Articles Archives - The Blum Firm

Common Questions About the Texas Probate Process

August 26, 2026

1. How long does it take to go through the probate process in Texas?

In Texas, the probate process typically takes anywhere from about four months to well over a year, depending on whether the decedent died with a will (testate) or without a will (intestate). The timeline may also be affected by the county in which the probate is filed—larger counties often have heavier caseloads—and whether all heirs or beneficiaries agree on how the matter can proceed. Our office is prepared to guide you through the process under all of the varying circumstances and is committed to handling your case as efficiently as possible during this difficult time.

2. What are “letters testamentary?”

Letters Testamentary (issued when the decedent had a will) and Letters of Administration (issued when the decedent did not have a will) are the official document issued by the Court once an Executor or Administrator has qualified as the Estate’s Representative confirming the authority of the Executor or Administrator to act on behalf of the estate. This document is frequently required by financial institutions, title companies, and the like to administer the decedent’s assets. The “Letters” allow the appointed individual to stand in the shoes of the Decedent for the purpose of collecting, managing, and distributing estate assets to the appropriate heirs or beneficiaries.

3. What if my loved one died without a will?

If your loved one died without a will (intestate), the first step in administering the estate is filing an Application for Determination of Heirship. Texas law establishes who the legal heirs are in the absence of a will, and all such individuals must be identified in the application and served with notice of the proceeding.

The Court will appoint an Attorney Ad Litem—a neutral third-party attorney—to investigate the family history through records such as birth, death, and marriage certificates, and by obtaining testimony from two disinterested witnesses provided by the applicant. This process ensures that the identified heirs are accurate.

Once heirship is determined, the Court may appoint an Administrator to collect and distribute the estate assets. If all heirs agree on the proposed Administrator, the process is typically simpler and more cost-effective, and the Court may permit an independent administration with minimal oversight. If there is no agreement, the Court will require a dependent administration, meaning the Administrator must seek Court approval for each action.

Our firm has extensive experience handling intestate estates and is prepared to guide you through each step of the process.

4. Is there a deadline for probating a will in Texas?

In Texas, a will must generally be admitted to probate within four years of the decedent’s death. Limited exceptions to this rule exist, but their application is within the Court’s discretion. Our office is available to assist you through this process and to evaluate the specific circumstances of your case in order to determine the most appropriate course of action.

5. What if I don’t have the original will but can only locate a copy of the will?

Probating a will based on a photocopy presents additional challenges; however, our firm routinely handles these matters and will guide you through each step. When the original will cannot be located, all legal heirs who would inherit in its absence must receive formal notice that the copy is being offered for probate. In Texas, there is also an automatic presumption that a missing original will was revoked by the decedent. The burden therefore rests on the proponent to demonstrate, to the Court’s satisfaction, that the will was not revoked.

Written by Kaitlin R. Goddard

Associate

Common Questions About the Texas Probate Process Read More »

The Trust Fix Most UHNW Families Are Told to Rely On — and an Alternative Worth a Second Look

August 19, 2026

A few weeks ago I spent the day at an educational forum over barbecue, hosted by a national network of elite firms and financial professionals who serve high-income and business-owner clients. The topic on the table was complex private placement life insurance strategies — PPLI, for short — and why more of our mutual UHNW clients should be looking at it.

By the time the brisket was gone, I realized the more interesting conversation wasn’t really about PPLI at all. It was about the tool it’s quietly competing with: the swap power. So let’s talk about that.

This one’s for the business owners and investors I work with most — people who’ve built or sold a business, funded a trust years ago with appreciated stock or a piece of that business, and are now sitting on a lot more built-in gain than they expected. If that’s you, or it will be you soon, keep reading. The swap power still has its place in the toolkit. But it shouldn’t be the only tool you’re offered.

