Fort Worth Star-Telegram, Texas, Savvy Consumer Column

Fort Worth Star-Telegram, Texas

Teresa McUsic

January 9, 2004

Jan. 9--Deciding whether or not to write a will comes down to a single, simple choice: Do you want to decide who gets what you leave behind when you die or would you rather leave those choices to the state of Texas?

After a lifetime of having kids and accumulating homes, cars, investments and other assets, you may be surprised by what can happen to your possessions if you die without a last will and testament.

Bottom line: Texas law spells out rules for court administrators to determine guardianship of minor children and distribution of your assets.

Sounds easy enough, but your heirs could face a mountain of unnecessary expenses if you die without laying out your final wishes in a will, say local lawyers board-certified in estate planning and probate.

"Most lawyers make their money on people who don't do a will," said veteran Fort Worth lawyer Bill White, a partner at Wilson & White.

"That's where the big legal fees are incurred. If you don't make a will, the estate is all messed up."

Local attorneys quote fees anywhere from $600-$2,000 for a will, depending on the extent of the estate. (White recommended cutting out chatting at the meeting, because most lawyers bill by the hour.) Without a will, however, costs can skyrocket.

Lisa Jamieson, a partner at Bruner, Jamieson and Pappas, has one client who died without a will and no wife and children left, but $400,000 in assets. The case has racked up $10,000 in expenses so far, as the court and attorneys sift through the estate and search for living relatives.

"Texas has a very cost-efficient probate system if you can take advantage of it by having the proper language in your will," Jamieson said.

With a will, the probate process validates the will and records it at the courthouse in just minutes at a minimal cost, the attorneys said.

Without a will, the process can drag on for years, particularly with the complications of minor children and extensive assets. And the state now requires that an attorney be hired to determine heirship, deal with creditors and find and disburse assets -- a costly and time-consuming process, White said.

Along with the court-appointed estate administrator, state law dictates some big surprises for children and assets in the absence of a will.

Take the state's handling of minor children, for example. Without a will, the state decides who will take them based on next of kin, starting with grandparents and working down to aunts and uncles, cousins, even older children. Without family agreement, such a decision could become quite sensitive, and often very expensive, Jamieson said.

"Leaving a minor child behind without a will could easily cost between $10,000 and $15,000 in legal fees," she said. "That's compared to $1,500 to $2,000 if there is a will that goes through probate."

The law also requires the state to continue its role in overseeing the financial side of the estate for minor children when there is no will. A court-appointed guardian will have the state looking over his or her shoulder every time a dime is spent from the estate.

"A guardian can't spend any of the estate without court approval," Jamieson said. "It's very restrictive."

Another problem White said he frequently sees among his clients is the state's required distribution of assets for those without a will.

For a century, the state required that all assets be split 50-50 with surviving spouse and children for those who didn't write a will, White said. That changed a few years ago, and the spouse now inherits all of the jointly owned or community assets, he said.

But, by law, if the deceased had separately owned property and no will, the spouse inherits only a third of it. The remainder two-thirds of separate property goes to the children.

Texas law also dictates that if the deceased had children from a previous marriage and no will, the spouse would receive half of the community property and half would go to all of the children.

"That's where I see all the problems," White said.

Another major reason for a will is the tax implications. Federal estate taxes are imposed on assets passing to heirs, and Congress raised the limit at which the tax is assessed to $1.5 million for 2004. (Assets include life insurance, pension funds and other items that pass to an heir outside a will.) The tax is a whopping 48 percent this year, but is scheduled to decline 1 percentage point a year until it's 45 percent in 2007.

Still, certain aspects of a will, such as a bypass trust, can increase your limit before federal taxes kick in, Jamieson said. And a will can defer payment of taxes until after the death of the spouse, according to a pamphlet on wills created by the Texas Young Lawyers Association and the State Bar of Texas.

Texas recognizes oral, handwritten and typewritten wills, but all three must meet strict requirements. Oral wills, for example, are only valid if the person is in his or her last illness and at home and owns only personal property. Three witnesses are required.

Handwritten wills also have specific requirements.

Lawyers and consumer experts decry the use of software or other means to obtain a will, such as copying a relative's will. But if you do use will software, make sure it is specific to Texas laws.

"We look at wills drafted by software or done by themselves and in nine out of 10 cases we find mistakes," Jamieson said. "For a single parent with minor children, it's really dangerous for them to do a will on their own."

Jamieson recommends shopping for both fees and a lawyer well-trained in wills and probate, ideally one who is board-certified in probate law. Check to see whether your company may offer employees assistance with legal fees.

Also, White recommends that consumers create a list of all assets, including account numbers and institution locations, and leave it where a relative can find it, such as a safety deposit box that they also can access.

Teresa McUsic's column appears Mondays and Fridays. (817) 460-5514. Tmcusic@savvyconsumer.net.

For a copy of a free brochure on Texas law and wills go to www.texasbar.com/public/consumerinfo/helpfulinfo/will.pdf.

I BEQUEATH…

Some software packages or kits help consumers prepare a will. The experts say a package should include the following:

--A trust for minor children.

--Financial power of attorney and medical power of attorney to make decisions when you're incapacitated.

--A directive to physicians (living will).

--Beneficiary designations on life insurance and other assets that can go directly to a survivor.

-----

To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to http://www.dfw.com

(c) 2004, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News