Reecer Law Firm

Texas Estate Planning & Probate Law

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The Corporate Transparency Act: What Do I Need To Know?

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In September 2022, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued its Final Rule under the Corporate Transparency Act (CTA) updating the U.S. anti-money laundering laws. The Rule has new reporting requirements so that the beneficial owners of businesses will be revealed.

The Rule goes into effect on January 1, 2024. There are different deadlines for business entities depending on the date they were established. There are long lists of types of business entities that must report as well as a list of 23 categories of businesses that are exempt from reporting.

The new CTA Final Rule is long, nearly 200 pages of text, and complicated. There are stiff criminal and civil penalties for violating the Rule. Business owners who violate the Rule are subject to spending up to two years in prison and a fine of $500 per day for every day FinCEN determines the business was in violation.

What is the Final Rule and What Do I Need to Know

The best overview of the Final Rule comes from FinCEN:

The Corporate Transparency Act

“The Corporate Transparency Act (CTA) establishes uniform beneficial ownership information reporting requirements for certain types of corporations, limited liability companies, and other similar entities created in or registered to do business in the United States. The CTA authorizes FinCEN to collect that information and disclose it to authorized government authorities and financial institutions, subject to effective safeguards and controls.”

The purpose of the Final Rule of the CTA is to “help prevent criminals, terrorists, proliferators, and corrupt oligarchs from hiding illicit money or other property in the United States.”

The main thing you need to know is what “beneficial owner” means, what are the reporting requirements, and how to make sure your business is in compliance.

Who is a Beneficial Owner?

According to the Rule, a beneficial owner is defined as “any individual who, directly or indirectly, either exercises substantial control over such reporting company or owns or controls at least 25 percent of the ownership interest of such reporting company.” This includes any senior officer of a business entity who has “substantial control” over important decisions.

Determining whether a person is a beneficial owner is not an easy task. For example, a person may be considered to have substantial control if:

  • They serve as a senior officer in the reporting company.
  • Have authority over the appointment or removal of senior officers.

Or a majority of the board has “substantial influence of important decisions. Or the person or board members have “any other form of substantial control over a reporting company.

There are also exceptions. For example, minor children are not beneficial owners if their parent or guardian is identified as a beneficial owner. Heirs of the beneficial owners and creditors are not beneficial owners.

What are “Reporting Companies,” When, and How, Do They Report?

What is a reporting company? If the business structure is one that is “created by filing a document with “a secretary of state or similar state or tribal office” it is one that is also required to report the beneficial owners. This includes corporations, limited liability companies, and more.

There is also a list of 23 categories of businesses that are exempt, such as banks and public utilities.

When do they report? Reporting requirements go into effect beginning January 1, 2024. If the business was registered prior to January 1, 2024, its first reporting date is January 1, 2025. If the business is created after January 1, 2024, its first reporting date is within 30 calendar days after its creation or registration.

How do they report? FinCEN is creating forms for reporting companies to use for reporting beneficial ownership information. The forms are expected to be available far in advance of January 1, 2024. They will be published in the Federal Register.

Contact The Reecer Law Firm PLLC for Assistance

You need to start preparing now to comply with the Final Rule by its effective date of January 1, 2024. It requires determining if your entity is one that must report, if so, you must identify the beneficial owners, and more. You must establish policies to monitor any change in ownership and changes to your reporting status.

If you are involved in mergers and acquisitions, your due diligence will now include making sure the target companies have met their reporting requirements.

The risk of being swept up in money-laundering investigations is great for those who have done no wrong but simply failed to comply with their reporting requirements. You can avoid that risk by using the resources of the Reecer Law Firm, PLLC.

The founder and owner of The Reecer Law Firm, Dena Reecer is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. Contact us for more information about how our attorneys can help you.

What If Someone Dies Without a Will In Texas?

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If a person dies in any state without a will, they are said to have died intestate. Since they died without leaving written instructions about how they want their assets distributed, the assets will be distributed according to the Texas Estates Code.

The law requires the court to appoint an executor of the estate. Beneficiaries have no say in who this executor will be. Also, the law lays out clearly how the assets of someone who dies without a will are distributed. This law cannot be challenged.