If you’ve built real wealth, you’ve met the “swap power”

If you’ve worked with an experiencedestate planning lawyer, you are probably familiar with the swap power — sometimes called a substitution power. It’s one of the most popular tools in the trust playbook for fixing an income tax problem that doesn’t show up until years after you’ve already signed the documents and forgotten the details. On paper, it’s elegant. In practice, once a family’s balance sheet gets large and complicated — which, if you’re reading this, yours probably is — it tends to get messy.

There’s another way to solve the same problem that sidesteps the mess entirely. It involves putting a specialized form of life insurance inside the trust instead of a traditional portfolio and hoping the swap power cooperates when you actually need it to. Let’s break down why.

The problem: old trusts, small basis, big gains

Say you funded an irrevocable trust years ago with stock, real estate, or a business interest, back when it wasn’t worth nearly what it is worth currently. Fast forward to today. For a lot of clients I work with, those investments have quietly grown into a meaningful chunk of the client’s net worth. But it also creates a tax problem.

When the trust eventually sells those investments — or your kids or grandkids do — the IRS taxes the gain: the difference between what the asset is worth now and what it was worth when it went into the trust. That original, low number is your “basis.” A low basis on a large position can mean a genuinely painful tax bill, the kind that shows up right around the same time as a very awkward family conversation.

The tax code does offer a fix. If an asset is included in someone’s estate at death, its basis “steps up” to fair market value on the date of death. All that built-in gain simply disappears for tax purposes. It’s a big deal, especially at the scale many of my clients’ portfolios have reached — which is exactly why estate planners like me spend so much energy trying to get appreciated assets back into someone’s taxable estate before they’re ever sold.

The go-to fix: the swap power

The most common tool for doing this with a traditional investment trust is the swap power. Here’s the idea: if the trust is structured as a “grantor trust,” you may have retained the right to swap assets with it. You hand the trust something of equal value — cash, other securities — and take the low-basis, appreciated asset out for yourself. Now you own it personally. If it’s still yours when you die, it gets a step-up in basis.

Sounds simple. Almost suspiciously simple. And it can work beautifully. But a trust built around a traditional portfolio and this strategy tends to run into real friction, and — this is the part that surprises people — the friction gets worse, not better, as the numbers get bigger.

Three problems that only get louder over time

Finding the right asset is harder than it sounds. You need to hand the trust something of exactly equal value, on demand, whenever the opportunity or the need shows up. Even with substantial personal wealth, you don’t always have a spare asset of matching value just sitting around, especially when much of your net worth is tied up in a business, real estate, or other holdings that don’t move quickly. Wealthy doesn’t always mean liquid, and I’ve had more than one client discover that the hard way, usually at the worst possible moment.

Timing is everything, and absolutely nobody controls it. For the swap to pay off, you need to still own the asset when you die. Nobody — not me, not your CPA, not your advisor with the very impressive spreadsheet — can predict that. Swap too early and you may give up growth or flexibility you didn’t need to give up. Wait too long, or get caught by surprise, and the plan never gets executed at all. Mortality is famously unwilling to work around estate planning deadlines.

Equal value doesn’t mean equal fit. You might find an asset worth exactly the same amount as what you’re swapping out, but that doesn’t mean it belongs in the trust for the long haul. It may behave differently than what the trust was built to hold, throw off income the trust doesn’t need, carry more risk than the family is comfortable with, or simply drift away from why the trust was created in the first place. A swap that balances on paper can still leave the trust holding something that doesn’t serve its actual goals — and that matters a great deal when a trust is meant to serve multiple generations, not just satisfy this quarter’s basis math.

In short: the swap power is a great idea that depends on a lot of moving parts lining up at once, using whatever asset happens to be available instead of what the mission actually calls for. Large, complex portfolios rarely cooperate that neatly. Neither, in my experience, do families.

A different approach: hold growth assets inside a PPLI policy

This is where PPLI comes in. Think of it as a customized life insurance policy built specifically for investors with significant wealth — not the kind of policy you buy off a shelf at your neighborhood agent’s office, and not typically practical below a certain level of investable assets. It’s built to hold sophisticated investments inside it, and it comes with two features that make the whole basis-step chase unnecessary.

