Estate Planning

Texas Estate Planning: The Limitations of a Will

Published on: April 11, 2023 | By Thomas W. McCulloch

The will is the most well-known tool in estate planning, and it is often clients’ first choice for how to make sure their assets are transferred to loved ones after their death. The will can be useful in that it allows individuals to provide detailed instructions for their beneficiaries, and clients are generally grateful to have the opportunity to leave a thoughtful, specific document that coordinates the distribution of their assets for the ones they leave behind.

It is imperative to recognize, however, that wills do have disadvantages, and it is important to explore the limitations of wills alongside their benefits. Of note, anyone that wants to contest a will has exactly two years to do so, or else the will becomes unalterable. When a person dies, their will is submitted to probate, which means the court takes charge of the process of distributing their assets according to their wishes. From the day the will is submitted to probate, any potential challenger to a will has exactly two years to file with the court and contest that will’s validity.

The second obvious disadvantage to a will is that it requires the decedent’s property to go through the probate process. At times, this process can be long, drawn out, and contentious. Courts are charged with interpreting the terms of each person’s will, and there is no guarantee that the court will distribute assets exactly as the decedent intended if there is even one ambiguous phrase in the will.

The Revocable Living Trust: What You Need to Know

Published on: April 11, 2023 | By David W. Miller

Unfortunately, the law around estate planning can be complex and technical in a way that makes it difficult to sort through. Fortunately, though, the law provides for a diverse array of options for those undergoing the estate planning process. Many of our clients come to us, for example, asking us to help them create a thoughtfully written will. It is important to note that wills are not the only option for those looking to make long-term plans. Another tool, the trust, comes in the form of a revocable living trust, which can be beneficial for those looking to both use their assets now and securely transfer them after their death.

What is a Revocable Living Trust?

When done correctly, creating a trust allows individuals to forgo the probate process and pass assets directly to their beneficiaries after they die. If the trust is revocable, the individual maintains the right to suspend the trust at any time, taking back the assets that are hers or his in order to use them in the short-term future.

As we have discussed elsewhere in our blog, the probate process can be long, drawn out, and public. Creating a trust, however, allows for a secure and private transfer of assets upon the designator’s death. By forming a trust, designating a trustee, and naming beneficiaries, individuals can make sure their assets will pass on seamlessly to those they care about.

Decedent’s Wife Defends Claim to Texas Property in Long-Standing Estate Dispute

Published on: March 31, 2023 | By David W. Miller

In a recent case before a court of appeals in Texas, the widow of a property owner had to defend her claim to the property that her husband left her in his will. At issue in the case was how to interpret the wills of both the decedent and the decedent’s mother; the decedent’s sons argued the documents made clear that the land belonged to them, while the widow argued that the land was clearly her property. Ultimately, the court of appeals agreed with the decedent’s widow that the property rightfully belonged to her, but the litigation took twelve years from beginning to end.

Facts of the Case

The defendant was the third wife of a man who passed away in 2010. Two years before his death, the man wrote a will that left all of his property to his wife if she survived him. Two of the man’s sons from a previous marriage, however, took issue with this provision after their father died. They claimed that 277 of the acres actually belonged to them – one large piece of property had originally been their grandmother’s, and their grandmother’s estate documents did not make clear whether the land should go to their father’s children or his wife after his death.

The sons initiated this litigation in December 2010. They argued the land qualified as something called a “life estate with a remainder interest”, which means that they were due to inherit the land after their father’s death. The man’s wife, however, argued that the land was actually something called a “fee simple interest”, which means the land should go directly to her as the designee in her husband’s will.

Significant Other Fights for Loved One’s Assets in Recent Texas Estate Planning Case

Published on: March 15, 2023 | By David W. Miller

Significant Other Fights for Loved One’s Assets in Recent Texas Estate Planning Case

In a recent case before an appeals court in Texas, the plaintiff sued a local firefighters’ relief fund, hoping to receive compensation after her loved one passed away. The plaintiff originally asked a trial court to rule that she was entitled to survivor’s benefits after the death of her significant other, who had worked for years as a firefighter. Ultimately, the trial court refused to hear her claim, and she appealed. The court of appeals reversed this decision and gave the plaintiff another shot at having her case be heard.

