Transcript

Ellen Williamson: If you don’t write your own estate plan, the state of Texas already wrote one for you.

Voiceover: You’re listening to theTexas Family Law Insiders podcast, your source for the latest news and trends in family law in the state of Texas. Now, here’s your host attorney Holly Draper.

Holly Draper: Today we’re excited to welcome Ellen Williamson to the Texas Family Law Insiders podcast. Ellen has been practicing law since 2004, and is the owner of Ellen Williamson Law PC. She’s also of counsel at the law firm of Farrow-Gillespie Heath Witter. Ellen began her firm in 2013 wanting a client centered practice modeled around her grandfather’s philosophy of service. She handles estate planning, probate and guardianship matters in the Dallas area. She’s a member of the National Association of Elder Law Attorneys in the Texas Bar College, and she has enjoyed volunteering through the Episcopal Diocese of Dallas and the Dallas Bar Association. Thank you so much for joining us today.

Ellen: Thank you. Pleasure to be here.

Holly: So why don’t you tell us a little bit about your background.

Ellen: Well, after graduating from A&M, went straight to law school at SMU, had a few different thoughts around what kind of law I wanted to practice after I got out, I think there’s some of us that go in and know exactly what we want. And some of us have to try on a few things. About a year after I graduated law school, I was between things. Hurricane Katrina hit the Small Business Administration Disaster Assistance Office, over here and the Metroplex was hiring. So went over there, thought maybe I’d be there for a little bit till, you know, I decided what I wanted to do.

And eight years went by, and in spring of 2013, I was home on maternity leave with kid number two, and thought, you know, I really enjoy practicing law, but feels like it’s time to maybe try something different. And I decided that maybe having two kids under three at home and trying to do my first marathon that December, maybe it wasn’t enough to bite off for a year. So seemed like a good idea to go leave that job and go jump into private practice for the first time in a while. And I had done some estate and probate work in some clerkships and some early jobs and felt like it was maybe a pretty good fit, so decided to give it a try and ended up finding that I love it. And here we are almost nine years later, and still lucky to enjoy what I do most of the time.

Holly: So you mentioned running your first marathon. How many marathons have you run?

Ellen: Two. And then there is one included through the Ironman Triathlon, but run would be a really generous word for what I did there.

Holly: Wow, did you do a full Ironman?

Ellen: I did.

Holly: Wow. That’s amazing.

Ellen: I was I was one of the last hour finishers, which is actually kind of fun. It’s kind of fun to be there at the finish line and cheer on the last folks.

Holly: Well, that is far more than probably 99.9% of the world could ever accomplish. So congratulations on that.

Ellen: Thanks.

Holly: So how would you describe your current practice?

Ellen: So I do, you know, at any given time, the proportions may shift, I feel like things come in, in waves. But I do estate planning, probate, guardianship, and those are really just the upstream and downstream sides of the same coin. So it you know, to me feels, I feel like I’m a better estate planner, because I’ve seen things play out in probate or in guardianship to where I say, oh, this is where I can I can let clients know and we can plan around and anticipate in their estate plan.

And then on the flip side, when things come up in probate and guardianship, sometimes it’s easier to look at the plan and go okay, well, I see what they were trying to do, or oh, you know, if only they had done this, so I do those. The last, you know, year and a half with COVID coming along, suddenly, it’s been helpful to have some SBA experience after having set that aside for a pretty long time. So have a couple of one offs where I’ll help folks with the their disaster economic injury disaster loans, or with last year with some PPP loans. So a little bit of dabbling there.

Holly: So our audience is primarily family lawyers. So today we’re here to chat about things that family lawyers should know about estate planning. So let’s start with the basics. Why does everyone need an estate plan?

Ellen: Well, the way I like to explain it to people is if you don’t write your own estate plan the state of Texas already wrote one for you. So I went when I was speaking at a retirement home one, a couple years ago, looked out at the audience and said, raise your hands if you have an estate plan. And maybe a third of the audience raise their hands. And I said, well, that was a trick question. Everyone in this room has an estate plan. It’s just a third of you actually chose what you wanted. And the rest of you, the state of Texas took a guess. And maybe it’s close to what you wanted. And maybe it’s not at all close.

So you know, we’re all going to pass away someday our stuff is going to go to someone. If you become incapacitated, the question is not whether someone will make decisions for you. But if it’s going to be someone you would pick, or just the court going off the list or, and whether it’s going to be through a means that gives your agent a lot of flexibility and saves money, or if it’s going to be a cumbersome guardianship process. So, you know, I think everyone needs a plan, because you you probably know better than the legislature, what you want to have happen with your stuff, how you want to provide for your family, and what you’d want, if you can’t make your own decisions.

