sure that the total estate funds at any one institution do not exceed the amount insured by the FDIC.

Filing your Oath sets several deadlines in motion. Within one month from the date you qualify as Independent Executor, you are required to give notice of your appointment to the general creditors of the estate. This notice must be published once in a newspaper of general circulation in the county where the decedent resided. We will have this notice published for you and will arrange to file a copy of the published notice with the probate court. Claims of creditors against the estate may be presented to you at any time while the estate remains open. You may allow any claim which you believe to be a just debt of the estate and is properly presented to you and authenticated, provided such claim is not barred by an applicable statute of limitation. Once a claim is presented to you, you should either allow or disallow it. If it is rejected, the creditor will have to file suit to secure payment of the claim.Within two months after you qualify as Independent Executor, you are required to give notice by certified or registered mail to each creditor having an outstanding claim for money against the estate that is secured by real or personal property. If there are any creditors who held claims for money against the decedent at the time of death, you will need to prepare a list that includes the names and addresses of these creditors so that the required creditors' notices can be mailed. We will work with you to prepare and mail the necessary notices.

Unless an extension of time is obtained from the local probate court, you will be required to file an Inventory, Appraisement, and List of Claims within 90 days after qualifying as Executor. This document will include proper and complete descriptions and give accurate evaluations of all personal properties and Texas real properties that pass under the decedent’s will, together with

Instructions And Duties Of Independent Executor 2

all claims the decedent held against third persons at the time of death. We may request an extension of time for filing the Inventory so that it can be filed after the federal estate tax return is finalized, if there is one. Please complete the Inventory Form provided to you.

If the decedent was remitting (or should have remitted) taxes to the Texas Comptroller of Public accounts at the time of death, you will be required to notify the Comptroller of your appointment as Independent Executor of the estate. This notice must be given by certified or registered mail within one month after you qualify to serve as Independent Executor of the Estate.

When the value of Decedent's gross estate exceeds the federal applicable exclusion on the date of death, a federal estate tax return must also be filed and estate taxes paid within nine months after the date of death. For purposes of this return, we must value the estate as of the date of death or may be able to use values as of six months from the date of death. This alternate valuation might permit a reduction in taxes. For purposes of these returns, the decedent’s taxable estate will include all of Decedent's separate property plus ½ of the community property plus the value of certain lifetime transfers and other non-probate transfers such as life insurance policies, retirement plan benefits, annuities and property held jointly with right of survivorship. In addition, if the decedent made certain types of gifts during the decedent’s lifetime, these gifts must be taken into account in calculating the estate tax base. If the information we receive indicates that it will be necessary to prepare and file these returns on behalf of the estate, we will work with you to prepare and file these returns and assist you in planning for the payment of any taxes owed by the estate. If an estate tax return (Form 706) is required, please complete the Checklist for Probate Inventory and Federal Estate Return (706) provided to you.

When any federal estate tax or generation-skipping transfer tax return is due, then within nine months after the date of death, we must file an Inheritance Tax Return - Federal Estate Tax Credit and pay any taxes due. When no federal taxes are due, no Texas inheritance tax is due.

The decedent’s final income tax return (Form 1040) covering the period of time between January 1, and the date of the decedent’s death, must also be prepared and filed if Decedent had a certain minimum amount of gross income. As the administration progresses, we will be in a better position to evaluate the need for this return. If one is due, it must be filed and the taxes must be paid on or before April 15 of the year following Decedent's death.

In addition, fiduciary income tax returns for the estate (Form 1041) will be required for all tax years in which the estate’s income exceeds $600. The beginning date of the estate's first tax year is the date of the decedent’s death. The estate's first tax year may end on December 31, or at the end of any other month as long as it does not exceed one year from the date of decedent’s death. If a calendar year is selected, the first income tax return for the estate will be due on April 15 of the year following date of death. Since we do not prepare income tax returns, you will need to contact an accountant or some other qualified person to assist you in preparing these returns.

If this estate will exceed the federal applicable exclusion amount, PLEASE do not transfer any assets to anyone without consulting with me because this could cause you to become personally liable for any taxes owed by the estate.


After all known debts and taxes of Decedent and of decedent's estate have been paid, you may then distribute the remaining assets to the appropriate beneficiaries. I know that you feel a great deal of moral pressure to pay all debts as soon as possible. It will be very helpful to us if you will resist this urge until we have a complete list of those debts and a clear financial picture of the Estate. Please cooperate with us about these debts.

By way of a summary, let me point out that the administration of this estate is an essential and very important process. It clears title to real estate. It settles legitimate debts (and wipes out others). It establishes a new income tax basis for Decedent's property as well as for the community property interest of the surviving spouse. It permits clear title distribution of property to the persons entitled to receive it under the terms of the Will.

Although the probate procedures are fairly straightforward, you will likely experience some delays that will be frustrating. Unfortunately the timing of many of our activities will be in the hands of court personnel, transfer agents, and the Internal Revenue Service.

In light of the work that will be performed in the administration of the estate, we anticipate that we will be performing the following services to assist you in completing the estate administration:

Assisting you in the collection and review of information concerning the identity of the estate assets and their value so that an accurate probate inventory can be prepared and filed for the estate.

