KalishLawTexas' legal blog The Woodlands

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12 Sep 2011

Unmarried and Living Together in Texas? Protect Yourself!
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One of our recent posts dealt with common law marriage in Texas. If that applies to you, please see our post from September 6th as well).

This blog pertains to people who are living together in Texas but are unmarried under Texas law.

Living with another person can put you in a legally vulnerable position. Each situation is different. Here are some general guidelines to consider:
1. Don’t commingle your property without full disclosure. This means that you need to really know the financial situation of your partner before taking any risks. Does she owe credit card debts, back child support, student loans; have liens or judgments against her? Would it be beneficial to your credit rating to keep your finances totally separate?
2. Don’t commingle your property without a specific agreement. If you are going to commingle large amounts of money and property it is essential to have a written agreement between the two of you that would stand up in a court of law. This may offer some protection against third parties as well.
3. Don’t pay mortgages or loan payments or improve property without gaining some ownership interest in the property or having a written agreement about it, unless you don’t mind taking a risk that the payments will be viewed later as a “gift”.
4. Don’t give up your career to help in your partner’s business without pay and without a written agreement.
5. Don’t sign or cosign or agree to be responsible for your partner’s debts unless you know what you are getting into, specify repayment terms in writing, and have considered what the action may do to your credit rating.
6. If you decide to jointly own property (or pets) have a written agreement about what would happen if you split.
7. Discuss what would happen if one of you dies before the other. Would your partner get to stay in the home? Do not assume that your partner would be allowed to stay in the home or keep certain property because “s/he has been paying on it”, or “it partially belongs to her”. Have valid wills that specify what you want to happen, especially if you anticipate a fight from your other family members.
8. Be sure that your bank accounts and beneficiary designations have your partner listed as your beneficiary after you die, if that is what you intend. If you are unmarried, your partner does not automatically qualify as “surviving spouse”.
9. Have health care powers of attorney that allow you to speak for each other in the event of illness, if that is what you both desire. Since the two of you are not legally “family” to each other, you need these documents to avoid problems visiting, getting information, or making medical decisions in the event of a serious illness.
10. If the worst were to happen, and the relationship doesn’t make it, you will not have the protection of “divorce court”. A written contract may be the only legal grounds that you have to get in front of a judge and request fair treatment.
Even if you absolutely, 100% trust your partner now and forever, things are not totally in your partner’s control. For instance, the law does not give the same protections to unmarried couples as it does to married couples when it comes to illness, inheritance and community property ownership. Secondly, there may be threats from your partner’s creditors that put your property at risk. Thirdly, even with the best of intentions and between people who truly care about each other there are misunderstandings. And lastly, it is always better to have a well-thought out plan that can be adjusted later than it is to go in “blind” and hope everything is going to be OK.

A qualified attorney can help you assess your financial and personal situation and put together a cohabitation agreement or other contracts that will protect you both and help you to both live up to your promises and intentions. The attorneys at Kalish Law Office have experience in family law, debtor/creditor law, contract law and estate planning, so we can help you look at every aspect of your situation, inform you of your options and help you reach a decision on what you need.

Kalish Law Office www.kalishlawtexas.com 281-363-3700

The Woodlands, Texas. Since 1984

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17 May 2011

Where Should You Keep your Original Will and Powers of Attorney?
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The Will: If you have a signed original will, you will need to keep it in a safe place. The first impulse that most people have is to put it in a safe deposit box. This does preserve the document, however it may create a problem if there is no one who is authorized to access the safe deposit box. If you choose this option, it is best to name someone (in addition to your spouse) as a joint holder. Having someone in addition to your spouse ensures that there will be a trusted person of your choosing who can get to the contents quickly in case something happens to you and your spouse together. In the event that you do not have a joint holder, a court order will allow the will to be retrieved by a bank official, but this additional step will add unnecessary expense and delay. Remember, the purpose of drafting a will and powers of attorney in the first place are to allow YOU to be the one who is directing the course of events and to SIMPLIFY the process.

If you choose to keep your will at home, make sure that it is protected from fire or flood. A safe is a logical choice for many people, but make sure that the safe is well hidden and kept away from high heat (not in a hot attic) and the document is protected from flooding (not on the floor in the closet in the laundry room). It is a good idea for your executor and alternate executor to know the location of your will.

Filing the will in the county is not necessary, although some people still feel better doing so. If you choose this option you should make sure of two things: 1) the will should not contain full account numbers or private information that could be used in identity theft; and 2) if you update your will you need to file the updated will (or notice that you have updated the will) in order to avoid confusion later on.

Some attorneys do keep originals in their offices for their clients, while others do not. If a will is kept at an attorney’s office it can be difficult to retrieve if the attorney dies, moves, merges with another firm or retires. There also may be a risk of fire, flood or theft.

Don’t keep old, invalid wills around to confuse the situation. You can also notify a previous attorney who has drafted a will for you that you are requesting that your old file and copies of the (now) invalid will be destroyed.

Whether or not to give a copy of your will to your executor, trustee, alternates, and even your beneficiaries is an individual decision.

The Power of Attorney for day-to-day business; Durable Power of Attorney for Health Care

These documents must also be kept safe and dry, and out of harm’s way. However, it is even more crucial that they be found exactly when needed, with no delay. If you are injured and unable to speak for yourself, you want the “agent” you have named to be on the job immediately, coordinating your health care options and possibly taking care of financial concerns. For this reason, be sure that the person that you have named as your agent knows exactly where to find the originals of these documents. It is also a good idea for them to have a copy, because copies may be accepted in an emergency situation.