First, the money grows without being taxed along the way. Inside a properly structured PPLI policy, investment growth isn’t taxed year to year the way it would be in a traditional brokerage account sitting inside the trust.

Second — and this is the real advantage — the death benefit comes out completely free of income tax. That’s not a step-up. That’s better. The tax code already excludes life insurance death benefits from income tax entirely. You never have to hunt for a matching asset to swap, time your death correctly (a strange sentence to type, but here we are), or end up with mismatched holdings that don’t fit the trust’s purpose. The tax problem simply never shows up, because the growth was never going to be taxed as a capital gain in the first place.

Just as important, the trust keeps holding what it was actually built to hold. No shuffling investments in and out to chase equal value. The investment strategy inside the policy can be built entirely around the family’s real, long-term goals — continued growth, multi-generational wealth transfer, funding future opportunities — instead of around whatever happens to be available to swap on a given Tuesday.

Worth saying clearly: this isn’t a free lunch

(Even that day over barbecue wasn’t free — someone had to expense it.)

PPLI isn’t for everyone, and it isn’t simple, even for families with substantial wealth. It works best for investors who can commit meaningful capital for the long haul. It comes with insurance costs and compliance rules, and it requires careful, ongoing structuring to keep its tax benefits intact. It is not a substitute for sitting down with your advisors and talking through your actual goals.

But if you’re a high-net-worth entrepreneur or investor whose trust holds a traditional investment portfolio, and the swap power is the only tool you’ve been shown for solving the basis problem, it’s worth asking a second question: could some of this be growing inside a PPLI policy instead — where the tax problem never shows up, and the trust never has to trade its long-term mission for a same-day equal-value swap?

Sometimes the best planning isn’t finding a clever way to fix a tax problem. It’s structuring things so the problem never exists in the first place.

Written by Frank L. Leffingwell

Partner in Charge, Austin

The Trust Fix Most UHNW Families Are Told to Rely On — and an Alternative Worth a Second Look Read More »

Common Questions About Texas Guardianship

July 2, 2026

1. What is the difference between guardianship of the person and guardianship of the estate?

In Texas, a guardian of the person takes charge of the incapacitated person, including providing for their daily needs, consenting to medical treatment and applying for government benefits and services. A guardian of the estate takes responsibility for the incapacitated person’s assets and liabilities. Most actions of the guardian of the estate require pre-approval from the probate court.

Sometimes only one type of guardianship is necessary for an incapacitated person; sometimes both guardianship of the person and guardianship of the estate is required.

2. How long does a guardianship last?

Unless the guardianship is a “temporary guardianship,” letters of guardianship can be issued by the county clerk after the court appoints the guardian and bond is posted. These letters expire annually and most Texas courts require the guardian to file a yearly report before the letters are renewed.

3. My child has an intellectual and/or developmental disability and is about to turn 18. Do I have to apply for guardianship?

Not all people with incapacities require guardianship. Just as each individual is unique, an analysis should be conducted to see whether guardianship is necessary due to the particular circumstances of your child. Texas law requires the court to consider whether there are any alternatives or supports and services available to an incapacitated person which can be used effectively to avoid guardianship. A Blum Firm attorney can assist you in making this determination for your loved one.

4. Can more than one person be co-guardians of an incapacitated person in Texas?

In most circumstances, only one person can be appointed guardian. One significant exception is that both parents can be appointed as joint or co-guardians of their child.

5. Does your firm handle contested guardianship matters?

Yes. The attorneys at The Blum Firm have significant experience handling guardianship contests in North Texas. Give us a call to discuss how we can be of assistance.

6. If an incapacitated person has powers of attorney, is guardianship necessary?

If a person has powers of attorney which were validly executed prior to the incapacity, the powers of attorney may be used as an alternative to guardianship. However, an incapacitated person who is a candidate for guardianship does not have capacity to execute powers of attorney.