Issuing the necessary notices to creditors of the estate.

If necessary, and if requested to do so by you, assisting you in the payment of debts and expenses of the estate.

Assist in preparing, reviewing, and filing a Texas inheritance tax return and federal estate tax return on behalf of the estate, if it is a taxable estate.

If necessary, and if requested to do so by you, assisting you in the sale or distribution of estate assets in Texas, including the preparation of any required transfer instruments to effect the sale or distribution of estate assets, including the funding of any trusts created by decedent’s death.

As the administration of the estate continues, you may decide that it is appropriate to ask our firm to analyze or handle matters that come to your attention other than those listed above. We will be happy to visit with you about these additional matters if and when they arise.

To assist you in properly performing your duties, I will need to obtain a great deal of additional information. And we will need to work together very closely in the coming months. For your records, I will send to you copies of all documents and correspondence as they are prepared. Please contact me if you have any questions concerning this memo, your duties, or the future procedures. You also should feel free to contact my probate staff assistant to furnish additional information or to ask routine questions. We look forward to working closely with you.



PROBATE - FREQUENTLY ASKED QUESTIONS

Q. Who is responsible for handling probate?

A. In most circumstances, the executor named in the will takes this job. If there isn't any will, or the will fails to name an executor, the probate court names someone (called an administrator) to handle the process -- most often the closest capable relative, or the person who inherits the bulk of the deceased person's assets. If no formal probate proceeding is necessary, the court does not appoint an estate administrator.

Q. What is probate?

A. Probate is a legal process that takes place after someone dies. It includes:

· proving in court that a deceased person's will is valid (usually a routine matter)

· identifying and inventorying the deceased person's property

· having the property appraised

· paying debts and taxes, and

· distributing the remaining property as the will directs.

Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person's property.

Probate usually works like this: After your death, the person you named in your will as executor -- or, if you die without a will, the person appointed by a judge -- files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you've left. Then, relatives and creditors are officially notified of your death.

Your executor must find, secure and manage your assets during the probate process, which commonly takes from three months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to

produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.

In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.

Q. What is the effect Probate administration on the income tax basis of property?

A. The probate of estates can be a very simple and streamlined procedure. However, it does require the cooperation of all of the heirs and beneficiaries in valuing the assets of the deceased and accounting for his debts and obligations.

An important result of the probate process is that the heirs and legatees are given an income tax basis in the assets that they receive, according to the value determined in the probate process.

This income tax basis will be the number used for determining gain or loss if an asset is later sold as well as the basis for depreciation, if an asset is used for business.

A Board Certified Estate Planning specialist can assist you with your income tax planning on the assets you receive, as well as advise you as to the applicability of federal estate taxes and state inheritance taxes.

Q. What should an executor do prior to the will being probated?

A. The probate process is often daunting. Having an overall picture of what the process entails, and how steps fit together, will help everyone involved. However, the probate of every estate is unique. Everyone has different assets, debts, record-keeping habits, goals and family. Thus, the following description won't precisely match any probate you may become involved in. But flexibility, keeping in mind the overall picture, and careful use of professional advisers will help any executor complete his or her tasks effectively.

Funeral arrangements. When death occurs, final arrangements--the funeral, ceremony, burial or cremation, and cemetery or other instructions--must be dealt with. Immediate family members generally handle this, but depending on the circumstances, a partner, friends or others may become involved. If you are the executor, your first step is to determine the wishes of the decedent. Most likely, the decedent has communicated these to you and others. In any event, consider all the sources of information so that you can carry out (or help others to carry out) the decedent's wishes:

Letter of instruction. Many people prepare a letter of instruction that addresses many issues, including organ donations, funeral and burial or cremation requests. Try to locate this letter and review it as quickly as possible.

Living will. A copy is often kept in the decedent's physician's records or hospital records. Living wills often include the decedent's wishes for final arrangements.

Probate – Frequently Asked Questions 2

Health care proxy. Some people sign only a living will, others only a health care proxy, some both. If the living will is silent, the health care proxy may include directions as to how to handle funeral and other steps.

Deed for a burial plot. Many people purchase plots in advance. Locating this information can resolve the issue in many cases as to where and to some extent how the decedent's burial or internment should be handled.

Pre-need funeral trust. The decedent may have made arrangements in advance for funeral costs. Review the decedent's letter of instructions and other important papers for this. Ask close friends and family whether they were aware of such arrangements. Call area funeral homes to find out whether any arrangements were made with them.

Will. While a will may list the intent to be an organ donor as well as directions for the funeral and other final arrangements, it is often not available quickly enough. If the decedent's intent cannot be determined from the other sources indicated, attempt to locate the will quickly, or at least a copy. If the will is in the decedent's safe deposit box, expedited procedures are available to get it. Consult with the estate's attorney.

Contact the decedent's religious adviser. If the decedent had any religious affiliations or beliefs (these are sometimes addressed in the living will), request a consultation with the religious adviser concerning the appropriate steps to take for burial, services, mourning and the like. If the family, friends and loved ones have any particular religious affiliation, a religious adviser may provide considerable solace for them.