Even for kind of that boring person that, you know, I say, the boring family, which in my world is, that’s a good thing, and probably in your world too. A boring family is one where there’s not a lot of issues we’ve got to deal with. But even if it’s a situation where someone says, you know, I would want all my property to go to my spouse, and then to my kids, and it’s our first marriage, and all of our kids are from this relationship. So what the state would do is the same as what I would do, why does it matter? Well, you know, there’s benefit to providing for your wishes in a way where you can give your executor, they don’t have to have a bond, they can act independently.

That makes it easier and cheaper to administer your estate. Most people, I finally had my first client recently, who wants their plan to leave property to their kids, once they turn 18. Before then I said, oh, you blown my example, I always used to say, I’ve never had anyone that wants to leave stuff to their 18 year olds. So now I could say one out of a couple of 100. But you know, when you do a will or a trust, or, you know, really every plan should probably have some combination thereof, you can choose to say, if property is going to go to my children, I want it to be held in trust for them until you know, they’re 25. Or maybe I want it to be held in trust for the rest of their life.

And at a certain age, you know, they can become a co trustee or then they can become a sole trustee. And so it ends up being sort of a little bit of advanced estate planning for your child and that it can kind of help keep separate property separate. The other big thing as far as incapacity planning is, I like to describe it, as you know, if you have powers of attorney, or a document appointing a successor trustee, that’s sort of like a magic wand. You know, you’ve signed your power of attorney, you’ve named your agents. And as soon as the need arises, they just pick that document up and they go, and it works. And they don’t have to wait for some court to bless it first.

And they don’t have to play Mother May I and ask a judge for permission every time they want to do something for you. Well, if you don’t have that, and you’re incapacitated, then what happens is someone has to go to court and as to become your guardian. And the guardian is going to have to post a bond, they’re going to have to play kind of Mother May I and get permission. And so it’s sort of the difference between, you know, going to the dentist for you know, your your dental cleaning your preventive maintenance or going for a root canal. You know, nobody looks forward to going to their dental cleaning, but it’s a whole lot better to do that and avoid the need for that root canal.

Holly: Definitely. So what goes into a basic estate plan?

Ellen: Well, your estate plan, essentially is doing two and if you have minor kids, I guess three things. It’s providing for disposition of your property at your death. Maybe also sometimes during your life. It’s providing for your incapacity. And then if you have minor children, it’s planning ahead for who’s going to care for them if you can’t. You know, a lot of times people will say, well, should I have a will or a trust? I actually look at that a little differently. It’s, you know, do you want a will based plan where the will is the dispositive document, but it probably is going to include some contingent trusts at least, or do you want an estate plan where a revocable living trust is the primary dispositive document, but you’re always going to have a pour over will.

Because I like to say a living trust is like a bucket, and you’ve built this bucket. And all around the side of the bucket, you’ve written the rules about who owns it, who gets to manage it, and where the stuff inside the bucket goes, after you die. But you have to go fund property into it. Well most people are not perfect about funding their removable trust during life. So you have to have what’s called a pour over will. And so I say this is kind of like the shovel that if anything, didn’t make it into the trust during your lifetime, that wills gonna leave it to the trustee. So you know, for any given person, it may or may not make sense to have that trust exist during life. Some folks decide, I like to say it’s the difference between do you want to build a building today, or do you just want to create the blueprint for it. We need to provide for the possibility that you may have minor children, for example, or an incapacitated beneficiary.

We may or may not need to deal with that right now, versus just planning ahead for it. And then incapacity planning. If someone has a trust, that’s a piece of it, because you can provide that your property is held in your trust, and you’re the initial trustee. And once you can’t do it, your successor does it. But then financial and medical powers of attorney are the other big pieces of that. Those are the kind of the magic wand that when need arises, somebody can go out and make decisions for you. And then there’s a couple of other related medical decision making documents.

One is the directive to physicians, which is the kind of the life support or not documents. Where you get, say, if you were, if you wanted to try to make a list of how you would want every possible medical decision that could ever come up made for you, you’d end up with a phone book. Which I guess is a reference that’s quickly becoming dated, and you’d be, you know, changing things all the time. Most of us don’t have informed decisions about how every possible medical decision we we could have should be made. And that’s where you trust your agent under medical power of attorney. But whether or not you’d want life support, if you’re at that stage of life is something that the law recognizes that people may have reasonable informed opinions about that it’s really important to let them express. And then we do a HIPPA release in the estate planning world.

