IRA Category Archives — Houston Estate Planning and Elder Law Attorney Blog Published by Houston, Texas Estate Planning and Elder Lawyers

Qualified Charitable Distributions for Texas Retirees

Published on: August 16, 2026 | By McCulloch & Miller, PLLC

Qualified Charitable Distributions for Texas Retirees

Last updated August 23, 2026 · Reviewed by Thomas W. McCulloch

A retiree who gives to a church, a university, or a local charity by writing a check is using after-tax dollars and then hoping the deduction survives the return. There is a different route for anyone who has reached 70½ and holds an individual retirement account. The money can go straight from the IRA to the charity, and it never appears in taxable income at all.

That route is the qualified charitable distribution. For a Texas retiree who takes the standard deduction, a QCD is often worth more than the same gift made by check, because the tax benefit does not depend on itemizing. It became more valuable for the 2026 tax year, when a new floor started limiting charitable deductions that a QCD sidesteps entirely. McCulloch & Miller advises Dallas and Houston families on charitable planning, and this is the tool that fits the largest number of ordinary retirees.

How a Qualified Charitable Distribution Works in Texas

A qualified charitable distribution is a payment made directly by an IRA trustee to a qualifying charity on behalf of an account owner who has reached age 70½, excluded from the owner’s gross income up to an annual cap. The definition sits in 26 U.S.C. § 408(d)(8).

Two mechanics do the work. First, the transfer has to be made directly by the trustee under § 408(d)(8)(B)(i). A distribution paid to the account owner who then writes a check to the charity is an ordinary taxable distribution, and the sequence cannot be repaired afterward. Second, § 408(d)(8)(D) turns off the usual proportional rule for IRAs with after-tax money in them, so the QCD is treated as coming from the pre-tax portion first.

Inherited IRA Rules in Texas and the Annual Withdrawal

Published on: August 13, 2026 | By McCulloch & Miller, PLLC

Inherited IRA Rules in Texas and the Annual Withdrawal

Last updated August 23, 2026 · Reviewed by Thomas W. McCulloch

Most people who inherit a parent’s IRA are told one thing about it, which is that the account has to be emptied within 10 years. That is part of the rule and not all of it. For a large group of beneficiaries, a withdrawal is also required in each of the years along the way, and skipping those years does not simply postpone the tax.

The inherited IRA rules in Texas are federal, and the current version comes from Treasury regulations finalized in 2024 that apply to required minimum distributions for calendar years beginning on or after January 1, 2025. The annual requirement does not reach every beneficiary. It turns on when the original owner died relative to that owner’s required beginning date, and on which category the beneficiary falls into. McCulloch & Miller works with Houston families on estate planning where retirement accounts are often the largest asset passing to the next generation.

Inherited IRA Rules in Texas After the Final Regulations

An inherited IRA is a retirement account that passes to a beneficiary at the owner’s death and is retitled for that beneficiary, who must withdraw the balance under a schedule set by federal law rather than leaving it in place indefinitely.

Issues Surrounding the Inheritance of a Texas IRA

Published on: August 31, 2021 | By McCulloch & Miller, PLLC

When family members think about what assets they may receive after a loved one has passed away, they often think about physical property or sentimental objects. However, another common inheritance is an individual retirement account or an IRA. An IRA allows an individual to save money for retirement with tax advantages. There are strict rules regarding an IRA and how a beneficiary can use it. Because of this, beneficiaries may be confused about how to manage their new IRA and the specificities surrounding the account. Below are common questions and explanations about IRAs and retirement planning.

What is an IRA?

An IRA (individual retirement account) is a financial account set up for individuals to save for retirement. IRAs are either tax-free or are set up on a tax-deferred basis. There are also different types of IRAs, including a traditional and Roth IRA. The major distinction between these two IRAs is the timing of the tax advantages. Traditional IRAs allow individuals to make contributions now and the earnings are tax-deferred until the money is withdrawn. On the other hand, with Roth IRAs, individuals make contributions with money they have already paid taxes on—therefore, the money will grow tax-free.

What is the SECURE Act and How Does It Affect Houston Estate Planning?