Texas Property Distribution Law When Someone Dies Intestate

An overview of who inherits the assets of someone who dies intestate is:

Texas code on wills
  • All assets go to a surviving spouse if there are no children.
  • If there are surviving children but no spouse, the assets are divided among the children.
  • If there is a surviving spouse and children, and the children are the children of the surviving spouse and the decedent (the one who died), the spouse inherits all community property, one-third of the decedent’s separate property, and the lifetime use of any separately owned real estate. All other assets are divided equally among the couple’s surviving children.

This is not a comprehensive list. It continues with rules for those related to the decedent depending on the level of the relationship of survivors. There are additional distribution laws that can make distribution complicated, for example, if the decedent has a surviving spouse, but children with former spouses or from other relationships.

The list continues and depending on whether there are surviving heirs in one category, the decedent’s estate will continue down several levels until a living person is found. The order of intestate succession is spouse, children, parents, siblings, cousins, nieces, and nephews, etc.

Property that is Exempted from Laws Governing Intestate Asset Distribution

Some property is exempt from intestate distribution laws:

  • Proceeds of life insurance. These go immediately to the named beneficiary.
  • Property owned in joint tenancy. It goes to the surviving joint tenant.
  • Retirement funds. They go to the named beneficiary.
  • Property in a living trust.
  • Bank account funds when there is a payable-on-death provision for funds to be transferred to the named beneficiary.

Contact the Reecer Law Firm PLLC for Assistance

Dena Reecer is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. She is also the founder and owner of the Reecer Law Firm PLLC. If you are an heir of someone who died intestate or are the court-appointed executor of an estate or personal representative, contact the law firm for more information about how the attorneys can help you.

When Do I Have To Probate A Will?

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It is possible for someone with a large estate to die without a will. This happens when the decedent made other arrangements for the transfer of property, such as establishing trusts, naming beneficiaries on retirement accounts and insurance policies, or owning property with another person as joint tenants with rights of survivorship.

If there is a will, that will must be admitted to probate in order for the assets named in the will to be transferred to the named beneficiaries.

When Do I Have to Probate a Will in Texas?

Texas law requires that when a person dies with a will, that will must be admitted to probate within four years of the person’s death. The will usually names an executor of the estate, and the executor is the one who is charged with filing the will within the time frame established by law.

If the executor fails to file the will within four years of the decedent’s death, the assets may then be distributed according to the laws of intestacy, which govern asset distribution when there is no will.

Overview of the Probate Process

The will must be submitted with a probate application to the probate court in the county where the decedent died. A court hearing will be scheduled to take place after the probate application and will are submitted to the court. The court clerk will give notice that the will has been filed.

At the hearing, if no one has come forward to contest the will, the court will determine if the will is valid and appoint an executor, which is generally the person named in the will.

If the estate is small, there are few assets, and no one contests the will, the probate process can be completed in about six months. For larger estates, and if someone contests the will, the process can take more than a year.

Contact the Reecer Law Firm PLLC for Assistance

Dena Reecer, founder and owner of the Reecer Law Firm PLLC, is one of a few Texas attorneys who are Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. Contact the firm for more information about having a loved one’s will submitted to probate so the assets can be distributed according to the decedent’s wishes.

Can I Change My Irrevocable Trust?

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If you have an irrevocable trust, you are familiar with the advantages. For example, you most likely know that the trust assets cannot be reached by creditors or court judgments. There are also tax advantages to you during your lifetime and the assets pass to your named beneficiaries without going through the probate process.

Irrevocable Trust

All this works well for you until you want to make changes to the irrevocable trust. The word irrevocable means “not able to be changed.” While that is technically true, with the assistance of an experienced trust attorney, you may be able to make the modifications you want.

Begin by Evaluating the Trust Document

Before using any strategy to make changes to the irrevocable trust, evaluate the trust document itself. Look at:

  • The parties to the trust. Are they alive and competent? Can they agree with the changes you propose making?
  • The trust provisions. Has there ever been changes to it? What law governs the trust and is there a provision within it about changing the terms?
  • The trust assets. What is their value? Is stock included? Life insurance? Real estate?
  • The tax status of the trust.

Ways to Change an Irrevocable Trust

All methods of change are complicated and take the skill of a knowledgeable and experienced trust attorney. Some examples are:

  • Judicial modification. You must submit your proposed changes to the court and the reasons behind your modification request. If the court agrees, it will issue an order allowing the modification.
  • Decanting. This means that you move assets from the irrevocable trust into an entirely new trust.
  • Sale of trust assets. An asset may be sold to another trust or the trust can be merged with another trust that has more favorable terms.

Each method has its own requirements that must be met to be certain the changes comply with Texas law.

