Estate Planning

Seeking Guardianship for a Texas Loved One

Published on: March 2, 2022 | By McCulloch & Miller, PLLC

This blog is for informational purposes only. McCulloch & Miller does NOT handle guardianship matters, we are a guardianship avoidance firm.

When most people think of guardians or guardianships, they think of children needing someone to protect them when their parents cannot. However, older adults may also require a guardian when they are incapable of managing their own affairs. Guardianships are not something to enter lightly, but they are critical in certain situations. Finding a guardian—and recognizing the responsibilities and duties of a guardian—may be a difficult endeavor, but it is important to know more about this process. Below is information on when to seek a guardianship, how this is incorporated into estate planning, and who to select as a guardian.

What is a Guardianship and How Do I Know if a Loved One Needs One?

How to Minimize Estate and Income Taxes for Texas Spouses

Published on: February 23, 2022 | By McCulloch & Miller, PLLC

While there are many intricacies to estate planning, married couples may utilize some different strategies when crafting their estate plan. This may include assessing the couple’s tax liability and deciding who to gift their assets and property to if they were both to pass away. And there are many tax benefits that spouses can take advantage of—both federally and in Texas—during their lives and after one spouse has passed away. Below are common questions about spousal trusts and estate plans and explanations to these potential queries.

What Tax Differences Are There for Married Couples?

One tax advantage for married couples in Texas is they are given a higher estate tax exemption limit. This means the total value of their estate may be higher before they are required to pay an estate tax—as compared to a single individual. In 2022, a single individual must pay an estate tax if their estate is valued at over $12,060,000. However, a married couple must pay the estate tax if their estate is more than $24,120,000. It is important to note that this exemption limit is set to decrease in 2026 to $10,000,000 per married couple.

How Estate Planning Can Help Women Overcome Retirement Risks

Published on: February 22, 2022 | By McCulloch & Miller, PLLC

woman retirement risks and estate planning

Most Texans are under the misassumption that estate planning is similar for all people—regardless of socio-economic status, gender, age, and other factors. However, this is not the case. While estate planning is critical for everyone, the type of estate plan and the strategies taken will depend on the person’s unique situation. This is why no two estate plans are the same. For example, there are inherent retirement risks that many women uniquely face that should be factored into their estate plan. Below are questions and tips on how women specifically can plan to avoid potential retirement risks in their estate plans.

What Are Some Potential Retirement Risks for Women?

Statistically, women live longer than men of the same age. While this may not seem critical for estate planning purposes, it does impact the potential resources they will receive as they age, along with the funds they have to pay for services. For example, many seniors will have to balance paying for medications or other healthcare services against their savings—for women who live longer, they may not have the money for these expenses.

Are There Different Estate Planning Rules When Gifting to Texas Minors?

Published on: February 17, 2022 | By McCulloch & Miller, PLLC

When individuals are crafting their estate plan, they often think about the younger loved ones in their lives—be it children, nieces and nephews, or grandchildren. They may want to leave property, financial assets, or family heirlooms to these minors. However, because minors usually lack the legal capacity to own property, there are different rules in place for gifting to those under 18 years old. Because of this, it is important for individuals to reach out to experienced estate planning attorneys who can help them navigate the process and ensure they are complying with federal and Texas estate planning laws.

How to Include Children in an Estate Plan

Because minors cannot legally inherit property, individuals wishing to include their children in their will must take additional steps. Texas estate law provides for minors who are given assets and property through an estate plan. Under the Texas Uniform Gifts to Minors Act, children’s assets are held in a managed account until they reach the age of 21. While individuals are usually only considered a minor until they turn 18, the law considers a minor anyone under 21 years old. In the will, the parents must designate a custodian who will manage the assets for the child’s benefit until they are no longer a minor. While this may be upsetting to some children, the point of this law is to ensure the funds are not irresponsibly spent. Instead, with the supervision and assistance of a custodian, there is a much higher chance the funds will be sensibly spent—if used at all—until the minor is older.

However, the requirements of the Uniform Gifts to Minors Act do not mean that the funds given to minors cannot be touched until they are 21 years old. The custodian is given a lot of discretion in utilizing the funds—so long as it is for the minor’s benefit. For example, if the minor needs funds to pay for college or assistance with transportation, the custodian can either purchase items for them or pay tuition on their behalf. Since the custodian has a lot of discretion, individuals should not make this decision lightly: who do they trust implicitly, would communicate well with their children, and make the best—and responsible—decisions on their behalf.

Changes to Federal Estate Planning Law May Impact Texans

Published on: February 15, 2022 | By McCulloch & Miller, PLLC

Every year, Congress passes new legislation that impacts Americans and their daily lives. One of these aspects is when Congress passes bills in estate planning law—this changes Texan’s strategies for planning for the future and what type of taxes they will have to play. Even for those bills that are not ultimately passed, it is critical to understand what these laws would do to estate plans, as they—or similar legislation—may be passed in the future. Below are various proposals made by Congress, their effect if passed, and steps Texans should take with their estate plan—whether these ideas become law or not.

What Are Some Current Federal Proposals to Estate Law?

In the past year, Congresspeople have introduced several pieces of legislation that would have significantly altered the way people create estate plans. However, these proposals were not passed.

Health Savings Accounts in Texas Estate Plans

Published on: February 9, 2022 | By McCulloch & Miller, PLLC

Many individuals think about various accounts listed in their estate plan—financial bank accounts, insurance policies, and others. However, health savings accounts function differently than most other accounts but can be critical. They benefit both the creator of the estate plan and their beneficiaries—the individuals who will receive the assets and property after the creator of the estate plan has passed away. Below are common questions and solutions to estate planning problems involving health savings accounts. While Texans will have various uses for their health savings account, this information can assist individuals in their estate planning decisions.

What is a Health Savings Account?

A health savings account is an account that allows an individual to set aside money to pay for health expenses in the future. These funds are placed on a pre-tax basis, meaning they can be used to pay for deductibles, copayments, or other medical necessities.

How to Assist Loved Ones with Cognitive Decline in Texas Estate Plans

Published on: February 8, 2022 | By McCulloch & Miller, PLLC

estate planning with a cognitive decline

When a loved one begins to show signs of cognitive decline, it can become difficult to emotionally reconcile who they once were with who they are becoming. They also will need more assistance with many daily activities—this may include their ability to handle their finances. While it may seem like an uncomfortable or awkward subject to approach, loved ones of the individual in cognitive decline should help develop a financial plan as soon as possible. Below are tips that individuals should take into consideration when planning for the future with loved ones with cognitive decline.

Start the Process as Early as Possible

It is critical to begin financial planning with a person whose mental faculties are declining as soon as possible. This increases the likelihood that the person in cognitive decline can still explain their wishes and wants about their future with their family. By having these discussions, family members assisting with the process will be confident later on they are making decisions that the person would have wanted. The loved one can then express their preference about these financial decisions, including who they want to manage their finances, how to use their money to pay for their future expenses and the bounds of these expenses. A great first step is executing a durable (financial) power of attorney.

How to Modernize a Texas Estate Plan

Published on: February 1, 2022 | By McCulloch & Miller, PLLC

As time goes on, society, life, and expectations change. One of these major alterations over the past twenty years has been the emergence and accomplishments of technology. While estate planning may not be the most noticeable area in which technology is relevant, technology has dramatically impacted this area and made estate planning accessible for more Texans than ever before. However, problems may also arise if people rely too much on this technology. Below is information on the current role of technology in estate planning and emerging technology in the industry.

The Current Role of Estate Planning and Technology

Estate planning can often be complicated and complex. Individuals have very specific needs and family dynamics that need to be represented in an estate plan in order for it to be effective. Technology—especially the internet—has been useful thus far to individuals wishing to create an estate plan; however, this information is often misapplied with devastating consequences.

How to Determine if a Particular Asset is Included in a Texas Estate Plan

Published on: January 31, 2022 | By McCulloch & Miller, PLLC

While Texans often have an overview of the estate planning process, most are unclear of the specifics that constitute an estate plan. Many people will then ask whether a certain asset is included in their estate. However, the answer to this question is highly dependent on the asset itself and how the person is defining “their estate”—as estate can have various meanings. Because this designation may be confusing, estate planning attorneys are here to answer these questions and help Texans in crafting their estate plans.

What Assets are in My “Estate?”

When a person passes away, their estate has different meanings depending on the context. It may refer to their estate for estate tax purposes, their probate estate, or whether an asset is able to be passed onto their heirs. Many people are unaware they must pay a tax if their estate is valued over a certain amount. Individuals whose estate is worth more than $12.06 million must pay a federal estate tax. There is no state estate tax in Texas.

How Texas Estate Planning Can Contribute to Family Stability

Published on: January 26, 2022 | By McCulloch & Miller, PLLC

When parents have a home that they would like to one day pass to their children, they may worry about the logistics of this process. It is safe to say that creating an estate plan is the best way to ensure children will one way receive the assets and property that the parents wish to give them. However, within estate planning, there are multiple ways to do this—whether including it in a will for the children to receive upon the individual’s passing or gifting the funds from selling the property. Below are various options on how to pass property onto children—along with the various legal and tax implications of each choice.

Giving a House to Heirs in a Will

The most common way that individuals will leave property to family, especially children, is to bequeath the assets in a will. In doing this, the parents would write in the will that the children are to be given the house after the death of the last parent. One benefit of including property, like a house, in the will is that children will be given the property on a stepped-up basis. This means the property’s value is adjusted to its fair market value and reduces the capital gains tax owed by the beneficiary. However, the beneficiary may still be liable for estate taxes, unlike if the property is gifted in a trust.

Gifting the Property to Children in a Trust

Some parents would rather be able to give their children more money, rather than property after they pass away. The best way to do this is to create a revocable trust rather than leaving the property to the children in the will. In this case, after the parents die, the property is sold, and the funds from the sale are given to the children. For example, the parents would create a revocable trust and name a trustee. Once the parents passed away, the trustee would then sell the property and then the funds from the sale would be given to the listed beneficiaries.