Dallas, TX Estate Planning Attorney for Cash Holdings

Whether it’s in a bank account, in a safe, or in a wallet, cash is the most clear-cut type of asset in an estate. It’s worth exactly what an executor counts, and releasing it to beneficiaries is as simple as a handover or electronic transfer. Without planning, however, the cash you leave behind could still be subject to taxes or court proceedings.

The Dallas-Fort Worth estate planning attorneys of Staubus and Randall provide qualified estate planning and protection services. Our team has over a century of combined experience designing personalized solutions to minimize tax liability, protect your property, and provide for the people and causes you love. Contact our Dallas office today at 214-691-3411 to schedule a consultation.

Cash Holdings With a Will

If you plan your estate using a will, you can express your wishes about cash holdings directly. You can set aside a specific amount for each beneficiary or divide it equally among all of them. While many testators distribute their cash with “no strings attached,” some require their beneficiaries to meet certain conditions before they receive their share of the money, such as reaching a certain age or getting married. Others will place funds into a “testamentary trust” for a specific purpose, like paying for college or buying a house.

Remember that writing a will doesn’t shield your estate from court proceedings. Before a court can enforce a will, a judge must ensure that it was written following legal requirements. Further, anyone interested in the estate can contest a will’s legality if they can prove they have a proper reason, called “grounds.” Some grounds that Texas courts allow include:

• Improper execution – Someone may claim improper execution if a required piece of the will, such as a signature, is missing.
• Undue influence – Someone coerced or manipulated the testator into producing the will or dividing assets a certain way.
• Fraud – Someone misled the testator into signing a will.
• Lack of testamentary capacity – The testator was not mentally able to sign the will, or they could not understand its nature, function, or ramifications when they signed it.

An attorney can help write your will to minimize the chances of a challenge, then defend your wishes for your cash holdings once the will enters probate.

Cash Holdings In a Trust

With a trust, you can protect cash holdings in an estate while avoiding court proceedings. They break down into two common types:

• Revocable trusts – Revocable trusts are also called “living trusts.” You have complete control of the trust while you’re alive and can remove cash or change how you’d like it to be distributed at any time. After you pass away, the trustee you appoint is responsible for distributing the money as you wish.
• Irrevocable trusts – Once you put cash or other items into an irrevocable trust, you cannot remove or change it. Since you are transferring ownership of the assets in an irrevocable trust, you are reducing the size of your estate. In turn, your potential tax liability decreases.

No matter if you set up a revocable trust, an irrevocable trust, or multiple different trusts, the trustee is responsible for enforcing the terms according to your wishes. Trust proceedings are private, and where a creditor could claim the right to a share of your cash with a will, your lawyer can help you establish mechanisms to protect it in a trust.

Finally, while trusts are powerful tools, they shouldn’t be the only piece of an estate plan. If a trust forms your entire plan, any assets still in your name upon your death could be subject to probate proceedings. Therefore, your lawyer may recommend creating a “pour-over will” that transfers your residual cash and other assets into your trust.

Cash Holdings and Intestacy

In Texas, “intestacy” happens when someone passes away without a will or trust. Intestacy proceedings generally involve the following steps:

• Identifying heirs – Heirs are usually a decedent’s surviving spouse, children, parents, or siblings. For an heir to be eligible, they must outlive the decedent by 120 hours. If the court can’t find a next of kin, even within either side of the decedent’s extended family, then the state becomes the sole heir.
• Appointing an administrator – The court will appoint an administrator to handle the practical business of distributing the decedent’s property. Any “interested party” may petition the court for the job, though a court will likely want all heirs to agree on an administrator before it makes a final decision.
• Distributing assets – Succession laws in the Texas Estate Code define who gets what share of the decedent’s estate according to the mix of eligible heirs. The administrator must faithfully distribute the property according to the court’s orders. If any disputes arise between the heirs, the court holds the ultimate authority to settle them.

Cash Holdings and Taxes

Just as Texas doesn’t have a personal income tax, they also don’t levy an estate tax at the state level. However, your representative could still have to pay federal estate or gift taxes on your behalf.

Each year, the IRS sets a new filing threshold for estate taxes, adjusted for inflation. You can find the most current amount on the agency’s website.

If the total value of your estate and taxable gifts is below the filing threshold at the time of your death, your estate is exempt from taxes. However, if it exceeds the threshold at that time, your executor must file Forms 706 (estate tax) or 709 (gift tax,) making any required payments before distributing assets to your beneficiaries.

To determine if you might owe money, your lawyer will calculate the fair market value of the items in your estate, then subtract deductions such as debts, charitable contributions, and assets that go to a spouse. They’ll also consider any financial gifts you made throughout your life, subtracting a “unified credit” amount that is exempt. If your estate exceeds the filing threshold, they could help you downsize it to minimize liability.

Contact the Dallas Estate Planning Team at Staubus and Randall Today

Do you have questions about cash holdings in your estate? Let the Dallas estate litigation attorneys of Staubus and Randall guide you toward a prudent, comprehensive, and robust estate plan. Call us today at 214-691-3411 to speak with one of our team members.