Facts of the Case

According to the opinion, the plaintiff suffered the death of her significant other, who was entitled to a pension from a firefighters’ relief fund while he was alive. After his death, those funds went to his estate. In her lawsuit, the plaintiff argued that while she was not officially married to her significant other before he died, they were informally married, and she was entitled to some of the funds placed in the estate.

To succeed in her claim, the plaintiff had to prove both that she and her partner were indeed informally married and that this marriage entitled her to money from the relief fund. Because the plaintiff and her significant other had not created an in-depth plan that would automatically distribute his assets to her after his death, the plaintiff proceeded with the lawsuit in hopes of receiving the funds she thought she deserved.

Signs of Elder Abuse: How to Look Out for Your Loved Ones

Published on: March 10, 2023 | By Thomas W. McCulloch

When we speak to clients who have elderly parents, grandparents, or friends, one of their biggest concerns is that their loved ones will be taken advantage of through financial abuse. Financial abuse is incredibly common among elder individuals, and the most important thing that others can do is closely monitor how and when their loved ones’ money is being spent. If friends and family keep a watchful eye, this can greatly reduce the odds that their loved ones will be subject to financial abuse from other less trusted individuals in their lives.

It is important to know what to look for when monitoring for possible financial elder abuse. An obvious red flag is a large or unexplained withdrawal or, even worse, a pattern of large or unexplained withdrawals. If your loved one’s bank account is fluctuating in a way that you know is not in alignment with their spending patterns, it is always better to investigate instead of leaving things to chance.

A rapid loss of money can also indicate possible financial elder abuse. Sometimes, we see elderly individuals who face unexplained taxes during tax season or a large number of complaints on FINRA’s broker check site. If your loved one has a broker who is difficult to contact or who has been exhibiting evasive behavior, this is also a sign to look into how that person’s money is being handled.

Where to Begin in the Estate Planning Process: Common Questions and Misconceptions We See as an Estate Planning Firm

Published on: March 10, 2023 | By David W. Miller

As an estate planning firm, we get questions from many clients and potential clients about where to start when thinking about beginning the estate planning process. The process can feel daunting, and more than anything, our clients want the peace of mind that their family members will be taken care of once they are gone. At McCulloch & Miller, we walk with you through every step of the estate planning process so that you can be confident that no stone will be left unturned.

The first and most overlooked part of the estate planning process is gathering the documents you already have in your possession. You might have, for example, insurance policy documents, titles and property deeds, proof of identity documents, and bank account statements that will be relevant to your estate planning needs. Some clients bring in a list of their digital logins and passwords, as well as beneficiary designations and funeral instructions. The exact number of documents will differ for everyone, but beginning the process of looking for what you already have can be incredibly helpful as you take the first step in your estate planning process.

Second, you will want to make a list of your assets so that an attorney can help you figure out where each part of your estate should go. A common misconception we see is that only the super-wealthy have to worry about dividing their assets, but this could not be further from the truth. Anyone who has property, bank accounts, a vehicle, investments, or ordinary goods will have to think about how they want those assets to be divided among the people they love.

Millennial Estate Planning: How the Younger Generation is Working Harder and Planning Smarter

Published on: February 28, 2023 | By David W. Miller

At McCulloch & Miller, we specialize in estate planning for clients of all walks of life – those with families, those without; those with complicated assets, those without; those who are older and approaching the end of their lives, those who are not. More commonly, we are meeting with millennials that are looking to start their end-of-life planning and who want to make sure their loved ones would be protected if anything were to happen to them.

The Ins and Outs of Estate Planning for Millennials

Millennials are in an important position, as many have both young children and aging parents. Thus, they often identify as caretakers in multiple senses, and they might have more individuals to think about in developing their estate plans. Recently, a report published by Trust & Will reveals that more and more millennials are looking for ways to protect their assets in the long term. The report indicates that of the millennials surveyed, 34% were initially motivated to plan their estates because of young children and 11% were motivated because of a recent death in the family. Others cited recent increases in net worth, large purchases, or growing life responsibilities as reasons to get their affairs in order.

