Guardianship Bank Account Rules

Managing a guardianship in Texas can be a daunting task, especially when it comes to financial accounts. Guardianship accounts are set up to safeguard the financial interests of those who cannot manage their own affairs due to age, incapacity, or other reasons. Ensuring that these accounts are managed properly according to state laws not only protects the ward but also upholds the guardian’s fiduciary duties.

Understanding Texas’ legislation on guardianship accounts is crucial for anyone appointed as a guardian. Missteps in managing these accounts can lead to legal complications and may compromise the welfare of the ward. For guardians in Houston, obtaining knowledgeable legal guidance is key to addressing this intricate area of law effectively.

At The Law Office of Whitney L. Thompson, our skilled Houston guardianship attorneys provide comprehensive legal support to guardians managing these sensitive responsibilities. Our team is well-versed in Texas guardianship laws and can assist you in fulfilling your fiduciary duties while maintaining strict compliance with all legal requirements. Whether you need help setting up a guardianship account, understanding your legal obligations, or tackling the court system, our attorneys are here to guide you every step of the way. We also address legal concerns about guardianship such as whether guardianship overrides parental rights.

If you’re managing a guardianship account and want to ensure everything is handled correctly, don’t hesitate to reach out to us. Contact The Law Office of Whitney L. Thompson today at (281) 214-0173 to schedule a consultation and secure the guidance you need to manage your guardianship responsibilities effectively and responsibly.

Guardianship Bank Accounts in Texas

There are two types of guardianship in Texas: guardianship of the person and guardianship of the estate. Guardians of the person are responsible for managing the overall welfare of the ward  (the individual under guardianship). This can include seeing that their basic needs are met as well as making decisions that can impact their well-being.

Guardians of the estate are responsible for managing the financial well-being of those who cannot handle their own financial affairs due to various reasons such as age, incapacity, or disability. Guardians of the estate can have more duties and responsibilities to fulfill compared to guardians of the person, this includes handling a guardianship account. 

Guardianship bank accounts are pivotal in managing the finances of individuals under a guardianship of the estate, a status often designated. Guardianship bank accounts are financial accounts where a guardian administers the funds specifically for the benefit of the ward which are strictly regulated to protect their interests. These accounts are opened by the guardian once they are officially appointed by a court and must be separate from their personal account. The funds in these accounts come from the ward’s income or other financial resources, and can only be used for expenses that directly support the ward’s welfare and needs.

Guardianship bank accounts facilitate the transparent management of the ward’s assets. Under Tex. Est. Code § 1163.101, guardians are required to submit an annual financial report detailing expenses and payments made on behalf of the ward. This transparency helps maintain the integrity of the financial management and protects against potential abuses. Handling guardianship bank accounts requires exercising fiduciary duty.

Type of Guardianship	Responsibilities
Guardianship of the Person	Managing the overall welfare of the ward, including meeting basic needs and making decisions impacting their well-being.
Guardianship of the Estate	Managing the financial well-being of the ward, including handling a guardianship account and fulfilling financial responsibilities due to age, incapacity, or disability.

What It Means To Have Fiduciary Duty

Under Texas guardianship law, having a fiduciary responsibility means that a guardian is legally obligated to act in the best interests of their ward, prioritizing the ward’s needs and well-being above all else. This responsibility is profound and involves a high level of trust and duty. Here’s a deeper look into what this entails:

Acting in the Best Interest of the Ward

A fiduciary must always make decisions that benefit the ward, avoiding actions that could cause harm or represent a conflict of interest. The guardian must consider the ward’s personal preferences, needs, and overall welfare when making decisions about health care, living arrangements, financial investments, and other aspects of life. 

Fiduciaries must also avoid situations where their personal interests conflict with their duties to the ward. This includes not benefiting personally from the guardianship or making decisions that might benefit the guardian at the expense of the ward. This includes maintaining the ward’s confidentiality and protecting their right to privacy.

Managing Assets Carefully

Guardians are responsible for the careful management of the ward’s assets. This includes prudent investment of funds, protecting assets from loss, and ensuring that the ward’s financial needs are met. Financial decisions should be made with caution, and the guardian should seek professional advice when necessary.

Maintaining Good Records

Fiduciaries must keep detailed records of all transactions involving the ward’s assets. This includes maintaining receipts, bank statements, and other financial documents that can account for income and expenditures. These records are crucial for annual reporting to the court and for ensuring transparency.

Complying with Court Orders and Reporting Requirements

Guardians are required to comply with all court orders related to the guardianship. They must also meet reporting requirements, such as submitting annual accountings of the ward’s finances to the court. These reports help the court monitor the guardian’s actions and ensure that the guardian is fulfilling their fiduciary duties.

Legal Liability

If a guardian fails to meet their fiduciary responsibilities, they can be held legally liable for mismanagement or harm that comes to the ward as a result of their actions. The court can impose fines, require restitution, and even remove the guardian from their position.

