Which Hat Am I Wearing?

I wear a lot of hats.  I don’t mean I have lots of responsibilities, I mean I wear. a. lot. of. hats.  Three fedoras, two driving caps, two Panamas, two cowboy hats, a couple of baseball caps, one Air Force ORF cap – that’s what happens when you spend too many years in the tropics and South Texas without enough (or any) sunscreen.  I’ve had enough stuff cut, frozen and burned off my face and scalp to last a lifetime.

However, I – and probably you as well – wear a lot of hats in the colloquial sense as well.  So do a lot of our clients.  For example,

In a business formation, a client can be –
– a partner, member, shareholder, AND
– an officer, director, employee, manager

In estate planning and/or probate, a client can be all of the following:
– a beneficiary,
– an executor,
– a trustee,
-a guardian,
– an agent under power of attorney (financial or medical)

Keeping in mind which hat you have on can be critical if, for example, you own a business and you’re buying stuff for your personal use but using a company credit card to do so – if it’s a forgot-my-personal-card-and-need-this-now situation, make sure you turn in the receipt and reimburse the company for what you spent.  And make sure it’s not a regular occurrence – you’re vulnerable to a claim that you’re using the company as your personal piggy-bank and somebody suing your company could “pierce the corporate veil” and come after your personal assets.

Here’s another one we see pretty regularly: “My dad died last week, but I have his power of attorney so I’m going to sell his car”.  Nope.  Your agent-under-power-of-attorney hat goes up in smoke when the person who gave it to you (the “principal”) dies.  If you’re also the executor under the will, you can use that hat AFTER the probate court issues letters testamentary to you, but not before.  If you also have a beneficiary hat on your hat rack, you could be liable under a legal concept called “self-dealing” if you distribute money to yourself with your executor hat on, but don’t distribute to other beneficiaries.

A related hat issue is when you use your mom’s financial POA to transfer property from her to yourself.  No can do, Podnah – that’s also a breach of fiduciary duty.

So, hats are cool (or warm, depending), but each carries both rights and responsibilities.  Make sure you’re wearing the right hat for the activity in which you are engaging!

As always, the above is legal information, not legal advice, and it’s based on Texas law because I’m a Texas lawyer.  If you have questions about your various hats, talk with an attorney experienced in your area of hat-wearing!

Change the Facts, Change the Answer…

My dad was my law partner for over 20 years, and one of his favorite (!) trial stories was the client who, in the middle of cross-examination by the opposing attorney, began a response with, “I ain’t even told my lawyer this yet, but…”.  I’ve also had the dubious pleasure of having a client say, “Well, I just didn’t think you needed to know that!”  at precisely the wrong moment – you know, just AFTER the nick of time.  Like the lady who told my legal assistant a few weeks ago, just before we were going to do a house call to execute a will for her dying father, “Oh, there IS another daughter out there, but we didn’t think that was important.”

I do some advising for people who need security clearances and are filling out the (exhausting) form, an eQIP or SF86.  This is an extensive background check and relies on the information the applicant provides.  My advice is to ALWAYS err on the side of disclosure, because it’s easier to get the bad stuff out there and have a chance to explain it than to have to explain it AND explain why you didn’t mention it earlier.

Try as we might, attorneys sometimes just can’t get clients to supply all the facts.  Questionnaires get partially completed, emails or calls go unreturned, sometimes the client is just too cagey for his or her own good.  And sometimes the attorney doesn’t ask the right questions.

Here’s a tip if you ever need the help of a lawyer: spill it!  Insufficient facts make bad solutions. If there’s something you think might hurt your case or crimp your plan, TELL ME!  If at the end of a conversation with the lawyer who’s doing your estate planning there’s still something niggling at the back of your brain, bring it up!  If you have questions about how your draft will reads, ASK. If it’s nothing to worry about, I’ll tell you.  If it does matter, we’ve identified it and can deal with it.  Remember, the attorney-client relationship is confidential and privileged, so even if it’s something shocking, with a very few exceptions, I can’t tell anybody anyway.  Sometimes the worst thing you can do to yourself is keep it to yourself.

As always, the above is legal information, not legal advice, and is based on Texas law because I’m a Texas lawyer.  If you need the help of an attorney, make sure you choose one who has experience in that area of law and is willing to answer your questions.  And then SPILL IT!


For Want of a Staple, A Probate Was Lost

Sounds silly, doesn’t it?  It’s just a staple, after all.  What does it matter if you remove it to make a copy?

Believe it or not, a number of probate cases have been turned on their heads because somebody took out the staples on an original will, presumably just to make a copy.  Why?  Because probate courts have ruled that an original will that has multiple staple holes in it is evidence that 1) the will has been tampered with (pages removed and replaced), or 2) the testator (person who signed the will) intended to revoke the will by taking it apart.

Staple holes aren’t the only seemingly innocuous things that could invalidate a will, either: writing on an original will, especially if you’ve lined through a part and/or written something different in the margin, may well invalidate that will – again, because it is seen as a revocation of the original will and an attempt to make a new one without “the formalities of law”.  That’s one of the reasons we always give the client a copy of every estate planning document we prepare – for making changes that don’t invalidate the original.

There’s nothing more frustrating for a probate attorney than having to tell the client that her husband’s will won’t be accepted for probate because he wrote on it.  The differences in who gets your stuff between testate (with a will) and intestate (without one) in Texas can be significant.  You paid good money for those estate planning documents, make sure you care for them properly.