Consult members of the decedent's family and loved ones. The decedent's wishes must be honored, but often requests and feelings of others can also be respected. It can only serve to lessen tension at such a traumatic time.

Because funeral and related immediate costs must be taken care of promptly, they are often paid for by family or others close to the decedent. The estate reimburses them later. State law will generally provide that the estate must reimburse reasonable funeral expenses. Get copies of all bills, receipts and other documents supporting the expenses you reimburse. If the funeral arrangements were lavish, unusual or expensive, an issue may arise as to what the estate can pay for. The will may provide directions for funeral or other arrangements that could be helpful for you as executor. If there are any disputes among family or others at a later date concerning these arrangements, the directions in the will can support your payment of these costs. If the will is silent and the expenses unusual, consult with an estate attorney before reimbursement to avoid any risk of being personally surcharged.

Emotional considerations. Sensitivity, compassion and caring are the most important characteristics the executor and all others involved initially need to exhibit. No matter how much notice and preparation preceded the death, the decedent's family and loved ones will have strong emotions over their loss. They may react with sorrow, hurt, disappointment or anger. Even the most decisive and organized people can become confused, indecisive and despondent. It is essential to be attuned to these feelings so that you can respond accordingly. If the decedent was


the primary or sole source of support, the survivors will, along with the many personal feelings, be worried about their future financial stability and security.

By handling an estate's affairs in an organized and professional manner, an executor can contribute significantly to helping the survivors move forward.

Q. What documents are needed for probate?

A. Organization is critical for managing any estate. Even for a modest and simple estate, there can be a considerable number of transactions and correspondence. For any estate, there is always the risk that a beneficiary or other person may question your actions. Thus, you should take steps to organize correspondence and other paperwork, keep records of all financial transactions, calendar key deadlines and review checklists to monitor the progress of the estate settlement. This section provides practical tips on addressing these matters.

Assembling the documents. One of the first steps any executor should take is to obtain and review, with legal counsel if necessary, all the pertinent legal documents that may affect the estate. The following is a list of many of these:

Living will, health care proxy. These may provide important information as to burial requests, funeral services and so on.

Powers of attorney. Powers lapse on death. However, if a third party in good faith and without notice of death completed a transaction under the authority of the power of attorney, it may still be valid. If any significant transactions were completed near the time of the decedent's death, you may want to investigate them.

Will. This is usually the primary document governing the estate.

Revocable living trust. If a revocable living trust exists then the trust, in combination with the will, should govern most transactions. Be alert for any issues that may arise because of the use of two documents. They are not always used in the format of a simple pour-over will with everything in the trust.

Letter of instruction. Any personal notes to provide guidance to you as to how the decedent would want you, as executor, and any trustees to handle matters can be quite helpful, even if not legally binding.

Personal property list. Many decedents assemble a listing of how their personal property should be distributed. This is commonly done even if the will is silent. Attempt to locate such a list and follow it to the extent you can. Be cautious; if the list isn't prepared in a manner that makes it legally binding (most are not), then while you may want to carry out the decedent's wishes because of your moral obligation to do so, you must be constrained by the legal provisions of the will.

Insurance trust. A common estate planning technique is to have a trust own insurance on your life (or the joint lives of you and your spouse). On your death (or on the death of the last of you and your spouse in the case of joint life, also called second to die, insurance), the insurance trust


may receive substantial proceeds that may be used to fund loans to the estate or to purchase assets from the estate to provide liquidity. The trust cannot pay the decedent's estate tax directly.

Q. What items should be included on an executor's checklist?

A. The following checklist will assist you in handling an estate, but it isn't all-inclusive. Be certain to review the steps you need to take with the accountant, attorney and other professionals you hire:

1. Verify information on death certificate. If it is not accurate, order corrected certificates.

2. Locate and secure the original will. It must be filed with the surrogate's court with the probate petition.

3. Open an estate checking account and route every transaction through the account to assure records of all transactions are in one place. Also, carefully explain each transaction to facilitate proper categorization and to assist in addressing any questions raised by beneficiaries or an IRS audit.

4. Search the decedent's apartment or house to identify and secure assets.

5. Write all banks and brokerage firms decedent dealt with (not just where there are current accounts) to identify other accounts or assets, safe deposit boxes, margin accounts, debts and so on. Also, obtain date of death values for any assets.

6. Review the wills and any trusts of relatives for powers of appointment in favor of the decedent. These are rights given to the decedent under a will or trust for the decedent to designate in his or her will where the property governed by the other person's will or trust should be distributed. Review the tax consequences of these with the estate's attorney.

7. If an estate tax return may have to be filed, write each broker, bank and so on for the alternate valuation date (six months following the decedent's death) balances to determine whether the estate would be valued lower at the alternate valuation date.

8. Determine accrued interest on any bank accounts, bonds or other interest-paying assets. This is interest earned on the account but not paid to the decedent before death.