In essence, fiduciary responsibility under Texas guardianship law embodies a commitment to act with integrity, diligence, and utmost good faith to safeguard and advance the interests of the ward. Guardians accepting this responsibility should be prepared to adhere strictly to legal standards and ethical practices to fulfill their role effectively.

Setting Up a Guardianship Bank Account

When a guardianship is established in Texas, setting up a dedicated bank account for managing the ward’s finances is a crucial step. This process is governed by specific legal requirements that protect the ward’s assets and ensure that all financial activities are conducted transparently and responsibly.

Initial Steps in Establishing a Guardianship Bank Account

The first step in establishing a guardianship bank account involves the guardian obtaining a formal appointment by the court. Once appointed, the guardian needs to obtain a certified copy of the guardianship order. This document proves the guardian’s authority to manage the financial affairs of the ward and is required by financial institutions to open the account.

Next, the guardian should create an inventory of all the ward’s assets. This inventory will not only aid in establishing the account but will also serve as a baseline for financial management and reporting responsibilities as mandated by Texas law.

Required Documentation and Verification

To set up a guardianship bank account, the guardian must provide several key pieces of documentation to the financial institution. These include:

• The certified copy of the guardianship order.
• Identification for both the guardian and the ward.
• Social Security numbers for both parties.
• Proof of address for the guardian.
• Any additional legal documents requested by the bank, which may include letters of guardianship and a taxpayer identification number if the ward’s assets are substantial.

The bank will verify these documents to confirm the guardian’s legal authority and responsibility. This verification is crucial to comply with both state law and banking regulations, which are designed to prevent fraud and misuse of the ward’s funds.

Choosing the Right Financial Institution

Selecting an appropriate financial institution is another important consideration. The guardian should compare different banks and credit unions to determine which offers the best services tailored to the needs of a guardianship account. Factors to consider include:

• Accessibility of the financial institution (both physical and online access).
• Fees associated with the guardianship account.
• Customer service quality, particularly in handling guardianship accounts.
• The bank’s experience with and accommodations for guardianship accounts, such as the ability to set transaction limits or alerts that cater to the specific needs of managing a guardianship.

The chosen institution should offer robust support and guidance, as guardians are responsible for managing the account in a way that complies with Texas guardianship laws and court requirements. Regular communication and support from the bank can facilitate effective management of the ward’s finances, helping to maintain the guardian’s compliance with legal obligations.

Setting up a guardianship bank account in Texas involves careful adherence to legal requirements and thoughtful consideration of the needs of the ward. By following these steps, guardians can establish a secure and compliant financial framework to manage the ward’s assets responsibly.

Guardianship Bank Account Rules

In Texas, managing a guardianship account involves meticulous oversight and adherence to specific legal standards. Guardians are entrusted with significant responsibilities to act in the best financial interests of their wards. The process is structured to promote transparency, accountability, and compliance with all relevant statutes.

Dos

When managing guardianship accounts, it’s important to adhere to structured and clear practices to ensure the financial interests and well-being of the ward are maintained. Here is a straightforward approach to handling these responsibilities:

• Establish a Separate Guardianship Checking Account: Open a checking account specifically for guardianship transactions. This account should be entirely separate from your personal accounts to avoid any mixing of funds. This separation helps in accurate record-keeping and is important for tax purposes.
• Use the Guardianship Account for All Expenses For The Ward: All payments related to the guardianship should be made from this account. Using checks from this account will provide a clear, reliable record of how funds are spent, whether for administrative costs, care, maintenance, or education of the ward.
• Maintain Accurate Records: Keep detailed records of all money received and spent. Using a spreadsheet or accounting software can help track these financial movements efficiently. A tracking form, provided for your convenience, can also be used to maintain these records.
• Consult with Your Attorney Regularly: If you have any questions about the financial management of the guardianship, it’s wise to consult your attorney. Your attorney will handle necessary legal documents such as the Inventory, Appraisement, and List of Claims, and prepare the Annual Accounting using the records you maintain.
• Prudent Management of Estate Assets: Manage the estate’s assets with care, skill, and caution, just as a careful person would. Follow the court’s directions or obtain court approval for significant decisions. For larger estates, it might be beneficial to consult with a Certified Public Accountant to help guide financial decisions.
• Stay Current on Bond Premiums: Ensure that any required bond premiums are paid on time. These bonds protect the estate from potential losses, and keeping these payments up to date is crucial.

By following these guidelines, you can effectively manage the guardianship account, fulfilling your duties responsibly and maintaining the trust bestowed upon you by the court.

