It’s safe to say that the process of dividing a loved one’s property is often contentious and difficult. It’s incredibly rare that these issues are resolved in a way that makes everyone happy. Family settlement agreements are one of those rare exceptions.
If your family is facing the division of a decedent’s estate without the guidelines of a satisfactory will, talking to a family law attorney may be a solution. Today, your Brownsville family law attorneys at the Law Offices of Phillippe And Associates will explain how and when these agreements are used.
What Is a Family Settlement Agreement?
A family settlement agreement, or FSA, is an agreement reached between all of the heirs of an estate regarding how it will be distributed amongst them. Oftentimes, families of a deceased with a poorly drafted or non-existent last testament use FSAs to resolve probate and distribution issues.
FSAs are unique in that they allow heirs to make the decision amongst themselves on how best to address insufficient provisions of a will without the interference of a court or judge. An FSA may be used in the following cases:
- A will that is unclear.
- A will that the heirs view as unfair.
- A will that distributes property in an inconvenient way.
- A will that has been found legally invalid.
- A will that doesn’t include the entirety of the decedent’s estate.
- Multiple, contradictory wills.
What Is the Process for Getting a Family Settlement Agreement?
The process of getting a family settlement agreement is up to you and your family. The key to a family settlement agreement is just that: agreement.
You and your loved ones are allowed to negotiate the settlement in any way that you see fit, including with or without the assistance of an attorney. However, seeking the assistance of a family law attorney may be necessary to make sure that the agreement is sufficient and lawful.
For example, imagine a father who passed away and is survived by two sons. Earlier in his life, the father had a disagreement with one of the sons and thus adjusted his will to give the bulk of his estate to his other son with whom he is still on good terms.
Then, later on, the two reconcile, but the father neglects to adjust his will. The two sons can come together to create a family settlement agreement that better reflects their father’s wishes.
Nevertheless, in Texas, it actually doesn’t matter whether or not the deceased would have agreed with the settlement in order for that settlement to be approved. Instead, the state considers all property of the deceased in possession of the heirs as soon as the deceased passes away. This means that even if the father and son in the above story had never reconciled, the two brothers still could have come to an agreement regarding a fairer split.
The Pros and Cons of Family Settlement Agreements
There are several pros that come with creating a family settlement agreement. Some of the benefits include:
- The ability to address a faulty or inappropriate will.
- A relatively fast process without many legal hurdles.
- A binding agreement not dependent on the court’s discretion, meaning an agreement made between heirs without legal interference.
- An agreement providing protection from future claims on the will.
However, with pros come some cons, and it’s worth noting that there are some pitfalls to a family settlement agreement that can make it a bad fit for your family:
- All heirs must participate and no heirs can be overruled by the others, therefore every heir must agree to the settlement.
- An adjustment of a will could lead to a gift tax on redistributed assets. Basically, if one person is willed an estate but instead agree to split it between all heirs, the law may consider that a gift from the initial inheritance and thus subject it to a gift tax.
Your Family Law Attorney in Brownsville
Losing a loved one is difficult enough, but unfortunately, the aftermath of such a loss can be nearly as challenging. Thankfully, there are a plethora of options available to you and your loved ones, including options that don’t involve a courtroom.
If you’ve lost a loved one either without a proper will or with a will that you and your loved ones feel is unfair, a family settlement agreement might just be the peaceful resolution you need.
Reach out to the Brownsville family law attorneys at the Law Offices of Phillippe and Associates to learn more about your options.