9. Contact the Veterans Administration and the Social Security Administration concerning benefit information and to notify them of decedent's death so that future payments will be stopped.

10. Contact decedent's employer (and possibly former employers) for benefit information, severance pay, death benefits, accrued vacation pay and so on.


11. Obtain appraisals for all material assets such as real estate, business interests, jewelry and so on.

12. Maintain insurance on assets during administration. Have all existing coverage reviewed to be certain that it is up to date and that the estate is properly listed as the insured.

13. Invest idle cash balances in a diversified and safe manner that is consistent with the estate's overall investment objectives.

14. Identify and obtain property in hands of bailees (jewelry for repair, clothes for cleaning, etc.). One way to identify these is to scan the decedent's checkbook. Then contact local service and repair businesses to which checks have been written in the past to determine whether they are holding any of the decedent's property.

15. Write charities (see prior Form 1040, Schedule B; review old checkbooks) to identify outstanding pledges.

16. Write closely held businesses for stock subscriptions outstanding and shareholder (operating or partnership) agreements. Review them for any obligations or rights.

17. Write attorneys used by the decedent to request information concerning outstanding claims, litigation and so on.

18. Write any real estate brokers with whom the decedent dealt to determine whether there are any outstanding realty contracts.

19. Verify that the decedent has received any refunds due on prior federal and state income tax returns received. Review the old returns, and/or speak with the decedent's accountant, to identify the refunds. Then review the decedent's checking and other accounts to determine whether a deposit in that amount was made.

20. Verify that any premiums or refunds due on insurance policies were received.

21. Review decedent's records and contact decedent's family to inquire as to any jointly owned property with the decedent.

22. Make an inventory of any of decedent's safe deposit boxes.

23. Inventory assets in any vacation or second home.

24. Inventory any cash on hand. If there is significant cash, have a witness on hand and consider videotaping the counting.

25. Pay funeral and other administrative expenses.


26. Set up ledger of all receipts and related items for every expense.

27. Pay taxes and utilities on all real property.

28. File decedent's final individual income tax returns after carefully reviewing with the CPA being used any elections, special provisions governing a final return, the allocation of expenses between the decedent's final income tax return and estate tax return.

29. Verify whether any reportable gifts were made by the decedent (or the decedent's spouse in which the decedent agreed to gift split) prior to death. Were these reported on gift tax returns filed? Are gift tax returns due?

30. File the estate's federal and state income tax returns.

31. File estate's federal and state estate and inheritance tax returns.

32. Obtain additional Letters Testamentary or Letters of Administration if necessary.

33. Obtain additional death certificates if necessary.

34. Make claims for any life insurance policies and obtain Form 712 from each insurance carrier.

35. Make claims for any employer-provided death benefits.

36. Make claims for any inheritances under other wills, trusts and so on of people making bequests to the decedent. Consider whether disclaimers should be filed for any.

37. Make claims for veteran or other government benefits.

38. Make claims for pension or other retirement assets, arrange for any rollovers before the deadlines. Contact your accountant and the bank or brokerage form to confirm these deadlines.

39. Apply for a tax identification number on Form SS-4 for the estate and any trusts set up under the decedent's will.

40. File Form 56 with the IRS notifying the IRS where tax information should be sent.

41. Value all assets at date of death and value all assets at the Alternate Valuation Date, if appropriate.

42. Determine whether the estate received any Income in Respect of the Decedent (IRD) under Code Section 691.

43. File personal property tax returns if applicable.


44. Call the post office and arrange to have all mail forwarded to you as executor. Carefully review all mail to identify bills to pay (if the estate is required to do so), assets to gain control over (e.g., an interest or dividend payment could indicate a bond or stock that you had not previously been aware of).

45. Terminate decedent's lease for residential property if required or if permitted and advantageous. If not, investigate a sublease. Review the lease provisions to determine the rights you have as executor.

46. Obtain all prior gift tax returns since these will be necessary to properly complete the estate's tax return.

47. Determine whether ancillary probate is necessary to address real estate located in different states.

48. Obtain evidence corroborating any debts or claims and then determine if the estate must pay them. If debts must be paid, address them in the budget (cash flow analysis).

49. Review any unpaid medical expenses of the decedent and determine whether insurance will cover them, and if not, whether they have to be paid by the estate.

50. Verify who can legally use decedent's car; verify insurance coverage.

51. Cancel credit cards.

52. Cancel videotape rental, library and other courtesy cards.

53. Notify decedent's banks that they should permit outstanding checks to clear.

54. Obtain prior three years' bank records and income tax returns as they will probably be necessary in the event of an IRS tax audit.

Q. Can I provide for the automatic transfer of assets to someone by using a joint tenancy with right of survivorship without going through probate?