Don’ts

When serving as a guardian, it is crucial to handle the responsibilities with diligence and integrity. Below are structured guidelines emphasizing what not to do with the ward’s property to maintain proper guardianship:

• Do Not Treat the Property as Your Own: Remember, the property you manage is not yours. It should be used exclusively for the care, maintenance, and education of the Ward, or as directed by the Court. Always keep the Ward’s property separate from your own. Failing to do this could be considered a criminal offense.
• Do Not Handle the Ward’s Property Without Court Approval: Do not spend, transfer, liquidate, sell, or distribute any of the Ward’s property or funds without obtaining Court approval, except in the following situations:
  • You may release a lien upon the maturity of the debt that the lien secures.
  • You may vote stocks by limited or general proxy.
  • You may pay calls and assessments.
  • You may insure the estate against liability in appropriate cases.
  • You may insure estate property against fire, theft, and other hazards.
  • You may pay taxes, court costs, and bond premiums.
• Do Not Delay in Reporting to the Court: Follow your attorney’s advice promptly regarding the signing and filing of papers with the Court. Delaying these actions can lead to complications and is against the guidelines of proper guardianship.

By strictly adhering to these “do not” directives, you ensure the responsible management of the ward’s assets, safeguarding their interests and adhering to legal requirements.

Consequences of Mismanagement or Fraud

Mismanagement or fraudulent handling of a guardianship bank account can lead to severe legal consequences. If a guardian uses the ward’s funds inappropriately, they can be held liable for reimbursement of the misused funds, additional fines, or even criminal charges depending on the severity of the misuse.

Texas courts actively monitor guardianship accounts and require regular reporting to detect any signs of financial mismanagement. If discrepancies or suspicious activities are identified, further investigation is initiated, which can lead to audits, suspension of the guardian’s duties, or legal action.

Guardians found guilty of fraud or severe mismanagement may be removed from their guardianship role, and legal proceedings may follow to protect the ward’s remaining assets and appoint a new guardian if necessary.

These legal restrictions and consequences are designed to protect vulnerable individuals under guardianship from financial abuse and to promote responsible management of their assets. Compliance with these rules is crucial for maintaining the trust placed in guardians by the courts and by society.

Court Oversight and Reporting Requirements

In Texas, the management of guardianship accounts is closely monitored by the courts to maintain integrity and protect the wards’ interests. 

As a guardian, there are specific actions you can take without needing to seek court approval. These include releasing a lien once the debt it secures is paid off, obtaining insurance for the estate to cover liabilities, and insuring estate property against risks like fire, theft, and other hazards. Additionally, you are allowed to pay taxes, court costs, and bond premiums directly.

However, most other actions you wish to take as a guardian will require the approval of the court. Common examples include buying or selling property, negotiating settlements or compromises regarding disputed property or claims, purchasing prepaid funeral benefits, and using estate funds for the education and maintenance of the ward’s spouse or dependents.

It is advisable to consult with an attorney before taking any actions that involve spending the estate’s funds without a court order. This step is crucial to ensure that all actions comply with the legal requirements and protect both your rights as a guardian and the interests of the ward.

Guardians are also required to adhere to specific reporting and accounting practices, providing transparency and facilitating court oversight.

Regular Reporting to the Court

Texas guardians are obligated to submit regular reports to the court detailing their management activities. These reports typically include a summary of financial transactions, the current status of the ward’s assets, and any significant changes in the ward’s financial situation or needs.  

Each year, guardians must provide a detailed accounting of the guardianship account which must itemize all income received and expenditures made on behalf of the ward, supported by documentary evidence such as receipts, invoices, and bank statements.

The financial statements should clearly show the opening balance, a detailed list of all transactions made during the period, and the closing balance. This transparency allows the court to review how the ward’s funds have been managed and whether the actions taken by the guardian align with the ward’s best interests and legal standards.

Handling Audits and Inspections

Guardians may also be subject to audits and inspections by the court or its designated representatives. These audits are intended to verify the accuracy of the reports submitted by the guardian and ensure compliance with all relevant laws and guidelines. Audits can be triggered by irregularities noted during routine reviews of annual accounts or may be conducted randomly to ensure compliance.

In the event of an audit, guardians are expected to provide all necessary documentation and cooperate fully with the auditors. Failure to comply or findings of mismanagement can lead to further legal action, including possible sanctions, fines, or the removal of the guardian.

Handling audits effectively requires thorough record-keeping, transparency, and a proactive approach to fulfilling all guardianship duties. It underscores the guardian’s responsibility to manage the ward’s assets diligently and in accordance with the law.

Overall, the court oversight and reporting requirements in Texas are designed to protect the interests of wards under guardianship. By adhering to these requirements, guardians help maintain a system of accountability that upholds the integrity of the guardianship system and ensures that the needs of the wards are met responsibly and legally. Working with a skilled attorney can assist in ensuring legal compliance and avoiding complications.

Guardianship Assistance from The Law Office of Whitney L. Thompson

Managing a guardianship account in Texas requires a deep understanding of the laws and an unwavering commitment to the ward’s best interests. It’s a responsibility that demands diligence and a proactive approach to legal compliance. At The Law Office of Whitney L. Thompson, our attorneys are equipped with the knowledge and experience needed to guide you through guardianship law. We are dedicated to helping you fulfill your duties effectively while adhering to all legal standards.