And so when you, if you go to the doctor, and they give you that stack of paper, because you haven’t been there in a while, one of the forms is always going to be the HIPAA release of who that particular doctor can release your records to. The one we do in the estate planning context is kind of a global release that you’re saying any health care provider of mine can release my records to these people, and I’m not going to sue them if they do. You can also do appointment for disposition of remains. So your body’s not part of your estate, your will doesn’t direct where you go and who gets to address that. So your disposition of remains documented where you can say, I want to be buried, I want to be cremated, I want to be blasted out of a cannon. Whatever you want to be.

And you can name who has authority to make those decisions. And then for the folks with minor kiddos, we also want to think about who would be what’s called the guardian of the person of the child. So that’s kind of who parents the child who, who decides where they lives, who signs all those school forms that come home, who can consent to medical treatment, that sort of thing. And then you can also think about, you know, if there was a need to handle finances for them, you know, your will should or trust should be where you do that. But you also as a backstop, want to plan ahead for who would be the guardian of your child’s estate if that need came up.

Holly: Okay, so what kind of people would benefit from having a living trust and not just a will with a contingent trust?

Ellen: I used to say what people who own property in other states and sometimes that as well. The reason being that if you have your will and it’s probated in Texas, the judge who is a Texas judge is going to issue you letters testamentary. Well, those letters testamentary give you authority over personal property everywhere but only over real property in Texas because that judge doesn’t have jurisdiction over real property elsewhere. So your plan has to account in some way for the fact that you’ve got real property in another state, so that you’re not having to do what’s called ancillary probate in that other state. One way to do that is if you’ve got a living trust, you can have the an attorney in that other state prepared deeds deeding that property from client individually to client as the trustee of the trust, and now it’s just covered that way. And that can still make sense.

But the last, I guess, what, four or five years, a lot more states have adopted what are called transfer on death deeds. So it’s sort of like putting a beneficiary designation on real property. And so sometimes for one off things, that can be a good option. So the answer is not always a trust there. I think some of it is just personality. Some clients just feel more comfortable being able to do that. They’re they they understand that having to deal with property, in you know, as trustees during their lifetime is potentially a little more work. But they say, well, I’d rather put in that work on the front end, and kind of make it easier later. Some people cite privacy concerns, because your will once it gets, you know, offered for probate, it’s now you know, you can go on Odyssey and you can see that will.

I think that actually probably matters a little less than people worry it does, because your will doesn’t include, it generally isn’t going to include a laundry list of what you own. It just says I give all my stuff to my people. So if you’re just giving your stuff to your family members, your will is not necessarily telling anyone anything your obituary wouldn’t. But you know, for somebody with privacy concerns that that certainly a matter. Someone who’s looking, knows, maybe they’re going to move to another estate or another state, you know, make may make more sense to have a trust, although it still may be appropriate to update it when they move. To me, I think the biggest value that a trust based plan gives, you know people will say I want to avoid probate.

Well, we can try. But unless you bat 1000 you won’t. I have probated an awful lot of pour over wills for one for one thing that didn’t make it in. Well I want to save money, well, it’s probably not going to be cheaper than doing a will and probating because Texas is pretty easy. But if somebody is planning ahead for their future incapacity, the difference in authority between someone acting as successor trustee, and someone acting as power of attorney is it is meaningful.

Because if property is, you know, if I’ve got a bank account in my name, and I named you as my power of attorney as my agent under my financial power of attorney, and you show up to my bank, the bank says this isn’t our customer. This is our customer’s agent. And so okay, well, you know, we run the traps, sure we can, usually that’ll be fine. But if I have that account funded into my trust, and I’ve named you as the successor trustee, the trustee is the legal owner of the property. So when you come in the bank says that’s our customer. Different name, different face, same same owner. So I think that can be maybe kind of an an overlooked way as where a trust based plan may be helpful.

Holly: So what impact does divorce have on an estate plan?

Ellen: Well, so I always say with, with your whether your will or your trust, you can only give away what you own have authority to give away and haven’t already made disposition of. So one big changes is, you know, when you’re a married person, what you own is 100% of your separate property. You own your undivided one half interest in community property. But you’ve got your spouse has some rights that you can’t give away. For example, you know, for your if you’re a married person, you know, your spouse has a constitutional homestead right to your homestead after your passing. And that’s true whether the homestead is community or separate property. So, as a married person, what you can give away is subject to your spouse’s rights. Obviously, once you’re a divorced person that’s all been addressed, presumably in the divorce decree. So now what you own is your separate property.

