Houston Estate Planning and Elder Law Attorney Blog

How Holding Cryptocurrency Affects Texas Estate Plans

Published on: December 1, 2021 | By McCulloch & Miller, PLLC

With the emergence of cryptocurrency, many questions have arisen, including the impact of cryptocurrency on everyday life and the economy. However, whether someone has a small amount of Bitcoin or millions in cryptocurrency assets, many individuals do not consider how cryptocurrency assets should be incorporated into an estate plan. Incorporating cryptocurrency into an estate plan allows assets to be protected and ensures these digital goods are passed along after a person has died. Below are common questions and explanations about cryptocurrency and its role in the estate planning process.

What is Cryptocurrency?

Although the word “cryptocurrency” is used often, not many people know what cryptocurrency actually is. Cryptocurrency is a digital currency based on a network distributed across computers, and it is nearly impossible to counterfeit. Cryptocurrencies are decentralized, meaning they operate outside the control of governments. Bitcoin is the most well-known of the cryptocurrencies. Cryptocurrency is accessed through a private key, which is usually a password that only the owner of the cryptocurrency knows. Without knowing the private key, an individual cannot access, buy, or sell the money. Alternatively, some brokerage houses allow investors to purchase cryptocurrency through their existing accounts.

How Can I Incorporate Cryptocurrency into My Estate Plan?

Because cryptocurrency is digital, it is essential for individuals to include instructions in their estate plan on how to access these assets. Otherwise, if the person dies, the funds may be lost forever—or it may take years to regain access. Estate planning attorneys recommend including a list of all cryptocurrency assets an individual has, along with detailed information about the cryptocurrency’s private key and login information. This will allow beneficiaries to access digital assets and ensure they are not lost forever.

What Happens When Someone Dies with Unpaid Debts in Texas?

Published on: November 30, 2021 | By McCulloch & Miller, PLLC

During the estate planning process, Texans will try and resolve as many issues as possible. However, sometimes these problems fall through the cracks. While most individuals try to ensure they have no debts when they die—at least to the best of their ability—sometimes this is unavoidable. When this occurs, people may have questions about whether the debt is still owed and who pays the debt. Because this can be a very stressful situation, below are answers to some of the most common questions and how to handle each situation.

Does Your Debt Disappear After You Die in Texas?

Unfortunately, if a person passes away with debt, this debt is not automatically erased. Generally, your estate—through the person you name as executor of the estate—is required to pay off your debt. The process itself is called probate. Probate is accomplished through using the assets listed in the estate plan, such as cars, homes, bank accounts, and other assets, to settle the debt. In doing so, a judge will determine the estate’s total value, pay down the debt, and distribute the remaining estate assets to the heirs. The heirs will not be paid until the debt is handled.

Texas Estate Planning Around 2022 Tax Exemptions

Published on: November 23, 2021 | By McCulloch & Miller, PLLC

At last, the IRS has announced changes to the unified credit and annual gift tax exemption for 2022.

To understand what these changes mean for Houston residents, it is important to first understand how these tax exclusions operate. The lifetime estate and gift tax exemption—also known as the unified tax credit—allows people to make tax-free transfers up to a certain amount during their life and upon their death. The exclusion is said to be “unified” because certain gifts transferred during a person’s life will count against the total amount of transfers that can be made tax-free upon their death.

Outside the unified credit, however, is the annual gift tax exemption. This exemption gives people a free pass to make untaxed gifts up to a certain amount each year without counting it toward the unified credit limit.

Estate Planning for First Responders in Houston

Published on: November 18, 2021 | By McCulloch & Miller, PLLC

Whether you are a firefighter, emergency medical technician, paramedic, or police officer, as a first responder, you put your life on the line during every shift to help those in your community. With this extraordinary risk and sacrifice comes an urgent need to protect you and your family’s financial future. With careful estate planning, you can rest assured that your assets will be managed appropriately should you be injured on the job, or if your work results in the ultimate sacrifice.

Estate Planning for First Responders

An estate plan can offer substantial peace of mind for first responders. If a first responder were to die without an estate plan, then under Texas law, the courts would be forced to distribute that person’s assets according to formulaic legal guidelines. These guidelines do not account for factors such as personal preferences or complicated family matters. The results can be devastating, such as a long-estranged spouse inheriting a significant portion of the first responder’s estate.

Important Conversations to Have with Aging Parents During the Holidays

Published on: November 17, 2021 | By McCulloch & Miller, PLLC

With Thanksgiving and other holidays fast approaching, it is the time that families come together to celebrate and reflect on what they are grateful for. And while gathered around the Thanksgiving dinner table, family members catch up, discuss hot-button topics, and sometimes have difficult conversations. Especially when aging loved ones attend these holiday functions, it is an important time to talk with them about the future, including their wants and needs as they relate to estate planning. Although these may be tough conversations to initiate, it is essential to plan ahead and avoid uncertainty and stress in the future. Below are some of the conversations people should consider having with their aging loved ones this holiday season.

1. Money and Living Situation

As people get older, it becomes harder to live alone and complete everyday tasks without the assistance of others. Because of this, individuals may want to talk with elderly loved ones about their long-term living situation preferences. Some people prefer moving to a long-term care facility, while others may prefer to stay with family—and either have a loved one take care of them or hire a home health aide to come into the house.