7. How long does it take to obtain a guardianship in Texas?

In most North Texas counties, it takes approximately three to six months to obtain a guardianship of the person, a guardianship of the estate, or a combined guardianship of the person and the estate.

8. My friend is incapacitated and doesn’t have any family residing nearby. Can I be appointed as my friend’s guardian?

The Texas Estates Code gives a list of priority regarding who is to be appointed as guardian for an incapacitated individual. In most cases, if a person executed a valid Designation of Guardian prior to their incapacity, the person who was designated will be appointed to serve as guardian. If an incapacitated person does not have a valid Designation of Guardian, immediate family members have priority to serve over unrelated individuals and there is a particular order of preference. If there is no suitable family member, a friend or a private professional guardian may be appointed to serve as guardian.

9. Who determines if a person is incapacitated to a degree that they require guardianship?

The preliminary determination of incapacity is usually made by a physician who has recently examined the incapacitated person. The ultimate decision as to whether an individual is incapacitated to the extent that a guardian is required is up to the probate court.

10. Our family has moved to Texas from another state where we had guardianship of our loved one. Can your firm help us with getting the guardianship transferred to Texas?

Yes. Attorneys at The Blum Firm have experience guiding families through the guardianship transfer process.

Written by Lynn Waller Kelly

Partner

Common Questions About Texas Guardianship Read More »

The Hidden Cost of “Good Enough” Entity Planning

February 23, 2026

For years, everything works.

The business grows. The partners get along. The documents sit in a drawer.

And then something happens.

Very often, it is the unexpected death or disability of a partner or shareholder. An ownership interest passes to a surviving spouse or children. If the deceased owner held a controlling position, the balance of decision-making shifts immediately. The person who inherits that interest may not have the same qualifications, experience, or even the same goals.

The structure that worked perfectly yesterday suddenly doesn’t work at all.

Why These Documents Go Untouched

Most business owners form an LLC or partnership to achieve a specific purpose. Liability protection. Tax treatment. Operational clarity.

Once that purpose is accomplished, they turn their attention to what they actually want to do, which is run the business.

Very few owners have an ongoing interest in revisiting the operating agreement or partnership documents themselves. If the business is performing well, the natural assumption is that everything else must be in order as well.

There is also a reluctance to reopen agreements that might invite disagreement. If relationships are strong, there is often a “let sleeping dogs lie” mindset.

The result is that I frequently see documents that are decades old. Some were drafted under statutes that have since been repealed. They reference laws that no longer exist.

The business may be thriving. The documents may not be.

How Misalignment Creeps In

Over time, small changes accumulate.

An entity may have been formed and classified for tax purposes in a certain way. Later, ownership changes. The company grows. Its operations evolve. Tax law shifts. State law changes.

But the documents do not.

Income allocations may no longer match the economic realities of the business. Distribution provisions may conflict with how profits are actually being shared. Management structures written for a small founder-led company may not fit a much larger, more complex operation.

These misalignments rarely cause immediate problems. They go unnoticed because no one pulls the documents out to compare them to current reality.

They only become relevant when something goes wrong.

Why Older Documents Fail to Anticipate

In the last two decades, there have been significant changes in state entity law, federal tax law, and the way businesses are financed and sold.

Older operating agreements often fail to reflect those developments. Beneficial tax changes may be available, but the documents do not position the owners to take advantage of them. Financing structures and transaction terms that are common today were not contemplated years ago.

Dispute resolution provisions are another common weak spot. Sometimes they are poorly suited to the types of disputes that actually arise. Other times, there are no meaningful provisions at all.

Disputes among owners are not a sign of failure. Over time, they are almost inevitable. If the documents provide no guidance, uncertainty replaces structure.

When Problems Surface

The most common trigger is the unexpected death of an owner. That is when the structure is tested immediately and without warning.

Sales are another stress point. Modern transactions involve extensive due diligence. Buyers, lenders, and investors examine entity documents closely. If there are inconsistencies, outdated provisions, or unresolved ambiguities, transactions can be delayed or halted altogether.