If you have an estate plan you did when you were married, that named your spouse as beneficiary, named him as your agent. The law essentially says after your divorce, it’s like we go through with a Sharpie, and everywhere that your ex spouse is named. We just crossed them out and we treat it as though they pre deceased you. So just, you know, sort of automatically your will, your state plan is updated to take those folks out. But it may be the case that once you’re divorced, your plan changes beyond just taking that person out. You know, you may, for example, maybe you had named guardians while you were married, that you go, well, now, I’d want someone different. Maybe now, you don’t have to account for that.

Also, one of the things I always like to ask about in my intake forms is, if anybody, I haven’t, think I, if I’ve seen it, I don’t know if I’ve ever if I’ve seen it, it hadn’t been more than once. But if their divorce decree has any limitations on you know, for example, do they have to keep their insurance a certain way? Well, I’m not doing your insurance planning. But if we think of your estate plan as kind of this overall thing, and your will and trust are, are a big part of it, but not all of it. If we know that this piece of it is, is set in stone, then that’s important to know, as we deal with the other parts of it. So I think it’s, it’s helpful for people to look at their plan and think about, you know, are your wishes different, your financial situation is different, you’ve just gone through a massive financial transaction.

So maybe that changes things. Another thing that I think it’s important for people to know, because our, our areas of law kind of rub up against each other a lot, and it can confuse people. So one of the things I’ll make sure people know is if we’re doing an appointment of guardian for minor children, that’s not a tool to cut off the parental rights of the child’s other parents. So, you know, if you and your ex got divorced, and you want to take away your ex’s rights to parent your child, you got to go, you gotta go to family court for that. We’re not doing that in probate court. So you can do an appointment of guardian for your children. But that takes effect only after the death and incapacity of both you and that other parent.

Holly: So let’s say somebody is divorced, and now they’ve gotten remarried. And now we have a blended family situation. How does that impact estate, the estate plan for those folks?

Ellen: Yeah, well, I think one important thing for people to know is we have what are called pretermitted child rules that if you write your will, and a new child comes along, we look to see hey, should that new child automatically get folded in. There is no pretermitted spouse rule. So if you wrote your will, as a single person, your spouse didn’t automatically get added in. Other than, of course, we go back to that idea that you can only give what you own and have authority to give away. So if you get married, you know, your will maybe left everything to mama, well, everything that you have to give away now is your separate property and your half of the community. So, you know, just by just by that happening, what you can give away has changed a little bit.

As far as blended family planning goes, I think what is important to figure out is if if there are children, it’s important to figure out, do you think of it as all of the children are our children? To where we want to treat it as though you know, you had two kids, I had three kids, as far as we’re concerned, each of us has five kids? Or is it you have your kids, I have my kids. Because you know, that may change what you want to do. If everybody wants to treat it as though all the kids are all all the kids, then the plan could look a little bit more like a first marriage plan where you say, well, you know, maybe everything can go out right? There comfort to the surviving spouse, and everybody feels comfortable that the survivors not gonna do a new estate plan later and cut out the kids.

But what can sometimes make sense is, it may be, it may make more sense in a blended family situation than in a first marriage situation for you to leave your spouse’s share in trust for their life so that you know, the the money funds into that trust and the spouse is provided for for the rest of their life that they don’t have the ability to if they married the pool boy, they can’t leave all the property to someone else. They can’t cut out the kids. The other big thing that comes up here is that, you know, the idea of planning around that homestead, right. That, you know as as you’re trying to plan, you know what your what do you want to do with your property? You need to plan around the fact unless they’ve done agreement to the contrary that your surviving spouse is going to have the right to live in your house for the rest of their life.

Again, whether it’s separate or community property. So knowing that, you know, sometimes I’ll say maybe what makes the most sense is just kind of steer into the skid, leave the house to the spouse, leave other property to your children or buy insurance in a value that you want to be able to give them. But sometimes it can, well, I guess the way to think of it, your estate plan, if everybody already doesn’t get along, you know, I’m, I’m an estate planner, I’m not a magician. I can’t write a plan that’s going to make everybody hold hands and sing Kumbaya. But this feels like one of the areas where if we’re doing our job, well, we can anticipate where the possible conflict points can be. And craft a plan in such a way that maybe we’re not solving existing conflict, but at least we’re not creating a new one.