Is It Time to Update Your Houston Estate Plan?

Published on: November 12, 2021 | By McCulloch & Miller, PLLC

A federal bill working its way through Congress will have dramatic implications for Texans and their estate plans. Once the bill becomes law, some of the estate planning techniques that have assisted Americans with sizeable estates will no longer be available. Fortunately, there is still time for Houston residents to take advantage of several favorable laws still in place.

Changes to the Gift and Estate Tax

Perhaps the most notable change to the law will be a sweeping reduction in the unified credit amount. The unified credit amount for a married couple is currently $12 million. This means that married estate holders can make a combined total of $12 million tax-free transfers in the form of lifetime gifts and transfers upon death.

Moving to Texas? How to Revise Your Estate Plan

Published on: November 9, 2021 | By McCulloch & Miller, PLLC

There are many stresses that come along with moving: saying goodbye to friends and family, figuring out the logistics of the move, and settling into a new environment. However, many people do not think about amending their will or estate plan when moving to a new state. While this may not seem critical, many estate planning laws vary, depending on the state of residence. Below are common questions and explanations that individuals have about estate planning when they are relocating to Texas.

Why Do I Need to Change My Estate Plan?

When moving to a new state, it is important to amend a will and other estate planning documents. However, many people—despite hearing this advice—are confused about why this is necessary. Although a person’s will is still generally valid after moving, there tend to be state-specific laws and regulations that may impact the estate plan.

Texas Estate Planning Issues to Remember Before 2022

Published on: November 1, 2021 | By McCulloch & Miller, PLLC

2021 is nearly over, with a new year around the corner. While this is generally a time of celebrating holidays and preparing for the new year, there are some estate planning considerations that should be taken into account before 2021 is over. Although this may not seem like a top priority, there are timing considerations because of proposed legislation that may impact estate plans by 2022. Below are some common items that should be reviewed and discussed with an estate planning attorney by the new year.

Estate and Gift Tax Exemption

While Texas does not have a state estate and gift tax, there is a federal tax. The estate tax is a tax levied on a person’s estate plan and is based on the amount of assets a person is giving to others in their estate plan once they have passed. Currently, estates under $11.7 million are not taxed; however, this amount is set to roll back to a lower level soon. While the current plan is to lower the exemption amount to $5 million in 2026, there are discussions in Congress about speeding up this rollback to the beginning of 2022.

Laws can be quickly passed through Congress, so it is difficult to predict whether this effort to lower the estate tax exemption by 2022 will be successful or not. Because of this, individuals should speak with an estate planning attorney who will advise them on whether their estate is likely to be impacted by this federal tax change—and changes they can make to their estate plan if they are impacted.

How to Maximize Your Texas Retirement Income

Published on: October 29, 2021 | By McCulloch & Miller, PLLC

As life becomes more complicated, individuals should not expect to rely on the traditional retirement savings of the past. With people living longer and many working part-time before retiring fully, retirement is not what it used to be. And because of this, it can be difficult for residents of Houston to discern how much money they should expect to receive in retirement—along with how much money they will need to enjoy this time in their lives. Below are explanations for what funds most individuals will receive after they have stopped working fully, along with how to create a financial plan now that will assist in ensuring their financial future is secure.

What Retirement Savings Should I Be Expecting During Retirement?

When determining how much a person will have in retirement savings, there are a few monetary streams to take into account. One of these funds is Social Security retirement benefits. Social Security provides replacement income for individuals once they have retired. A person’s total benefits depend on how much money they make, along with what age they are opting to receive the Social Security funds.
Besides Social Security benefits, an individual’s own savings are the other major component of a retirement fund. Not only does this include miscellaneous money saved individually—through investments, such as stock portfolios and annuities—but also company retirement assets like 401ks and pension programs. It is important to take account of how much is saved through these avenues and consolidate these accounts, if possible, to make it easier to financially manage in the future.

How to Save Extra Money for Retirement

In order to save money for retirement, it is first essential to log spending habits. By reviewing bills from the past few years and comparing them to the amount expected to save for retirement, it allows individuals to assess if they will have enough money saved without having to take further steps.

Rising Long-Term Care Costs in Texas

Published on: October 21, 2021 | By McCulloch & Miller, PLLC

With more Americans than ever reaching retirement age, the number of people requiring long-term care will only intensify too. According to the Department of Health and Human Services, 7 in 10 seniors are now expected to need long-term care before they pass away. However, the price of long-term care has only been increasing, making it more difficult for seniors to pay for this necessary service. Elder law attorneys can advise seniors and their loved ones on how to save for future long-term care expenses, along with potential senior housing options.

Are Long-Term Care Costs Increasing?

With more seniors requiring long-term care, the prices for these services have similarly increased. Recent data has shown that prices for nursing home care increased an average of 2.4 percent annually in the past ten years. In the same time period, home health care prices rose 11.1 percent. And these costs are only going to escalate further: per the National Health Expenditure, spending on home health care will climb 83 percent in the next ten years.
Additionally, these figures do not account for the unpaid care loved ones provide to seniors every year. Millions of individuals take care of their senior loved ones and are not paid for these services.

Paying for long-term care services is difficult enough for many families. In 2019, the average cost of a home health aide was over $45,000 per year, while placing a loved one in an assisted living facility costs a similar sum. On the other hand, nursing home care is, on average, double this price.