Kalish Law Office is located in The Woodlands Texas and assists clients in the areas of estate planning and probate. 281-363-3700 Since 1984.
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3 Mar 2011

The Risks of Refinancing Your Home With Your Spouse or Partner
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WARNING! Joining in the refinancing of a home previously owned by your spouse or significant other does not guarantee that you actually “own” part of the house.

Signing the Promissory Note DOES mean that you are legally responsible to pay the mortgage on the property. However, it does NOT mean that the property is automatically in your name, or that if your spouse dies you will automatically inherit all or part of the property.
Here is a specific example that could contain a nasty surprise waiting somewhere down the line:

Husband has three adult children by a previous marriage. He is divorced from Wife #1, and he owns his home, which is in his own name.   He then marries Wife #2.

Husband and Wife #2 evaluate their joint financial situation. They decide that it would be financially helpful to them if they were to refinance the home that they live in. They apply for, and are granted a new mortgage. It is at a better interest rate, especially since Wife #2 is a co-borrower. Husband and Wife #2 both sign the refinance agreement, but there is no deed filed in the county records which gives part ownership of the home to Wife #2.

The couple goes along happily with their life.   Then, Husband dies suddenly, and without a will.
Under Texas law, his prior children inherit the ownership of the home, since the deed is in his name and it is his separate property.

Wife #2 does have a “life estate”, which means that she is allowed to live in the same home that her stepchildren now own. Under the paperwork she signed with the mortgage company, she is still obligated to pay the mortgage, but the home is not in her name and she cannot pass the home or any portion of it on to her own descendants. If she chooses to just walk away from the home, she is leaving behind the money that she and her deceased husband have already put into it, and her stepchildren don’t have to compensate her.

This is a sobering set of facts, but unfortunately it is very common.

It is very unlikely that the Husband in the example wanted this to happen.   It is more likely that he wanted Wife #2 to own 100% of the house upon his death.

The situation could have been avoided in two ways. First of all, a properly drafted and filed deed would have protected Wife #2, because it would have given her immediate rights and ownership in the property. It would have legally given her her own portion, regardless of whether the Husband lived or died.

Secondly, the Husband could have had a valid will, which would have spelled out exactly what was to be done with his 50% upon his death.

It is important for everyone to understand all of the consequences of refinancing property. It is especially when dealing with second marriages, stepfamily issues, and non-traditional families. Couples who are in same-sex partnerships and cannot legally marry each other and couples who are unsure of their "common law" status or choose not to marry can be especially vulnerable to these problems.  A timely legal consult can avoid serious problems and unpleasant surprises later on.

Kalish Law Office has been representing clients in family law and real estate law since 1984. Located in The Woodlands, north of Houston, Texas. 281-363-3700. www.kalishlawtexas.com
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12 Oct 2010

Providing for Your Significant Other in Your Texas Will
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If you are in a committed, long-term relationship with someone, but aren’t legally married to that person, there are some things you should know about Texas law.

A person who dies without a will in Texas is said to have died “intestate” (without a testament).   There are certain laws that determine how the decedent’s property will be distributed.   These laws will be followed UNLESS the decedent has taken the time and trouble to create a valid will specifying otherwise.

This means that if you and your significant other are living together in a home, sharing possessions, sharing finances, and/or a business, you may suddenly find yourself “without” those things in your life that you have worked to build. Or, you may find yourself spending time and money trying to prove and protect what is yours.

Let’s take an example:   Joe has three adult children from his previous marriage. Joe has divorced Ann, his previous wife. Joe meets Sue, they fall in love and move in to Joe’s home. They do not legally marry, nor does their relationship qualify as a “common law marriage” in the state of Texas. Therefore, they are legally only two single persons living together.

The couple continues to live together for 17 years. During this time, they contribute time and energy to maintaining the home, commingle their finances, and share personal property.

After 17 years of togetherness, Joe falls ill and is unable to speak for himself or set his affairs in order. The first of many problems arises, because Sue does not have the legal authority to manage his health care.

Joe dies after a short illness. A few weeks after the funeral is over, one of Joe’s children calls Sue and tells her that they need to get together to “discuss Dad’s estate”. Still reeling from the emotional shock of losing the man she loves, Sue now worries about what will happen to her financially.

Under Texas law, since Joe died without a will, and was an unmarried person with children from a prior relationship, the law says that his property will be divided among his children (or their descendants, if one or more of his children has predeceased him.) Sue knows that Joe never intended her to have to deal with this stress. She knows that the deed to the home is in Joe’s name only and worries about where she will go if she has to move. She also doesn’t know how to prove which part of the furnishings and other personal property are “hers” and which are legally “his”.

This is a sad situation, but an avoidable one. For the couple living together who has either chosen not to marry, (or is legally unable to marry), this is a very real risk.

In a related example, suppose that Joe had never legally divorced Ann, his former wife, but had not lived with her or had any contact with her for 20 years.   Unfortunately for Sue, Ann would still be Joe’s legal wife at the time of Joe’s death and would be entitled to inherit as his surviving spouse. (In addition, the home and some other assets may belong partially to her anyway as “community property” of the marriage.)

Worry over inheritance can also arise in non-romantic relationships, for example, between roommates or close friends who live together in a platonic setting, look out for each other, and share assets and responsibilities. If no specific provisions are made between two people who rely on each other there may be problems for the survivor later on.
Moral of the story?   Don’t leave your loved one unprotected! Have a valid will that protects her/him! And, while you are at it, think about signing a Healthcare Power of Attorney so that your loved one will have “rights” in the healthcare setting should something unforeseen happen to you.

If you are in a vulnerable situation, make sure that you understand your legal rights and that you take the responsibility to plan for your own future.

A visit to an estate planning attorney can help you decide the best way to handle such situations and how to make sure that you leave a clear, legally valid will for your family and loved ones to follow when you can no longer speak for yourself.
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