A. A Joint Tenancy with Right of Survivorship or Payable on Death is allowed under Texas law. The final disposition of assets held in A Joint Tenancy With Right of Survivorship or Pay on Death is governed by the beneficiary designation on the signature card or other document establishing the account or relationship. This designation of beneficiary makes the disposition of these assets outside of any probate proceedings. This type of transfer while avoiding probate does have potential problems because all of the assets subject to the beneficiary designation will go to that beneficiary and to no one else. This means that if this type of account or relationship is established with one child or heir to assist a person with the management of his /her assets and without the understanding that no other beneficiaries or heirs will receive the assets subject to the Joint Tenancy with Right of Survivorship or Pay on Death. This means that these assets will not be shared with the other estate beneficiaries or heirs. This is fine if this is what you want to do,


but in many situations this result is not intended. It is a great technique but make sure that it does what you want.

Q. What is a Disclaimer and can a decedent’s estate be corrected by having a beneficiary disclaim part or all of the beneficiary’s interest in the estate?

A. Disclaimers are another method of correcting a Decedent's estate plan post mortem. In order to be effective, the disclaimer must be "qualified", and comply with the provisions of both the Internal Revenue Code and Texas Probate Code. If qualified, the disclaimer constitutes an irrevocable and unqualified refusal to accept an interest in property. The person's disclaimed interest is treated as if it had never been transferred to the person making the disclaimer. Under the Internal Revenue Code, the disclaimer must meet the following four conditions:

1. The refusal to accept the property must be in writing.

2. The written refusal must be received by the transferor, his legal representative, or holder of legal title, no more than nine months after the later of: a. the day in which the transfer creating the interest is made; or b. the day on which the person making the disclaimer reaches the age of twenty-one years.

3. The person making the disclaimer must not have accepted the interest of its benefits prior to the disclaimer.

4. The interest must pass to a person other than the person making the disclaimer as a result of their refusal to accept the property. The Internal Revenue Code and the Texas Probate requires the disclaimer be in writing, signed by the disclaimant, and filed with the Probate Court in which the administration of the Decedent's estate is pending. Notice of the disclaimer must be given to the personal representative, as well as any charitable organizations, which may be effected by the same. Further, the disclaimer must be irrevocable. There are several situations in which a disclaimer would be useful, but perhaps the most widespread use is to decrease the amount qualifying for the marital deduction so that the Decedent's unified credit is utilized. This situation occurs when the decedent dies with a taxable estate, but his will does not provide for any estate tax planning. For example, the Decedent dies leaving his entire estate, which is taxable, to his surviving spouse. The surviving spouse disclaims an amount equal to the current unified credit (i.e. $1,000,000.00 in 2002). The Decedent's will provides that if the spouse predeceases, the assets pass to the decedent's children. The unified credit amount then passes to the Decedent's children free of estate tax, and the remainder passes to the surviving spouse, which qualifies for the marital deduction. Another reason is to save the disclaimed amount from being attached by the disclaimant's creditors, and is a permissible reason to disclaim. However, a disclaimer will not be effective if the disclaimant files bankruptcy within a certain time period before the decedent's death.

Q. Can you provide for a Surviving Spouse and children even though there is no will or if there is a will it does not do so?


A. In both Independent and Dependent Administrations, Texas law requires the personal representative to set aside certain assets for the benefit of the surviving spouse or minor children so as to prevent those assets from being subject to the claims of creditors of the estate. Creative use of these provisions of the Texas Probate Code can protect numerous assets for the benefit of the surviving spouse and minor children. The Texas Probate Code provides for the following protections for the decedent's surviving spouse and family:

1. Setting Aside Exempt Property-during the course of administration, all property of the estate that is exempt from execution or forced sale under the Constitution and the laws of the State of Texas shall be set aside for the surviving spouse, minor children, and unmarried children remaining with the family of the deceased. If at the end of administration it is determined that the estate is insolvent, not taking into account the exempt assets and allowances, then such exempt property shall pass to the surviving spouse and children to whom the property was set apart and title shall be absolute to those individuals and not be taken for any of the debts of the estate except as otherwise provided in the Code.

2. Allowance in Lieu of Exempt Property- Section 273 provides that if there are not among the effects of the deceased any of the specific articles exempted from execution or forced sale under the Constitution and laws of this State, the court may make a reasonable allowance in lieu thereof to be paid to the surviving spouse and minor children. The allowance in lieu of homestead shall not exceed $15,000.00 and the allowance in lieu and other exempted property shall not exceed $5,000.00;

3. Family Allowance-Section 286 provides that an allowance be set aside for the surviving spouse and minor children in an amount sufficient for the maintenance of such surviving spouse and minor children for one (1) year from the time of death to the testate or intestate. The allowance shall be fixed with regard to the facts and circumstances then existing and those anticipated existing during the first year after such death.

In a dependent administration, the personal representative sets allowances by filing an application with the Court and having the same approved by the Court. An independent personal representative will not be able to obtain an order from the Court setting the allowances. However, the independent personal representative is required to set the allowances.

Q. If there is no will and the decedent's estate is small, is there a way to avoid or minimize the cost of probate?

A. A Small Estate Affidavit can be used if the entire value of the assets of Decedent's estate, excluding homestead and exempt property, does not exceed $50,000.00. All of the distributees of the estate of a Decedent who dies intestate may file an affidavit with the Probate Clerk, sworn to by two (2) disinterested witnesses, showing the condition of the decedent's estate, and use the same to transfer title of Decedent's assets, without the necessity of an administration. Further, any person transferring the Decedent's assets pursuant to such small estate affidavit shall not be liable for the transfer.