In some cases, when alternatives are available, third parties simply walk away and move on to another opportunity.

What seemed like a technical issue becomes a real financial cost.

Stewardship, Not Pessimism

Updating entity documents is not about expecting the worst. It is about stewardship.

I often compare company documents to estate planning documents. Most people do not view preparing a will or trust as pessimistic. They view it as a responsibility, something done to make difficult moments easier for family members.

Business entity documents serve a similar purpose. They are meant to anticipate eventualities and reduce uncertainty when circumstances change.

Good maintenance is not complicated. The key is consistency. Meeting with advisors on a regular basis, whether annually or every couple of years, and reviewing what has changed in the business and in the law can prevent problems from compounding.

The cost of waiting until there is pressure to act is uncertainty. And uncertainty in a business context is rarely inexpensive.

You may have formed your company years ago in a way that was as close to perfect as possible under the laws and circumstances at that time. It is unreasonable to assume that none of those circumstances have changed or that the documents do not need to change with them.

Looking Ahead

Good planning isn’t about predicting every future event. It’s about creating a structure that holds up when something unexpected happens. Families who take the time to coordinate their estate plans and business structures, and maintain them over time, are usually the ones who avoid unnecessary taxes, conflict, and regret later on.

About Frank Frank Leffingwell advises ultra-high-net-worth closely held business owners and investors on partnership tax, estate planning, and business succession. He works closely with families and their advisors to translate complex planning into coordinated, practical structures that hold up over time.

Written by Frank L. Leffingwell

Partner in Charge, Austin

The Hidden Cost of “Good Enough” Entity Planning Read More »

Why Basis Planning Matters More Than Estate Tax for Many Families Today

February 9, 2026

When families first come to see me, they are almost always worried about federal estate tax.

Very frequently, they have not yet considered federal income tax issues at all.

That focus is understandable. The federal estate tax draws attention because the tax rate is high, and for many years the tax exemption was much lower. For a long time, estate tax planning deserved center stage.

For many families today, however, the conversation has shifted.

Why the Focus Has Changed

With higher federal estate tax exemptions, fewer families actually owe estate tax than they once did. As a result, I sometimes spend as much time focused on federal income tax consequences as I do on minimizing federal estate tax issues.

What I often see in older estate plans is a structure built on an assumed much lower estate tax exemption. Married couples, for example, may have structured transfers at the first death in ways they likely would not choose today if the plan were being drafted under current law.

At the same time, many of the assets in those plans have continued to appreciate. The tax basis of such assets, however, has not. The growing gap creates a significant exposure to federal income tax liability later.

Why Estate Tax Still Gets the Attention

One reason estate tax continues to dominate the conversation is the headline rate. Forty percent is a number that gets people’s attention.

Another reason is familiarity. Estate tax planning has been discussed for decades, while income tax consequences often feel less visible and less immediate.

But visible does not always mean larger.

How Income Tax Shows Up Later — and Bigger

Income tax most often shows up at the death of a loved one.

That is when families sometimes discover that a highly appreciated asset was transferred out of the estate years earlier and is no longer eligible for a step-up in basis. In many cases, the family had assumed that step-up would apply.

A common example involves real property that is integral to a family’s business, such as the land or building from which the business operates. Over time, that property may have appreciated significantly while its tax basis remains relatively low. If the property is held in a way that prevents a step-up in basis at death, the resulting capital gains tax can materially reduce the value ultimately realized by the family when the property is sold or transferred.

That realization often comes as a rude shock.

Gifting Versues Holding Assets

One of the more counterintuitive aspects of the tax law is that gifting assets during life generally does not result in a step-up in federal income tax basis. That benefit typically applies only at death.

As a result, well-intentioned lifetime gifts can sometimes produce worse tax outcomes for heirs than holding the same assets until death, even when federal estate tax exposure is minimal or nonexistent.

Explaining this without jargon is not always easy. I often resort to simple math, written out on paper, because example numbers tend to make the issue clear more quickly than a conceptual explanation.