If you are overseeing a guardianship account and need legal assistance, we invite you to connect with us. Our Houston-based team is ready to provide you with the support and guidance necessary to manage your responsibilities confidently and correctly. Contact The Law Office of Whitney L. Thompson today at (281) 214-0173 to ensure that your guardianship management is as smooth and compliant as possible.

from The Law Office of Whitney L. Thompson, PLLC https://www.wthompsonlaw.com/guardianship-bank-account-rules/

Will Your Estate Go to Your Family? 4 Ways to Avoid Probate in Texas

When it comes to safeguarding your legacy and ensuring your assets are distributed according to your wishes, understanding the probate process—whether it’s probate with a will or without—is crucial. In Texas, probate can be a lengthy and complex legal procedure that your family may have to endure after your passing. However, with strategic planning, it is possible to bypass this process altogether, allowing your estate to transition smoothly to your loved ones without the need for court intervention.

Are you considering estate planning options to avoid probate and to protect your estate but unsure where to start? A knowledgeable probate attorney can offer invaluable assistance. At The Law Office of Whitney L. Thompson, our team of Houston probate lawyers may be able to help tailor an estate plan that fits your unique situation, giving you peace of mind that your assets will be secured for your family’s future. Don’t let the intricacies of probate law leave your loved ones in a lurch. Contact us today at (281) 214-0173 to take the next steps forward with confidence and a sense of security that your estate is passed on without unnecessary delay or expense.

Texas Probate: The Process

Probate is the legal process by which the court receives a decedent’s Will and Testament. This process allows the court to open an estate and appoint an administrator or executor. At the hearing, the court will determine whether or not the estate is subject to court scrutiny. After the hearing, the court will instruct the executor/administrator to collaborate with the lawyer in order to determine the assets and liabilities of the estate and distribute them to the beneficiaries. 

The probate process usually begins with the submission of the original will.  The court will then seek to validate the will. After the will is deemed valid, the probate court will name someone to manage the estate and supervise the probate proceedings. This role is referred to as the “independent executor”.

Most of the time, the executor is named in the original Will. Once an administrator is appointed, they must notify all creditors by providing evidence of the decedent’s death. The administrator will pay all valid claims, and then distribute any remaining property to the beneficiaries, according to the will.

In order to understand the probate process better, it is important to speak with an experienced probate attorney. A skilled estate planning lawyer may be able to help you go through the process smoothly and ensure that the estate is distributed according to the Will. Contact the Law Office of Whitney L. Thompson today to speak with an experienced probate lawyer.

Want to keep your estate out of court? In Texas, you have a few different options.

Joint Ownership of Property

One of the benefits of owning property jointly is that when one of the owners passes away, the other doesn’t have to worry about that piece of property going to someone else after probate. The catch is that you have to have “rights of survivorship,” or else the property could be subject to a court decision.

Texas has two forms of joint ownership that include these rights—joint tenancy and survivorship community property.

Joint tenancy is useful for couples (no marriage necessary) who want to own property together. Real estate, automobiles, bank accounts, and other property can be owned in a joint tenancy. To avoid probate in Texas with a joint tenancy, couples must sign a joint tenancy agreement.

Survivorship community property operates in much the same way, though it is exclusively for married couples.

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Bank Account Payable on Death Designation

Texas also allows bank account holders to designate someone to receive their money after they die. Known as a payable-on-death designation, this way of avoiding probate allows account holders to control their money while knowing that it won’t go through probate if they pass away.

Real Estate Transfer on Death Deed

Also known as beneficiary deeds, transfer-on-death deeds for real estate give home and business owners the option to transfer their real estate to someone else following their death. Property owners can revoke the deed or sell the property whenever they want as this deed does not take effect until they are deceased.

Living Trust

Living trusts are a great way to avoid probate in Texas. Nearly any sort of property can be protected by a trust, so it’s a great way for property owners to transfer houses, cars, bank accounts, and other valuable assets to their beneficiaries without getting the court involved. All you have to do is create the trust, name a successor trustee, and give yourself ownership of the property within the trust. After all that is done, the property will follow the rules of the trust, so be sure to speak to an experienced attorney before creating a living trust. Upon your death, the property will transfer to the successor trustee who can then distribute the property to your beneficiaries without going through probate.

What Happens if You Don’t Probate a Will in Texas?

Failing to probate a will in Texas can result in significant legal issues. If a will is not probated within four years of the individual’s death, the estate may be treated as though no will ever existed. In such cases, Texas intestacy laws determine how assets are distributed, which may not align with the deceased’s intended wishes. This could result in heirs receiving different portions than intended, potentially leading to disputes.

Without probate, the legal ownership of assets remains uncertain. Beneficiaries may face difficulties accessing bank accounts, transferring property, or managing other assets. Additionally, unresolved debts and taxes can accumulate, placing financial burdens on both the estate and its beneficiaries.