Q. If there is no will and no need for an administration of the decedent’s estate, is there a simple, inexpensive and quick method to transfer real property?

A. An Affidavit of Heirship as set out in Section 52(A) of the Texas Probate Code was amended last legislative session to provide a statutory form to be used concerning the identity of the decedent's heirs, and the affidavit shall constitute prima facia evidence of the facts stated therein after it has been on record for five (5) years or more in the county deed records. This is an easier way to transfer title to the heirs of a Decedent who dies intestate. Most title companies will routinely accept such evidence without question.



INVENTORY, APPRAISEMENT, LIST OF CLAIMS,DEBTS AND CREDITOR INFORMATION

NAME OF DECEDENT: _________________________DATE OF DEATH: ______________________________

1. Real Property:

1st Tract: Street Address: _____________________________________________________Legal Description: _____________________________________________________________________________________________________________________________________Fair Market Value (at date of death): $___________________________Copy of Deed.Copy of deeds of trust if lien on property. If debt, include outstanding balance at date of death.

Address of Real Estate with Mortgage: ______________________________________Name of Mortgage Company: _____________________________________________Address of Mortgage Company: ___________________________________________Copy of Amortization Schedule.

Copy of leases, if any.Copy of tax statement showing value.Most recent appraisal, if any.Separate / Community (circle one)

2nd Tract: Street Address: _____________________________________________________Legal Description: _____________________________________________________________________________________________________________________________________Fair Market Value (at date of death): $___________________________Copy of Deed.Copy of deeds of trust if lien on property. If debt, include outstanding balance at date of death.



3rd Tract: Street Address: _____________________________________________________Legal Description: _____________________________________________________________________________________________________________________________________Fair Market Value (at date of death): $___________________________Copy of Deed.Copy of deeds of trust if lien on property. If debt, include outstanding balance at date of death.



LIST INFORMATION FOR ADDITIONAL TRACTS ON SEPARATE SHEET

2. A. Personal Property:

A.1 Household goods, appliances, furniture, toolsTotal Fair Market Value at Date of Death: $___________________(Circle One) Community / Separate property?

A.2 Jewelry, clothing, and personal itemsTotal Fair Market Value at Date of Death: $___________________List significant individual items and estimated value below:

Item Fair Market ValueAt Date of Death

Community/Separate

1.2.3.4.

LIST INFORMATION FOR ADDITIONAL ITEMS ON SEPARATE SHEET

B. Automobiles, Trailers, Boats, Motorcycles, Etc. :

B.1 Description: ____________________________________________________________Date of Death Fair Market Value $_____________ Community / Separate (circle one)



LIST INFORMATION FOR ADDITIONAL VEHICLES ON SEPARATE SHEET

Inventory, Appraisement, List of Claims, Debts and Creditor Information 2

Need copy of title to all above. If lien on vehicle, name and address of lienholder with outstanding balance at date of death.

C. Cash, Notes, Mortgages Held, Etc.: (Cash in financial institutions)

Institution: _______________________________________________________________Address: _________________________________________________________________Name(s) on account: ________________________________________________________Acct. No: ___________________Balance at death: $_________ Community/Separate (circle one)



LIST INFORMATION FOR ADDITIONAL INSTITUTIONS ON SEPARATE SHEET

Provide the following documents: Copy of last statement immediately after death Copy of Note or Mortgage held

D. Stocks And Bonds

D.1. Certificates and bonds held by Decedent

Description: ________________________________No. Of Shares/Bonds held at death _____________Value per share/bond at death $________________Total value of shares at death $________________Community/Separate (circle one)




LIST INFORMATION FOR ADDITIONAL BONDS ON SEPARATE SHEET

Provide the following documents:Copy of last statement immediately after death.Stocks or bonds not held by a broker.Copy of stock certificates.

D.2. Certificates and Bonds Held by Broker

Name of Brokerage Company: _________________________________________Name of Broker: ____________________________________________________Address of Brokerage Company: _______________________________________Phone Number of Brokerage Company: _________________________________





Provide the following documents:Copy of last statement immediately after death.Stocks or bonds held by a broker.Copy of stock certificates.


D.3 Certificates and Bonds Held By Company

Name of Company: __________________________________________________Name of Individual Agent: ____________________________________________Address of Company: ________________________________________________Phone Number of Company: ___________________________________________





Provide the following documents:Copy of last statement immediately after death.Stocks or bonds not held by a broker.Copy of stock certificates.

E. Ownership in Closely Held Business

List business entities of which Decedent was a shareholder, member, owner, or partner.

Name of Entity: _____________________________________________________________Type of Entity (for example, C corporation, S corporation, limited liability company, general partnership, limited partnership, sole proprietorship): ________________________________Community/Separate (circle one)Names, addresses, and phone numbers of other persons who are shareholders, partners, members, etc.: _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________




LIST INFORMATION FOR ADDITIONAL ENTITIES ON SEPARATE SHEET

Provide the following documents for each entity: Copy of corporate or record book. Balance Sheet as of date of death.