What Heirs Actually Keep

I frequently review estate plans that were technically successful but still left heirs with avoidable tax costs.

In some cases, families moved appreciated business assets into irrevocable structures to reduce federal estate tax exposure, only to lose the ability to eliminate capital gains tax later. When those assets are eventually sold or transferred, a meaningful portion of their value disappears to federal income tax.

The plan worked, but not in the way the family expected.

How to Think About the Tradeoff

For many families, this ultimately comes down to simple arithmetic.

If one approach reduces federal estate tax but creates a much larger federal income tax liability, and another approach does the opposite, the lower overall tax cost is frequently the better answer. Other considerations matter as well, including asset protection and family dynamics. Even more considerations matter for assets which are part of the family business, such as business succession goals and available business exit strategies. In any event, however, federal income tax can no longer be treated as a secondary concern.

Many plans that were created even fairly recently are now outdated simply because the rules have changed so quickly.

Looking Ahead

Good planning isn’t about predicting every future event. It’s about creating a structure that holds up and remains flexible when something unexpected happens. Families who take the time to coordinate their estate plans and business structures, and maintain them over time, are usually the ones who avoid unnecessary taxes, conflict, and regret later on.

Written by Frank L. Leffingwell

Partner in Charge, Austin

Why Basis Planning Matters More Than Estate Tax for Many Families Today Read More »

Why Smart Families Coordinate Estate Planning and Business Structure

January 25, 2026

1. What is the difference between guardianship of the person and guardianship of the estate?

Most estate plans and business structures look fine on paper.

The problem is that paper doesn’t run a business, face a sale, or survive an unexpected death.

When families come to me with an estate plan and a business structure already in place, I don’t start with tax rates or legal details. I start with something much simpler: do the documents actually allow each other to work?

Surprisingly often, they don’t.

Where Things Quietly Go Wrong

One of the most common issues is a mismatch between documents. An estate plan may assume a business interest can be transferred one way, while the company’s operating or shareholder agreement restricts or outright prohibits that transfer.

Everything appears coordinated until the moment it needs to work.

Another problem shows up when businesses are formed after an estate plan is already in place. Families assume the new entity fits neatly into the old plan. Sometimes it does. Other times, valuable opportunities are missed simply because the pieces were never designed together.

These issues rarely feel urgent. That’s what makes them dangerous.

Assumptions Don’t Hold Up

Business owners often assume that valuation provisions in buy-sell agreements will carry over into their estate plan and hold up if scrutinized.

That assumption is frequently wrong.

Valuation methods designed for business continuity don’t always work for estate planning purposes. When those differences aren’t addressed early, families can be left with results they never intended.

When the Disconnect is Discovered

Most families don’t discover these gaps early. They usually discover them too late.

The most common trigger is death. At that point, options are limited, and in some cases there is very little that can be done to fix the problem.

Sales can expose these issues as well, especially when owners disagree about timing or terms. But death is when misalignment becomes unavoidable, and when the consequences are felt most acutely by surviving family members and key employees.

Why This Matters More Today

This issue matters more now than it did 10 or 20 years ago for a simple reason: more families own valuable, closely held businesses than ever before.

For many families, business interests make up the largest portion of their wealth. At the same time, estate tax rules have changed repeatedly over the years. Plans drafted for a different tax environment often no longer match current ownership realities.

Planning that was once “good enough” may no longer be good at all.

The Tradeoff Worth Making

No one wants unnecessary complexity. I understand that.

But most of the problems that lead to higher taxes, family conflict, or lost value could have been anticipated and addressed without making a plan overly complicated. What they do require is coordination and informed judgment.

When planning is done well, owners don’t need to understand every technical detail. They need confidence that:

the estate plan works with the business structure
the succession plan is realistic
and the people affected understand and accept it

When that happens, there is usually a noticeable sense of relief for everyone involved.

Looking Ahead

Written by Frank L. Leffingwell

Partner in Charge, Austin

Why Smart Families Coordinate Estate Planning and Business Structure Read More »