Most millennials surveyed opted for a will-based, instead of a trust-based, estate plan. Those with more in assets typically chose trusts over wills, but it’s not just the wealthiest individuals that are making estate plans in general. The report notes that individuals with all ranges of net worth are looking for ways to start their estate planning journey.

Living Wills: What to Know, How to Decide, and When to Take Action

Published on: February 21, 2023 | By David W. Miller

At McCulloch & Miller, we often get questions from our clients about when it might be the right time to work on creating a living will. To answer this question, it is important to first understand what a living will entails and what effect it might have on you and your loved ones in the future. With this baseline of understanding, you can then make a decision about what is right for you, your circumstances, and your family members.

A living will provides information about what kind of medical care you want to get if you cannot express your wishes or you are reaching the end of your life. Oftentimes, this key information is never communicated to family members and friends; thus, when a loved one is no longer healthy enough to verbalize their needs, the people in their lives are left guessing about what they would have wanted.

Living wills generally take effect when a doctor (or sometimes two doctors, depending on the state) determines that a patient is either permanently incapacitated or unable to communicate. The doctor must put in writing that the patient is in this condition, and at that point, the family members resort to the individual’s living will to determine what kind of medical care they will receive.

A Living Trust: When to Get One and How to Know if It is Right for You

Published on: February 21, 2023 | By Thomas W. McCulloch

When clients and prospective clients come to us for their estate planning needs, their first priority is often asking us to help them write their wills. What many clients don’t know, however, is that wills are only one option clients have at their disposal. Trusts are another tool that can create security throughout the estate planning process. Trusts come in many forms – some address specific needs, while others are general and help individuals avoid the probate process.

A common misconception we see is that trusts are only for the super-wealthy. Trusts can be utilized, however, by any individuals that have assets they don’t want to go through the probate process. Probate is a legal procedure through which assets owned in a decedent’s name are distributed by a court. The kinds of assets that go through probate are typically assets like bank accounts, homes, cars, art, and bank accounts. These assets don’t pass directly to a decedent’s spouse or heirs, so it is the court’s job to make sure they are distributed fairly. Using this kind of trust instead of a will means that assets owned by your trust will totally avoid the probate process and go directly to your loved ones.

When an individual creates a living trust, then, they can take more control of where these assets will end up. Assets held in a trust are also taxed differently than if they are owned outside of the trust. Trust planning can reduce estate taxes, creating yet another benefit that many clients do not know about.

How the New SECURE Act 2.0 Can Affect Your Estate Planning Goals

Published on: February 8, 2023 | By McCulloch & Miller, PLLC

How the New SECURE Act 2.0 Can Affect Your Estate Planning Goals

In the final days of 2022, the U.S. Congress passed a federal law known as the SECURE Act 2.0. This law addresses retirement accounts and distributions throughout the country and was signed by the president in late December. While this law primarily affects how Americans manage their personal retirement accounts, the new mandates will also affect how revocable trusts and other financial instruments can be managed.

The SECURE Act 2.0 is based on an acronym meaning Setting Every Community Up for Retirement Enhancement. According to an analysis published by a professional legal publication, a primary feature of the act is an adjustment of the minimum retirement age to begin making mandatory distributions from a 401(k) or traditional IRA account. Under the new law, retirees are permitted to wait until they turn 73 years old to begin withdrawing funds from their retirement accounts without an additional penalty. This change puts more control in the hands of retirees, permitting them to keep earning interest on their money for longer.

Another feature of the SECURE Act 2.0 is to increase the allowable amount of “catch-up” contributions to 401(k) and other accounts. Under the new scheme, people between the ages of 60 and 63 who deposited less than the maximum allowable amount earlier in life will be permitted to deposit at least $10,000 per year to their accounts, up to the maximum allowable amount. This change in the law will allow the aging population to invest money they earned or received later in life into their retirement accounts for later use without tax penalties.