Family Settlement Agreements
Contested Probates Settled Easy with FSA in The Woodlands
Probate negotiations and contests are rarely easy; someone is almost always left unhappy in the end—unless, of course, a family settlement agreement is reached. Rather unique law in Texas law, a settlement agreement can be employed to simplify the probate process and ensure all heirs are satisfied when the provisions of a will are not up to the task.
When and why you may need an FSA
There are many reasons heirs to an estate may choose an FSA, including:
- A will which may be determined to be legallyinvalid
- A will that does not address the entire estate
- A poorly drafted or unclear will
- A will that divides property in a way heirsfeel is unfair
- A will that distributes property in aninconvenient way
- A will the heirs are not happy with
What is a family settlement agreement?
A family settlement agreement, or FSA, refers to an agreement reached by all heirs as to how the estate of a deceased individual should be divided and distributed. If a will is unclear, poorly executed, or doesn’t address the entirety of an estate, then an FSA can be utilized to help finalize the probate process.
Unlike many other forms of probate navigation, an FSA is often handled outside the bounds of the court. If heirs of a particular estate want to negotiate a settlement in which one family member receives the entire estate, then that is fully permitted and the court cannot overrule such an agreement.
How does it work?
Say, for example, a widower passes away and leaves 90% of his estate to his eldest son after a falling out with his younger child, to whom he only leaves 10%. Subsequently, the family reconciles, and both sons now have a positive relationship with their father—nevertheless the widower passes away before updating his will. The two sons can choose to sit down and reach an alternative arrangement, perhaps choosing to split the estate in half. These negotiations can take any form necessary and do not have a formal structure; participants can come to a resolution in any way necessary.
Once papers are drawn up detailing the results of the negotiations, and are signed by all parties, the agreement is filed with the court and becomes an enforceable, binding contract.
What are the pros and cons of FSAs?
As with many things in law, FSAs have upsides and downsides.
- The benefits of family settlements include:
- The opportunity to circumvent a poorly prepared or inappropriate will
- A fast and simple process without significantl egal hoops
- An agreement that cannot be disapproved by the court; FSAs are solely up to the heirs’ discretion
- The ability to provide protection for future claims against a will
Conversely,there are several disadvantages to consider:
- All heirs must take part; if any one heir does not want to participate, the remaining heirs cannot overrule his or her rights
- There may be gift tax implications for property willed to you; for example, if a widow is left her late husband’s home and she chooses instead to split the house with her four children, she may owe gift taxes on the transfer of the home
Consideringan FSA? Contact us today for a consultation!
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