The probate process also plays a crucial role in settling creditors’ claims. If probate is avoided, creditors may pursue repayment from the estate or even the beneficiaries directly, leading to further complications. Probate ensures that these claims are handled properly, providing a structured way to settle debts.

However, there are ways to avoid probate while still ensuring your estate is managed efficiently. Using trusts, joint ownership, or designating beneficiaries for certain assets are common strategies that allow for direct transfers, bypassing the probate process. These steps can help your loved ones avoid legal complications and ensure that your wishes are fulfilled without the delays and challenges of probate.

Want to Avoid Probate in Texas? Get in Touch with Us Today.

It’s never too early to start estate planning. Contact us today so that we can create an estate plan that fits your needs and that helps you avoid probate in Texas.

Option	Description
Joint Ownership of Property	Property jointly owned with rights of survivorship.
Bank Account Payable on Death Designation	Designate a beneficiary for bank accounts.
Real Estate Transfer on Death Deed	Transfer real estate to someone upon death.
Living Trust	Create a trust to transfer assets to beneficiaries.

from The Law Office of Whitney L. Thompson, PLLC https://www.wthompsonlaw.com/will-your-estate-go-to-your-family-4-ways-to-avoid-probate-in-texas/

Considerations for Including a Family LLC in an Estate Plan

There is a structural difference between a partnership and a corporation when it comes to limited liability companies (LLCs). It is well known that this hybrid entity is beneficial for financial management, but an LLC can also be used as a powerful estate planning tool for similar reasons. Through estate planning, a Family LLC allows for asset transfers to children, grandchildren, and other family members at discounted rates, minimizing the burden of gift or estate taxes. In addition to protecting assets during your lifetime and keeping them within the family, an LLC can reduce the taxes you and your family owe.

If you’re considering including a Family LLC in your estate plan, The Law Office of Whitney L. Thompson, PLLC can help you handle this process with ease. Our experienced Houston estate planning attorney can guide you through the benefits, structure, and implementation of a Family LLC to protect your assets and ensure a seamless transition for future generations. Contact us today at (281) 214-0173 to discuss your options and secure your family’s financial future.

Why Do I Need a Family LLC?

All fifty states recognize a Family LLC as a legal entity, although each state has regulations governing its formation, running, and taxation. LLC owners (members) receive protection from personal liability in the event of lawsuits, debt, or other claims. This protection shelters personal property like a home, bank account, investments, and even vehicles. An LLC is subject to fewer state formalities and regulations than a corporation, so members can manage in nearly whatever manner they prefer.

A financial threshold defines the need for an LLC to help lower estate taxes if the estate is more than $12.06 million in 2022. If your estate is below this threshold, your estate planning attorney can help craft an estate plan that focuses on trusts to limit the probate process and estate taxes. While there is no legal reason you cannot create an LLC with fewer means, a trust will not require Family LLC’s initial and annual fees and more intensive reporting procedures.

Establishing an LLC in conjunction with your children permits you to:

• Maintain control over your assets while alive
• Effectively reduce estate taxes due to your children upon inheritance
• Distribute inheritance to your children with less gift tax during your lifetime

Family LLC vs. Trust

A Family LLC (limited liability company) and a trust are both tools used in estate planning, each serving unique purposes with distinct benefits. A Family LLC is a business structure often used to manage and control family-owned assets. It can help limit liability and provide flexibility in managing investments or real estate. Family members can be members or managers of the LLC, and it allows for strategic asset protection and tax benefits.

On the other hand, a trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries. Trusts are commonly used to bypass probate, maintain privacy, and safeguard assets from creditors. Trusts can be tailored to specific needs, such as providing for minors, ensuring long-term care for a loved one, or managing charitable donations. Unlike a Family LLC, a trust is not a business entity and does not involve business operations.

Choosing between a Family LLC and a trust depends on individual goals. If the primary aim is to manage family business assets and limit liability, a Family LLC may be more suitable. However, if the goal is to avoid probate and control how assets are distributed after death, a trust could be the better choice. Both options can complement each other in a comprehensive estate plan, depending on the family’s needs and objectives.

If you’re unsure whether a Family LLC or a trust is the right fit for your estate planning needs, the Houston estate planning attorneys at The Law Office of Whitney L. Thompson, PLLC can provide the guidance you need. We can help you understand the benefits of each option and tailor a plan that aligns with your goals to protect your assets and provide peace of mind for your family’s future. Contact us today to discuss your unique situation and start building a plan that works for you.

How is a Family LLC Structured?

A Family LLC is managed by the parents. The children or grandchildren hold shares in the LLC’s assets without management or voting rights. The parents can distribute, buy, sell, or trade the LLC’s assets but other members have restrictions regarding the sale of LLC shares, company withdrawal, or membership transfer. While gifting shares to younger members comes under the gift tax, significant benefits permit you to gift more while lowering the tax value of your estate.

