Estate Planning

Checklist Serves as End-of-Life Care

Published on: February 25, 2016 | By McCulloch & Miller, PLLC

For a generation that is proud of their ability to ignore all kinds of taboos, millennials are no different than any other generation when it comes to discussing end-of-life care and estate planning with their parents. It's up to you, Baby Boomers, to initiate the conversation with your millennial children and make sure that they – and you – understand the basic documents needed for estate planning and end-of-life care.

Benzinga's recent article, "Millennials and Estate Planning: How to Get Started," says that when you do begin discussing end-of-life care, you need to understand the documents involved.

Here is a list:

California Legislators Provide Shortcut Law to Help Senior Homeowners

Published on: February 12, 2016 | By McCulloch & Miller, PLLC

Written by Assemblyman Mike Gatto (D-Glendale), a new law, AB 139, is unlike most of the over-reaching and bombastic legislation that originates in the State Capital. As reported in The San Diego Times-Union, "State ushers in refreshingly modest law," this new law makes one aspect of estate planning easier for California homeowners.

The measure, which passed unanimously in both the Assembly and the Senate, creates "a new, non-probate method for conveying real property upon death through a revocable transfer upon death deed." It's a simple way for people to transfer their home (or one-to-four-unit investment properties) upon their death – without having to pay for a living trust or having it all sorted out in probate court.

California had provided simple "payable upon death" forms for many valuable items, such as automobiles and stock accounts, but not for real property. Creating a trust has many advantages, but legislators realized that without a trust, the estate would be handled in a potentially lengthy probate process.

Houston Parents Need to Protect Children with Estate Planning

Published on: January 14, 2016 | By McCulloch & Miller, PLLC

An unmarried father-to-be asked what he needs to do to protect the mother of his child in the column "Having a baby, but not married? Some financial advice," from New Jersey 101.5. His concern is well founded because if something unfortunate happened to him, she would not be first in line for his assets. He also asks if the necessary documents are prepared while they are unmarried, what needs to be changed when and if they do get married?

In many states, the rights of unmarried couples are different than those of married couples. As far as a minor child, child custody issues are the same whether or not you are married, as the courts make decisions based upon the best interest of the child. Of course, the surviving parent will be the default guardian, but in the event that both parents die, issues can arise without a will and the designation of an alternate guardian. In addition to an unforeseen death, you also need to consider what could happen if you and your partner split up.

Distribution of property is very different between married and unmarried couples that break up. If you are married, almost all property will be distributed equitably and alimony can be awarded. However, when unmarried couples split up, individual property is retained by the original owner—and only jointly-owned property, like a home with both names on the deed, is divided between the parties. Further, neither party of an unmarried couple gets alimony, but this can be addressed by an unmarried couple if they sign a Cohabitation Agreement.

Everyone Needs to Make Time for Estate Planning

Published on: January 1, 2016 | By McCulloch & Miller, PLLC

The only way to make sure that your wishes are carried out after your death is to have the proper estate planning documents prepared in advance, according to a post from WMUR.com, "Money Matters: Common estate planning mistakes." Some people make the mistake of thinking that estate planning will be extremely complicated, while others think it will be far simpler than it ever could be. While every situation is different, there are a number of mistakes that are common at every income and asset level.

Failing to plan. Many of us don't have a will—but like it or not you do have an estate plan. The plan is called the law of your state and the probate judge. If you die without a will, your estate will be divided according to intestacy laws. In that case, there's no guarantee this will be what you wanted. A one-page will or a more complex plan with other strategies like a trust can help reduce estate taxes, save on administrative costs, and put you in the driver's seat when deciding how your assets are to be distributed to your heirs, charities, or to help a family member with special needs. Another important point: in many states a will is the only way that you can name a guardian for your minor children. So, if you move from one state to another, be sure to check local laws.

Failing to maximize your marital estate exemption. The new portability law provisions ease some of the estate tax planning burden by allowing each individual a $5.43 million federal estate tax exemption in 2015. If one spouse dies without using up his or her $5.43 million, the unused portion may be transferred to the other spouse for use at the survivor's death (hence the term "portable."). You should also remember to investigate any state estate taxes when reviewing your strategy and make certain to discuss how portability is elected with your attorney.

Thanksgiving Dinner: Time to Discuss Estate Planning?