Real estate owned by business: Copy of deed.

Copy of deeds of trust if lien on property. Copy of leases, if any. Copy of tax statement showing value. Fair market value if you think tax statement is not accurate. Most recent appraisal, if any.Copy of last statements for all Business financial institution accounts, including banks, brokers.


F. Miscellaneous Property

Item Fair Market ValueAt Date of Death

Community/Separate

1.2.3.4.

LIST INFORMATION FOR ADDITIONAL PROPERTY ON SEPARATE SHEET

3. Life Insurance : (INCLUDING CREDIT LIFE POLICIES)

A. Polices Insuring the Life of the Decedent:

Provide copy of each life insurance policy.

A.1 Insurance Co. ______________________________________________________Agent’s Name: _____________________________________________________Agent’s Address: ___________________________________________________Policy No.: ________________________________________________________Type of Policy (i.e., whole-life, term, etc.): ______________________________Owner of Policy: ___________________________________________________Community/Separate (circle one)Name(s) of Beneficiary(ies): ____________________________________________________________________________________________________________________________________________________________________________Face Amount of Policy: $___________________Outstanding Loans Against Policy: $_______________Net of Policy Benefits Payable: $_______________

A.2 Insurance Co. ______________________________________________________Agent’s Name: _____________________________________________________Agent’s Address: ___________________________________________________Policy No.: ________________________________________________________Community/Separate (circle one)Type of Policy (i.e., whole-life, term, etc.): ______________________________Owner of Policy: ___________________________________________________Name(s) of Beneficiary(ies): ____________________________________________________________________________________________________________________________________________________________________________Face Amount of Policy: $___________________Outstanding Loans Against Policy: $_______________Net of Policy Benefits Payable: $_______________


A.3 Insurance Co. ______________________________________________________Agent’s Name: _____________________________________________________Agent’s Address: ___________________________________________________Policy No.: ________________________________________________________Type of Policy (i.e., whole-life, term, etc.): ______________________________Owner of Policy: ___________________________________________________Community/Separate (circle one)Name(s) of Beneficiary(ies): ____________________________________________________________________________________________________________________________________________________________________________Face Amount of Policy: $___________________Outstanding Loans Against Policy: $_______________Net of Policy Benefits Payable: $_______________

LIST INFORMATION FOR ADDITIONAL POLICIES ON SEPARATE SHEET

B. Polices Insuring the Life of the Persons Other Than the Decedent of which the Decedent Had an ownership interest, such as surviving spouse or children:

Provide copy of each life insurance policy.

B.1 Insurance Co. ______________________________________________________Agent’s Name: _____________________________________________________Agent’s Address: ___________________________________________________Policy No.: ________________________________________________________Type of Policy (i.e., whole-life, term, etc.): ______________________________Insured: __________________________________________________________Owner of Policy: ___________________________________________________Community/Separate (circle one)Name(s) of Beneficiary(ies): ____________________________________________________________________________________________________________________________________________________________________________Cash Value of Policy: $___________________Face Value of Policy: $___________________Annual Premiums: $____________________Are premiums paid up? Yes _____ No _____When does policy expire, if applicable? ___________________




LIST INFORMATION FOR ADDITIONAL POLICIES ON SEPARATE SHEET

4. IRA’s, 401-K’s, Pension Plans, Profit Sharing :

Type of Plan: ______________________________________________________________Owner of Plan: _____________________________________________________________Beneficiary: _______________________________________________________________Name of Plan Administrator: __________________________________________________Address of Plan Administrator: ________________________________________________Phone Number of Plan Administrator: ___________________________________________Value at Date of Death: $_______________Provide copy of last statement immediately after date of death




5. Safe Deposit Box :List of items in safe deposit box_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

6. Debts and Creditor Information :

Funeral Costs $_______________Flowers $_______________Headstone $_______________Minister Fee $_______________Probate Costs $_______________Probate Attorney Fees $_______________Medical Expenses $_______________Utility Bills $_______________Credit Cards $_______________Miscellaneous

$_______________$_______________$_______________


CREDITOR INFORMATIONCreditor Address Debt Amount Community/Separate

**Include copy of last statement immediately after date of death. To expedite the probate process, please provide this information to our office within 60 days from the date the Will is admitting to probate. If you need more room, please attach additional sheets.

7. List of Claims :

A. List of claims Owed to Decedent (i.e. IRS Refunds, Deposit Refunds, Medical Overpayments, etc.)_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

B. The following claims have been filed against the estate: _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

C. ________ Check if applicable. There are no claims due or owing to the Estate other than those shown on the foregoing Inventory and Appraisement, except for unpaid claims due the estate from medical insurance policies, which should be close to the amount of medical bills.



CHECKLIST FOR PROBATE INVENTORY ANDFEDERAL ESTATE TAX RETURN (706)

NAME OF DECEDENT: _________________________DATE OF DEATH: ______________________________

The following information will be necessary to prepare the Probate Inventory and the Federal Estate Tax Return for Decedent’s estate. You may fill in the requested information on the extra copy of this checklist and return it to me, along with the documents requested. Where the requested information is inapplicable to Decedent’s estate, please so indicate on the checklist.