Upon establishing a family LLC following your state’s legal process, you can transfer assets into the LLC. The management will decide how best to translate the market value of these assets into LLC units of value in much the same manner as stock in a corporation. You are now ready to transfer ownership of LLC units to your children or grandchildren as you desire. 

The value of units transferred to non-managing members becomes discounted because the LLC units become less marketable without management rights which is where tax benefits come into play. The manager of the LLC can often reduce the value of transferred units by as much as forty percent of their market value. In essence, non-managing members may receive an inheritance advance at a lower tax burden than otherwise due to their personal income taxes. Additionally, the overall value of your estate is reduced, lowering estate tax when you die.

What is Transferred to a Family LLC?

You can transfer almost any asset into a family LLC, but typically they include:

• Property – Titles to land and structures built on that land are transferable; however, check with any mortgage holder before such a transfer if you need their approval.
• Cash – It is permissible to transfer money from personal bank accounts into the LLC and distribute it among members.
• Personal possessions – You may transfer ownership of stocks, precious metals, automobiles, boats, jewelry, artwork, or other significant collections or belongings into the family LLC.

Upon the death of an LLC owner, some states require the dissolution of the LLC if there is no specific succession plan. A transfer to another individual upon death as defined in the operating agreement creates a joint tenancy membership, avoiding the LLC’s dissolution. This transfer builds a revocable trust to hold the LLC membership or a probate process if the LLC goes through court to determine a succession plan.

Assets Transferable to a Family LLC	Description
Property	Titles to land and structures built on that land are transferable, subject to approval from mortgage holders if necessary.
Cash	Money from personal bank accounts can be transferred into the LLC and distributed among members.
Personal Possessions	Ownership of stocks, precious metals, automobiles, boats, jewelry, artwork, or other significant collections or belongings can be transferred into the family LLC.

Does an LLC Go Through Probate?

A limited liability company (LLC) is a business structure that provides its members with limited liability protection and pass-through taxation, meaning the company itself is not taxed, but profits and losses are reported on the members’ personal tax returns. When it comes to probate, which is the legal process of distributing a deceased person’s assets, an LLC as an entity typically does not go through probate because it is considered a separate legal entity.

However, ownership interest in the LLC may be subject to probate under certain circumstances. If an LLC owner or member dies without an estate plan that includes provisions for their LLC interest, or if there is no operating agreement detailing the transfer of ownership upon death, that interest may go through probate.

To avoid probate of an LLC interest, LLC members can employ several strategies. These include creating a comprehensive estate plan, having a well-drafted LLC operating agreement that includes succession provisions, and establishing buy-sell agreements. These strategies can facilitate the smooth transfer of ownership interests to designated beneficiaries or remaining members, thereby bypassing the probate process.

It is crucial for LLC members to seek legal advice from a Houston estate planning attorney to establish the necessary documentation, ensuring that their interests are transferred according to their wishes without the need for probate. Contact The Law Office of Whitney L. Thompson, PLLC today to schedule a consultation.

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Advantages of Having a Family LLC in Estate Planning

You may have to pay a significant amount of estate tax upon your death if your estate is valued above the federal estate tax exemption. In 2021, this value is $11.7 million. However, by using a family LLC to transfer your business to your heirs, you may be able to avoid paying the said tax. 

The family LLC can help an owner lower their estate value below the threshold for owning federal estate taxes. One way that a family LLC can make this happen is by having the IRS help out by allowing discounts. Normally, people would want their assets to be valued at their maximum value. However, in the case of having an LLC, having less can mean better things. These discounts are meant to recognize that investors are usually not interested in family-owned businesses. With these discounts, it is possible for the owner of the estate to reach the threshold slower compared to when they move their assets at their actual values. This means that a family LLC will allow you to transfer more assets before your estate tax threshold is reached.

Family LLCs can also protect your family legacy, so you can ensure that the family business continues to be family-owned. A family LLC can also be used to limit who is allowed to transfer interests outside of family members.

Asset Protection with Your Family LLC

The key benefit of a business LLC is that the owner is not liable for the company’s debts. The Family LLC also provides the heirs’ protection from creditors in the event of a parent’s default, bankruptcy, or other family obligations. It is not permissible for creditors to go after these assets.

A Family LLC can be a powerful tool to manage your assets and pass them to your heirs. You can maintain control over your estate as an LLC manager while providing significant tax benefits to you and your children. Creating a Family LLC for estate planning purposes is complex and requires legal guidance from an experienced estate planning attorney and a financial advisor before formalizing your LLC plan. Contact The Law Office of Whitney L. Thompson, PLLC at our Houston office at (281) 214-0173 or our Bay City office at (979) 318-5079 today to schedule an appointment and discuss how we can assist you with your legal matters.

from The Law Office of Whitney L. Thompson, PLLC https://www.wthompsonlaw.com/considerations-for-including-a-family-llc-in-an-estate-plan/

Special Needs Guardianship: A Short Guide for Parents

When a child becomes an adult at age 18, they gain the right to make decisions about their life, their finances, and their health. In some cases, however, obtaining a special needs guardianship as their parent or caregiver is necessary for their well-being. Such a guardianship can control some or all of the legal decision making power for the adult ward.