Published on: November 24, 2015 | By McCulloch & Miller, PLLC

Long-standing American family traditions are changing with the times. The sled trips through snowy woods and icy rivers have given way to cross-country jet flights and international Skype visits. But regardless of the changes, when you all do sit down to a holiday meal, according to thestreet.com's "Estate Planning Over Thanksgiving? Time to Talk Turkey," this is a perfect time to start talking about important family matters, including estate planning.

If families or cultures are averse to raising such topics around the holidays, there should be an annual meeting to let family members know where an estate plan stands.

When combing through assets, remember that no item is too small for discussion, especially during the holidays. It is a natural time for emotions to run high, but it is a great time to discuss items of seemingly insignificant value that may take on added significance for each potential heir.

Robin Williams Will Limits Use of Likeness

Published on: November 13, 2015 | By McCulloch & Miller, PLLC

Certain celebrities continue to earn phenomenal amounts of money, even though they are deceased. Using advanced technology, audiences enjoy what appear to be live performances and new material from actors and singers who have been gone for decades. Holograms are good enough to convince stadiums filled with fans that they are seeing the real deal.

For the estates that hold the rights to the likenesses of celebrities this can earn millions of dollars a year. Such is the case with the likenesses of Michael Jackson, James Dean, Betty Page and many others.

Not every celebrity, however, is comfortable with the idea of their name and likeness being used after they pass away to make money.

Escheatment: Monitor Unclaimed Property Lists

Published on: November 12, 2015 | By McCulloch & Miller, PLLC

A state government has the legal right to claim the property of a person who has passed away and has no heirs or beneficiaries. Here's the problem: almost all state governments today are experiencing significant shortfalls in revenues. As a result, some states have become a little too eager and too aggressive about claiming property through escheatment.

What often happens is that an account holder has not stayed in contact with a brokerage or financial institute for a long time. The financial institute then reports the assets in an account as unclaimed property. Rather than making any effort to locate the person who owns the account, the government claims the property as its own. This can create issues for people who have long term investments as part of their retirement and estate plans.

Recently, Investopedia listed how you can avoid this happening to your stock accounts in "4 Ways to Avoid Escheatment of a Stock Account."

Titling Assets with Estate Planning in Mind

Published on: November 10, 2015 | By McCulloch & Miller, PLLC

Most married people tend to use the traditional way of owning property together, using "joint tenants with right of survivorship," known in estate planning circles as "JTWROS." Just as the name describes, when one of the spouses passes away, the surviving spouse becomes the sole owner of the property.

This has benefits for estate planning, as the property does not have to go through probate. However, there are potential drawbacks. If one of the owners is in debt, his or her creditors may be able to go after the property held jointly. If a parent holds property as a joint tenant with a child, it might make it so other children do not receive a fair inheritance.

Recently, Investor's Business Daily discussed alternatives to joint tenancy in "Best Ways To Title Your Assets — Avoid Traps," including:

Often Overlooked: How Will Heirs Pay the Estate Tax?

Published on: November 4, 2015 | By McCulloch & Miller, PLLC

We’ve heard or read the stories of wealthy families forced to sell off prized heirlooms so that hefty estate taxes could be paid. It is never a happy day when an heir needs to sell the family home, wine collection, fine art or collection of vintage automobiles to raise cash for the estate tax. Proper estate planning for wealthy families should include a rather simple solution to this problem: life insurance.

This was recently explained in the Wills, Trusts & Estates Prof Blog in "How Life Insurance Can Be Used To Help With Estate Taxes."

You may consider the creation of an irrevocable trust and make it the beneficiary of a life insurance policy.

Houston Families Note: Blended Families Require Extra Planning Effort

Published on: September 14, 2015 | By McCulloch & Miller, PLLC

Perhaps if Dr. Nathaniel Shafer knew what was to come, he may have made some changes to his will that might have precluded a nasty dispute between his wife and his children from a previous marriage. Dr. Shafer’s will leaves a $10 million estate entirely to his wife and her child from a different marriage, Dr. Shafer’s children from a prior marriage accuse their stepmother of filing a fake will. Estate planning for a blended family can be tricky.

Jennifer and Robert Shafer, the children from a previous marriage, are claiming that their stepmother filed a fake will. They want the court to throw that will out and to use an earlier will that leaves half of the estate to them. To prove their claim, the Shafer siblings are asking the court to waive a doctor-patient privilege so a therapist the couple saw can testify about their relationship.

The New York Post reported this story in an article titled "Siblings claim stepmom filed fake will to get $10M inheritance."