Contact Wills and Trusts Attorneys at The Reecer Law Firm, P.L.L.C.

Our attorneys at The Reecer Law Firm, P.L.L.C., will evaluate your irrevocable trust document to determine if changes can be made and, if so, the best method to make the changes you desire.

Our founder, Dena A. Reecer, is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. She is one of just a few attorneys who specialize in the preparation of wills and trusts. You can contact our firm online or call us at 940-382-3168 to schedule a consultation.

What Are the Duties of an Executor of an Estate?

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If you are named in a will as the executor of an estate, Texas law imposes upon you certain responsibilities. One of those responsibilities is to hire an attorney to guide you through the process. This is because as executor, you represent the interests of both beneficiaries and creditors, and only a licensed attorney can represent the interest of others.

There are exceptions to this rule which your attorney will discuss with you. Briefly, one exception is if you are the sole beneficiary.

Responsibilities of the Executor of an Estate

Specific responsibilities imposed by Texas law include:

Notifying the beneficiaries of the decedent’s death. If they cannot easily be located, you may need to put a notice of death in newspapers.

Locating and inventorying assets. This includes locating:

  • Personal property such as vehicles, boats, checking accounts, jewelry, antiques, safe deposit box contents, and others.
  • Financial holdings. Retirement accounts, stocks and bonds, investment accounts.
  • Real estate the decedent owned in Texas and any real estate the decedent owned in another state.
  • Businesses owned by decedent or owned in partnership with others.

You must inventory the assets and the value each asset at the time of the decedent’s death. This document must usually be filed with the court.

Paying decedent’s debts and taxes. All creditors must be given notice of the death and the opening of probate. Creditors can file a claim and the executor has a duty to verify it is a legitimate debt. If so the debt must be paid.

Tax returns must be filed, the Social Security Administration notified of the death, and all credit cards must be canceled.

You also have a duty to identify estate property that is exempt from creditors and set it aside for the beneficiaries.

Recognizing priority rights. Spouses and minor children have rights which may include payment of an allowance while the estate is being probated.

Distribution of assets. After all other duties have been fulfilled, you then distribute the assets to the beneficiaries according to the terms of the will.

In fulfilling your duties as an executor, keep in mind at every step of the way, you have a fiduciary duty to preserve assets and to act always in the best interest and with loyalty to the beneficiaries.

Contact The Reecer Law Firm PLLC for Assistance

This is just an overview of the responsibilities of an executor. Depending on the will and the size of the estate, there may be other responsibilities you must fulfill as the executor.

Dena Reecer, founder and owner of The Reecer Law Firm PLLC, is one of just a few Texas attorneys who are Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. Contact the firm for more information about your responsibilities as the executor of an estate.

Do I Have to Hire an Attorney to Probate a Will?

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Probate is the process where a decedent’s will is submitted to the probate court that first determines the validity of the will. Then, the court oversees the payments to creditors and makes sure the decedent’s wishes, as expressed in the will, are followed. Texas law specifically provides that “a will is not effective to prove title to, or the right to possession of, any property disposed of by the will until the will is admitted to probate.”

Why You May Need an Attorney to Probate a Will

Texas courts are divided. Texas courts are divided on the issues of whether an executor of an estate or personal representative can represent themselves or whether only an attorney can represent the estate. In most Texas courts, you need an attorney.

Only an attorney can represent the interests of others. You need an attorney because Texas law also prohibits a non-attorney from representing the interests of anyone in court but themselves. A will generally has beneficiaries other than the executor or personal representative. If the executor or personal representative files pleadings on behalf of the beneficiaries without the assistance of counsel, it amounts to the practice of law without a license, which is against Texas law.

Probate can be a complicated process. Additionally, probate can be a complicated process that can take up to a year or more to complete. If anyone contests the will, complex legal issues will be involved that require the attention of an experienced probate attorney who knows how to defend the will against challenges by beneficiaries or by those who were left out of the will and challenge that omission in court, believing the omission was a mistake.

In a routine probate, with no issues of validity and with no challenges by beneficiaries, there are still complex legal terms and procedures that must be followed that are difficult for a non-attorney to understand and follow.

Contact the Reecer Law Firm PLLC for Assistance

Dena Reecer, founder and owner of the Reecer Law Firm PLLC, is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. If you are the executor of an estate or personal representative, contact the law firm for more information about how the attorneys can help you in probating a will.