As a family law attorney whose office handles guardianship and estate planning, I wanted to discuss this topic to help others understand how it works. If you think you may need to become a legal guardian for an adult with disabilities in the future or need to make that decision now, here are some considerations to think about. It is important to speak with an experienced Houston guardianship attorney to understand your guardianship duties before making any decisions for your child’s future. For personalized guidance tailored to your specific situation, contact The Law Office of Whitney L. Thompson today at (281) 214-0173 to schedule a consultation.

Does My Child Need a Special Needs Guardianship?

The first thing to decide is whether the person in question needs a guardian. It’s important to understand that a diagnosis of mental illness or cognitive disability does not automatically mean that someone needs another person to make decisions for them. There are two types of guardianship: guardianship of the person and guardianship of the estate. Guardianship of the person is when someone needs help making decisions about their living situation, healthcare, and other personal matters. Guardianship of the estate pertains to financial and legal matters, such as paying bills or hiring an attorney.

Most courts consider special needs guardianship a last resort and attempt to find alternatives that grant the individual some power to make their own decisions about their life. A limited guardianship granted by the courts only allows a guardian to make certain decisions.

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Types of Guardianship and Conservatorship

In guardianships and conservatorships, various types are designed to address the specific requirements of individuals, particularly those with special needs. The following are some key types:

• Guardian of the Person: This guardian assumes the responsibility of overseeing the well-being of an individual with special needs. Their duties encompass ensuring that the person receives appropriate care, supervision, and accommodation. Their role includes making decisions related to medical care, vocational planning, and education. However, this guardian is not required to live with the individual, provide daily supervision, or use personal funds for the individual’s care.
• Conservatorship or Guardian of the Estate: This role is necessary for individuals with special needs who cannot manage their finances and have income beyond benefit checks. The conservator assumes responsibility for managing the financial resources on behalf of the individual and is required to submit an annual accounting report detailing the status of their assets to the court.
• Limited Guardianship: This type of guardianship is specifically limited to particular decision-making areas, such as medical treatment, allowing the individual to make other life decisions independently. It is applied in a manner that is least restrictive for individuals with special needs.
• Temporary Guardian or Conservator: Often appointed during urgent situations when immediate decisions are required, temporary guardianship typically lasts up to 90 days. It is common for states to require a permanent guardianship request to be filed alongside a temporary appointment.
• Successor Guardian: This person, designated in legal documents by the parents of a child with special needs, is appointed to assume guardianship in the event of the parents’ death or inability to provide care. A special needs lawyer may recommend considering a co-guardianship arrangement with the successor guardian while the parents are still alive.

Selecting a guardian involves evaluating the individual’s best interests and welfare. For more comprehensive information and guidance, it is recommended to consult with a Houston guardianship attorney who can provide tailored advice based on the unique circumstances of the individual requiring guardianship or conservatorship. Contact The Law Office of Whitney L. Thompson for compassionate and knowledgeable assistance.

Applying For Special Needs Guardianship

Acquiring guardianship for a child with special needs is critical to safeguard their best interests and ensure proper care. However, the process of obtaining guardianship can vary in complexity depending on your specific circumstances. If you are considering seeking guardianship, it is important to understand the necessary steps involved in initiating the process. 

The first step is to have your child’s doctor fill out a Physician’s Certificate of Medical Examination, which outlines areas in which your child requires supervision, such as dressing, feeding, financial decision-making, and driving. You may also be required to demonstrate that you have explored less formal support options, such as joint-decision-making agreements or becoming a representative payee. 

After filing the guardianship petition in court, an attorney ad litem will be assigned by the judge to represent your child’s interests during the guardianship process. The attorney ad litem will assess whether guardianship is necessary or if other supports and services could work for your child. They will speak with your child to discuss guardianship law, your reasons for seeking guardianship, and your child’s wishes. The attorney ad litem may also review medical reports and speak with your child’s school, caregivers, and other family members. 

After completing their investigation, the attorney ad litem will submit a report to the court with their opinion on whether your child requires a guardian. If the judge grants guardianship, they will consider your child’s preferences when choosing a guardian. The court will provide the guardian with a letter of guardianship, which can be used to communicate with schools, banks, health insurance providers, doctors, and other necessary entities.

Alternatives to Special Needs Guardianship

Guardianship of an adult with cognitive disabilities or mental illness is not always the best option. Fortunately, you can choose one of the many alternatives to special needs guardianship that exist and even combine them in whatever way best serves the interest of the person being cared for. Alternatives to guardianship include:

• Creating a special needs trust
• Appointing a durable power of attorney
• Appointing a financial representative
• Hiring assisted living services

To figure out the option that is best for your situation, it’s critical to consult with a professional such as an attorney.