Copies of Decedent’s Federal Income Tax Returns for the last three (3) years.

A copy of any Federal Gift Tax Return filed by Decedent .

A copy of any trust created by Decedent of which Decedent was a beneficiary or trustee, together with an inventory of the assets of any such trust.

A copy of the deed or other evidence of title to Decedent’s home and any other real estate or mineral interest owned by Decedent and the estimated fair market value of the property.

(If any mineral income is being received from any of such real property, then please furnish copies of the applicable documents as to this and a schedule of the income received during the past three (3) years.)

A copy of the homeowner’s insurance policy for Decedent’s home.

Was Decedent the beneficiary of any annuity or employee benefit program? If so, please provide the name of the company and a description of the plan.

List of contents and location of any safe deposit box in Decedent’s name, individually or jointly. If held jointly, please provide the name and relationship of joint depositor.

Copies of all mortgages and promissory notes receivable owned by Decedent, and all mortgages and promissory notes payable executed by Decedent, together with any accompanying security instruments (including amortization schedule or the amount of the unpaid balance and accrued interest on date of death).

A list of all funeral expenses (including the name and address of payee) incurred in Decedent’s behalf and any death benefits received for Decedent’s funeral expenses.

Checklist For Probate Inventory & Federal Estate Tax Return (706) 2

A list of all debts owed by Decedent at the date of death, including utility bills, unpaid ad valorem taxes (for the current year and any prior years), income taxes, doctor bills and department store bills.

A list of all claims which Decedent owned at the time of their death, including claims for health insurance reimbursement and income tax refund.

A list of any assets Decedent owned jointly with someone.

A list of the year, make and model of any automobiles owned by Decedent at the date of death.


A list of any valuable art works, jewelry or furs owned by Decedent at the date of death and the approximate value, and a copy of any insurance policy under which such property was insured as scheduled personal property.

A list of all real property owned by Decedent and situated in a state other than Texas. Please attach a copy of the legal description and the tax valuation by the applicable appraisal district.

(If any mineral income is being received from any of such real property, then please furnish copies of the applicable documents as to this and a schedule of the income received during the past three (3) years.)

Please provide us with a copy of Decedent’s death certificate.

Did Decedent receive any property by inheritance or Will within ten (10) years of their death? If so, please provide a description and value of such property, the name, date of death, and social security number of the person from whom Decedent received such property and the Internal Revenue Service office where such person's estate tax return, if any, was filed.

Decedent’s date of marriage and domicile at the time of marriage to any Spouse.


Decedent’s date of birth and the year in which Decedent moved to their last place of residence.

If Decedent owned an interest in any assets (closely-held corporation, partnerships, etc.) not listed above, please provide a description of each such asset and its estimated value at Decedent’s date of death. With respect to each closely-held business and partnership, please provide copies of statements of assets and liabilities for the date of death and for five (5) years before the date of death, as well as statements of net earnings for the same five (5) years.

Please provide the name, age, address, social security number, and relationship to Decedent , if any, of all individuals who are beneficiaries of Decedent’s estate.

Name Age Address SSN Relationship

Please provide the name, address and telephone number of Decedent’s accountant and stockbroker, if any.

Name Address Telephone No.


A list of all marketable securities owned by Decedent. Please attach copies of all certificates or fill in the following information with respect to number of shares, whether common or preferred, the registered owner, and the certificate number.

Company Principal Exchange

No. of Shares

CUSIP Number

Class RegisteredOwner

Certificate No

Dividends Declared, not yet Pd

as of the Date of Death

A list of all bank accounts held in Decedent’s name, including name of bank and address, account number, type of account (checking, savings, certificate of deposit), amount in account on date of death (______________), interest accrued from last posting date to date of death in savings accounts, and outstanding checks in checking account on date of death (______________).

Bank Name and Address

Account No.

Type ofAccount

Amount AccruedInterest

Outstanding Checks

Styling of Account

A list of any insurance policies on Decedent’s life (including credit life) or which Decedent owned on the life of someone else, including the name and address of the insurance company, the policy number, the name of the insured, the name of the owner of the policy, the amount of the policy and the beneficiary of the policy.

Company Name and Address

Policy No.

Insured Owner Proceeds Beneficiary

________________OBTAIN A FORM 712 FROM INSURNACE COMPANY ON ANY LIFE INSURANCE INSURING THE LIFE OF DECEDENT

________________OBTAIN A FORM 712 PART TWO FROM INSURNACE COMPANY ON ANY LIFE INSURANCE INSURING THE LIFE OF DECEDENT’S SPOUSE


A list of all bonds, including government obligations, owned by Decedent. Please attach copies of all bonds or fill in the following information with respect to type of bond, number of bonds, par value, rate of interest, due date and name(s) in which registered.

Type of Bond No. of Bonds

Par Value Interest Rate Due Date Registered OwnerBid & Asking

Prices for Date of Death

Special Items Needed:
