Estate Planning

Common Texas Estate Planning Mistakes

Published on: November 6, 2020 | By McCulloch & Miller, PLLC

Creating a Houston estate plan is critical to ensure an individual’s wishes are met after their passing. However, when estate plans include mistakes or are not done properly, they can cause major, costly headaches for loved ones. Below are some common pitfalls that individuals should avoid when drafting or updating their estate plan. Also, check out our eBook on the Top 15 Estate Planning Mistakes.

Not Naming Contingent Beneficiaries

A common estate planning mistake is not naming a contingent beneficiary on retirement accounts, trusts, and insurance policies. A contingent beneficiary is an individual who benefits from an estate plan if the primary, named beneficiary is deceased or unable to be located. If a contingent beneficiary is not named as a part of the estate plan – and the named beneficiary dies before the assets of the estate plan are distributed – the estate may be subject to Texas probate court, additional costs and delays.

The Implications of Texas Intestate Laws

Published on: October 15, 2020 | By McCulloch & Miller, PLLC

Getting to Know the Texas Intestate Laws

As we’ve mentioned in previous blog posts, a will is the cornerstone of any Houston estate plan. In a will, a person can determine what will happen with their property. However, not having a will does not mean that someone’s property will end up with the state. Instead, the Texas intestate laws dictate how the property will be distributed.

Texas intestate laws determine how an individual’s property is passed on. Rather than take a look at subjective factors such as close relationships or the deceased’s intentions, the intestate laws look only to the surviving family members of the deceased. This is not necessarily a problem if the deceased has no children, or family members all can agree on what the deceased’s intentions were. However, that is not often the case.

The Benefits of Having an Attorney Through Texas Probate Proceedings

Published on: October 13, 2020 | By McCulloch & Miller, PLLC

Under Texas law, the probate process is triggered when a person dies and leaves property without directly transferring ownership to another party. Probate is the process in which a court recognizes a person’s death, resolves debts, and distributes assets according to their will. If the decedent dies with a will, the estate’s representative or executor must file for probate. In situations where a person does not leave a will, the person’s assets and debts will go through intestacy laws.

The probate process requires a court to determine whether a will is valid. After hearing arguments on the will, the court will appoint a person to administer the estate and determine heirs. After determining heirs, the court will notify creditors of the death and allow them to file claims on any debts the estate may owe. After creditors make their claims, the court will distribute assets and resolve any disputes.

Families should understand that there are two main types of probate processes, “independent administration” and “dependent administration.” Independent administration cases tend to be quicker and less expensive. In most cases, however, the will must provide for independent administration. There are ways to get around this requirement if the lawyer or executor makes the appropriate argument to the court. On the other hand, dependent administration of estates occurs when there is any dispute regarding the beneficiaries or asset distribution.

Do You Have to Pay Estate Tax if You Have a Houston Estate Plan?

Published on: October 6, 2020 | By McCulloch & Miller, PLLC

Even among those who have an estate plan in place, many are unaware of the potential taxes their heirs will need to pay. However, depending on the estate’s value, heirs may need to pay a significant amount of estate tax after the owner of the estate passes away. In short, an estate tax is a tax on property that is transferred from the deceased to their heirs. There is no Texas estate tax. However, there is still a federal estate tax to consider. Thus, it is important to work with a qualified Houston estate tax attorney to reduce or eliminate estate taxes. The questions below are those most commonly asked about preparing for an estate tax and the intricacies of the tax itself.

How Does an Estate Tax Work?

A federal estate tax is based on the fair market value of the estate’s “includible property.” Includible property may consist of cash, real estate, trusts, business interests, and other assets. Some assets may be deducted from the taxable estate, such as mortgages and other debts, administrative estate expenses, and qualified charities. Additionally, surviving spouses are normally exempt from these taxes. It is when the surviving spouse dies that any other beneficiaries may be forced to pay estate tax.

What Constitutes Non-Probate Property in Texas?

Published on: October 3, 2020 | By McCulloch & Miller, PLLC

Probate is the process in which the court validates a will and distributes the deceased’s property according to the terms of their will. While probate is the default process in many situations, there are ways to avoid this lengthy and potentially costly process. In fact, one of the primary purposes of a Houston estate plan is to avoid probate.

Assets that are mentioned in a will are typically passed on to those named in the will. However, certain classes of assets are referred to as non-probate property. Non-probate property consists of those assets that will automatically pass on to the beneficiary at the time of the owner’s death. There are several types of non-probate property.

Jointly Held Property

A Few Tips for Those Starting the Houston Estate Planning Process

Published on: September 29, 2020 | By McCulloch & Miller, PLLC

A Few Tips for Those Starting the Houston Estate Planning Process

Few people look forward to creating an estate plan. However, the importance of creating a Houston estate plan cannot be overstated. By taking action now, individuals can ensure that they have the means to provide for themselves while protecting everything that they have worked so hard to obtain throughout their life.

For many, the concept of estate planning can be overwhelming. Below is a checklist of important steps for those who are thinking about how to start the estate planning process.

Take Inventory:

How Business Owners Can Use Insurance As a Houston Estate Planning Tool

Published on: September 15, 2020 | By McCulloch & Miller, PLLC

From creating a will to establishing a revocable trust, there are many tools and options available to individuals creating a Houston estate plan. However, many people are unaware of the role insurance can play in an estate plan, especially for small business owners. Many estate planning attorneys will advise their clients to obtain life insurance, if they do not have it already, when planning ahead for their future. Besides merely obtaining insurance, there are vital steps business owners should follow when creating an estate plan.

Why Purchasing Life Insurance is Vital

Nothing can replace the loss of a loved one; however, having insurance can help soften the financial blow if tragedy strikes. If the loved one was an owner of a business and the family is looking for someone else to purchase the company, an insurance policy can allow the family to take the time to transition the company during a new period of leadership. Without life insurance during this time, the family would be a majority owner in a business they do not want to run and, often, requires a more experienced person to lead.

Helping Pay for College Through a Texas Qualified Tuition Plan

Published on: September 4, 2020 | By McCulloch & Miller, PLLC

With colleges starting the fall semester around the country, worries about paying for higher education and making ends meet often come to students’ minds. Family members, like parents and grandparents, will often want to help their loved one pay for college if they are able to; however, at the same time, they do not want to do so at a detriment to their own financial future. One popular method to help a student with their college costs is a qualified tuition plan. A qualified tuition plan is a type of Houston estate planning tool that allows a person to contribute to another’s higher education expenses without having to pay taxes on these contributions.

What is a Qualified Tuition Plan?

A qualified tuition plan lets a loved one, called a contributor, to either prepay their student’s qualified expenses at an educational institution or to contribute to a designated account to pay these costs. A contributor can put their funds toward tuition as well as fees, books, supplies, and equipment required to participate in the educational program. However, contributions to a qualified tuition plan cannot exceed the amount necessary to provide for the beneficiary’s expenses.

Houston Estate Planning Tips for the “Sandwich Generation”

Published on: August 9, 2020 | By McCulloch & Miller, PLLC

It can often be tricky enough to raise children; however, for those raising children and taking care of their own aging parents, the workload is doubled. The “sandwich generation” is a term that refers to those who are simultaneously caring for their own children as well as their elderly parents. While the stress may seem insurmountable for those juggling both of these tasks, there are ways to plan ahead and manage these challenges through the use of an effective Houston estate plan.

Compile Emergency Information about Aging Parents

Even before it seems necessary, it is important for people to have emergency information about one’s parents readily available. Having the following information easily accessible can save people from frantic moments after an unforeseen medical emergency has occurred: copies of insurance and prescription cards, the contact information of primary care physicians, basic medical history, and a current list of medications and dosage. Additionally, it is critical to have an elderly parent’s financial information on hand, such as contact information for banks and a list of financial accounts, in case of incapacitation or other emergencies. Check out our wonderful Family Document Checklist Tool.

The Importance of Choosing the Correct Trustee in Your Estate Plan

Published on: August 6, 2020 | By McCulloch & Miller, PLLC

Ensuring how a person’s assets and property will be handled after death is a critical first step when drafting a Houston estate plan. Often, a comprehensive estate plan involves the creation of one or more trusts. Thus, the second step of estate planning, determining who to name as a trustee, is often just as vital.

Serving as a trustee is time-consuming and complex. Although individuals often select a family member or close friend to serve as the trustee, picking a professional trustee can often eliminate a lot of the common issues that trustees face when executing an estate plan. Because a trustee will be responsible for ensuring an individual’s assets are distributed in a fair and legal manner, there are factors to consider when choosing a person to serve as the trustee of the estate:

Ability to Make Difficult Decisions