And this is actually I think, one of the areas where, you know, why do people need estate plans. I think blended families especially, it’s super important, because I’ve I’ve represented folks on both sides of that on the probate in where somebody passed away without a will. And, you know, the spouse is living in the house. And, you know, the kids, the kids are upset, because, you know, they want the house or spouse is upset because she wants to buy out the kids and nobody’s talking. And, you know, you think I don’t know what that decedent would have wanted. But I don’t think the decedent would have wanted their spouse and their children to be fighting afterwards. Whereas with a good estate plan, you can anticipate, hey, this is here. What should we do? And, you know, it’s just unfortunately, if people don’t get along afterwards, there’s just no cheap solution.

Holly: Yeah. One more issue that I thought may be relevant to the intersection of Family Law and Estate Planning is the impact of premarital agreements, on estate planning. How do those play in?

Ellen: Yeah, well, for premarital or, or, or marital agreements, you know, kind of go back to again, that idea you only you can only give away in your estate plan what you own and have the ability to giveaway and haven’t already given away. So if you’ve got an agreement that says that the income from separate property is separate property, well now that means, you know, if you want to leave this whole account to somebody, you can do it and you’re not worried about, oh, you know, we’re going to have to worry about the commingling issue. Another big thing is, you know, that that homestead, right, I feel like that’s the thing that kind of jumps up and surprises people in probate in intestacy, a lot.

So it it’s something that I think a lot of premarital and marital property planning can think about. But if you, you know, if you know that you’re going to want to leave your house to your children, then, you know, maybe within your agreement, you agree that the spouse is going to waive that homestead, right? Maybe in exchange for, you know, are they they get stay there six months, they get some payment, they’re out. So that can change what you have the ability to give away. And I think that’s what’s important.

Holly: So we’re just about out of time. But one question I always like to ask everyone who comes on the podcast is what piece of advice would you give to young lawyers?

Ellen: To my mind when you’re, you know, when you’re a baby lawyer, or, like for me when I, I wasn’t the baby lawyer, but I was kind of a baby probate lawyer. When I when I went into that area, you look at some of those experienced people and you think they just must have the whole estates code in their head perfectly indexed, and they know everything, and they’ve seen everything. And there’s just no question they don’t have the answer to. And if I just keep throwing enough hours at this, maybe eventually I’m gonna get there. I feel like it’s a real real revelation when you go, you know what, everybody else out there, even that person that’s been practicing for 50 years, they are learning on the job every single day.

Even the most experienced people have things come up that you, huh, I didn’t know that was in the code. Oh, I didn’t know we can do that. I’ve never seen that. And I think once you can look at everybody else and say, everybody else is learning how to do this today just like I am. First of all, it’s kind of liberating you go okay, so it doesn’t look like I’m gonna have to try to absorb a whole wall library into my head because that felt super hard. But I feel like that also makes it a little easier to ask people for help. And my experience has been that, you know, every time I feel like every time I’ve asked colleagues for help, or you ask in some of the the Facebook groups, I think have been a big help too.

My experience has been that people are really generous with their knowledge and their experience and with their templates. I don’t think we all really see each other as competitors. There’s, there’s enough clients out there for everybody. And I feel like when you can look at everybody else and say, okay, I don’t look like an idiot, if I don’t know everything, I can go ask for help. That that’s just really, I think that’s a big thing to know. So, it’s helpful to know that early in your practice, instead of feeling like you have to pretend you know it all.

Holly: And yes, and the same definitely is true for family lawyers. And I’m sure it’s true in every area of the law. There’s just so much, so much out there. Nobody’s gonna know it all. And we’re all gonna keep learning till the day we quit practicing, I’m sure.

Ellen: For sure.

Holly: So we’re gonna our listeners go to learn more about you?

Ellen: Well go to my firm website, EllenWilliamsonlaw.com. You can also also see me on the Farrow-Gillespie Heath Witter website fghw.com. And the Facebook pages for both of those.

Holly: All right. Well, thank you so much for joining us today. For anyone listening, if you enjoyed this podcast, you can leave us a review and subscribe to enjoy future episodes.

Voiceover: The Texas Family Law Insiders podcast is sponsored by the Draper Law Firm. We help people navigate divorce and child custody cases and handle family law appellate matters. For more information, visit our website at www.draperfirm.com