Power of Attorney Vs. Guardianship for Disabled Adults

When considering legal arrangements for disabled adults, understanding the distinction between Power of Attorney (POA) and guardianship is crucial. Both serve important roles in managing the affairs of individuals who may need assistance, but they operate in distinctly different ways with unique implications.

A Power of Attorney allows an individual, known as the “principal,” to appoint an “agent” or “attorney-in-fact” to make decisions on their behalf. This legal document is versatile, allowing the principal to specify what decisions the agent can make based on their personal needs and circumstances. The principal retains the ability to make decisions as long as they are capable, making POA a preferred choice for those who anticipate future incapacity but are currently able to participate in decision-making.

Guardianship, however, involves a court appointing a guardian to take responsibility for the personal and financial decisions of another person, referred to as the “ward.” This approach is generally pursued when the individual is unable to make safe or sound decisions due to mental or physical disabilities. Unlike POA, guardianship involves ongoing court involvement to oversee the guardian’s actions, providing an added layer of oversight and ensuring that decisions made on the ward’s behalf are in their best interests.

Choosing between POA and guardianship depends on the specific needs and capacity of the individual concerned. While guardianship offers comprehensive oversight for those who need it, a Power of Attorney provides a flexible and less intrusive alternative, allowing individuals to maintain greater control over their life decisions. This decision should be guided by thoughtful consideration of the individual’s current competencies and future needs, often in consultation with legal counsel. Contact The Law Office of Whitney L. Thompson today to speak with an experienced Houston guardianship attorney and make an informed decision.

How to Get a Special Needs Guardianship through the Courts

Obtaining a guardianship through the courts begins with a petition. The petition includes information about the person such as a description of their disability, their relationship to the proposed guardian, and the reasons that the courts should grant the guardianship.

The next step of the process is a hearing before a judge. During the hearing, the petitioner must prove that a guardianship is necessary, that no other alternatives are sufficient, that the petitioner is capable of carrying out the duties of a guardian, and that no one else has a better claim to become the person’s guardian (for instance, a parent or another close relative).

How Does Guardianship Work for an Adult With Special Needs?

Texas’ guardianship process is administered by the probate court. This degree of oversight is used to protect incapacitated or vulnerable adults (and minors in some cases) from abuse, neglect, and other difficulties that could arise if they have to make difficult decisions about their lives and finances.

When you apply for guardianship, you are asking the court to:

1. Remove some legal rights of the incapacitated or the ward;
2. Give jurisdiction over exercising those legal rights of the ward to another adult, the guardian.

Texas law defines legal incapacitation as a person who is unable to work because of a serious medical or mental condition and if they are unable to provide for their basic needs (i.e. Shelter, food, and clothing) and oversee their own physical and financial well-being. The primary duty of a guardian is to take care of the ward’s needs in this regard (depending on the type of guardianship).

Although guardianships may be necessary in cases where the person cannot manage their own affairs because of a disability or illness, they are clearly different from incapacity. Paraplegia or any other form of disability does not automatically make a person legally incapacitated.

A person can be incapacitated if they are unable to take care of their financial and physical needs. If a person is only partially incapacitated (e.g. when they can care for themselves but are unable to manage their estate and finances), guardianship rights may be limited.

When you seek guardianship, it is essential to first understand the abilities and needs of your child and how they are seen by law.

Working With a Skilled Houston Guardianship Attorney at The Law Office of Whitney L. Thompson

Due to the often-intricate nature of this process, obtaining a special needs guardianship can be challenging. It is recommended to consult with an attorney to make a plan for how to approach guardianship. At The Law Office of Whitney L. Thompson in Houston, we understand the significance of this responsibility and are committed to providing clear legal guidance through every step of the guardianship process. If you have any questions about special needs guardianship or its alternatives, don’t hesitate to contact us at (281) 214-0173 and schedule a consultation.

Key Steps in the Process of Applying for Special Needs Guardianship	Course of Action
Physician’s Certificate of Medical Examination	Have your child’s doctor complete this certificate outlining areas where your child requires supervision.
Explore Less Formal Support Options	Demonstrate that you’ve considered alternatives like joint-decision making agreements or representative payee.
File Guardianship Petition in Court	Initiate the process by filing the guardianship petition with the court.
Attorney Ad Litem’s Assessment	An attorney ad litem is assigned to assess your child’s needs and whether guardianship is necessary.
Attorney Ad Litem’s Investigation	The attorney ad litem investigates by speaking with your child, reviewing reports, and consulting caregivers.
Attorney Ad Litem’s Report to the Court	Submit a report to the court with the attorney ad litem’s opinion on the need for guardianship.
Judge Grants Guardianship	If approved, the judge may consider your child’s preferences when choosing a guardian.
Receive Letter of Guardianship	The guardian receives a letter of guardianship, enabling communication with relevant entities.

from The Law Office of Whitney L. Thompson, PLLC https://www.wthompsonlaw.com/special-needs-guardianship-a-short-guide-for-parents/