Published on: September 17, 2020 | By McCulloch & Miller, PLLC

Creating a Houston estate plan and preparing for retirement can often be an extremely stressful process, especially with the passage of new laws and regulations that impact a person’s plans. One such law that affected many people’s retirement savings was the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The SECURE Act came into effect on January 1, 2020, and created new requirements for defined contribution plans, such as 401(k)s and individual retirement accounts (IRAs). Below are some of the retirement and estate planning aspects most impacted by the passage of the SECURE Act.

Individual Retirement Accounts

Prior to the SECURE Act, an individual had to start withdrawing funds from their IRA, called required minimum distributions (RMDs), after they turned 70 ½ years old. Now, individuals are not required to withdraw from their IRA until they reach 72 years old. As there are income tax payments associated with RMDs, the SECURE Act can help reduce a person’s overall taxation rate. The SECURE Act also removed the age limit for IRA contributions; now, people can contribute to their IRA at any age, as long as they are still working. Before the passage of the SECURE Act, where removing funds from an IRA before turning 60 years old would make the withdrawal subject to income tax, people can now draw up to $5,000 from an IRA penalty-free after the birth or adoption of a child.

You Could Be Hit with Penalty for an Early IRA Withdrawal

Published on: February 20, 2020 | By McCulloch & Miller, PLLC

Most financial experts would agree that it is rarely, if ever, a good idea to take an early withdrawal from a traditional IRA or Roth IRA. This is due in part to the high cost of penalties that can hit an account holder for an early withdrawal (not to mention losing out on years of potential earnings).

Early distributions from IRAs—before you reach 59½—typically are hit with a 10% tax penalty, and you may owe income tax on it. The IRS uses the penalty to discourage IRA account holders from dipping into their savings before retirement. However, the penalty only applies if you withdraw taxable funds, says Investopedia, in its new article entitled “Early Withdrawal Penalties for Traditional and Roth IRAs.”

If you withdraw funds that aren’t subject to income tax, there’s no penalty for distributions taken at any time. The issue of whether the funds are taxable depends on the type of IRA. Early distributions from traditional IRAs are the most likely to incur significant penalties. That’s because you make contributions to this type of account with pretax dollars. These are subtracted from your taxable income for the year, which will decrease the amount of income tax you'll owe. As a result, since you get an upfront tax break when you contribute to a traditional IRA, you have to pay taxes on your withdrawals in retirement.

What Don’t I Know about My Roth IRA?

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

New research from TD Ameritrade finds that many individuals are confused when it comes to Roth IRAs — accounts that are funded with post-tax money. Consequently, many people are leaving cash on the table, when it comes to maximizing this savings strategy.

CNBC’s recent article entitled “Not knowing these Roth IRA truths can cost you” explains the biggest things that investors typically don’t know about Roth IRAs. They include not knowing how to decide between a Roth IRA and Traditional IRA, along with the fact that you can contribute to a 401(k) and a Roth IRA.

You’re allowed to contribute to a 401(k) and a Roth IRA. Many workers get their retirement savings education from their employer. Those employer-provided plans are usually 401(k) plans, and you generally want to contribute enough to that account to get the employer match. However, what 60% of investors incorrectly think is that you can only contribute to a Roth once you reach your 401(k) maximum, according to TD Ameritrade’s research. It’s okay (and smart) to be contributing to both a Roth IRA and a 401(k) at the same time. You don’t have to hit the 401(k) max to contribute to a Roth IRA.

How Will the New SECURE Act Impact My IRAs and 401(k)?

Published on: January 7, 2020 | By McCulloch & Miller, PLLC

“A new law could affect the IRAs and 401(k)s of millions of Americans in 2020.”

The SECURE Act is the most substantial change to our retirement savings system in over a decade, says Covering Katy (TX) News’ recent article entitled “Laws Change for IRA and 401K Retirement Savings Plans.” The new law, called the Setting Every Community Up for Retirement Enhancement (SECURE) Act, includes several important changes. Let’s take a look at them.

There is a higher age for RMDs. The current law says that you must start taking withdrawals or required minimum distributions from your traditional IRA and 401(k) or similar employer-sponsored plan when you turn 70½. The new law delays this to age 72, so you can hold on to your retirement savings a while longer.

Should A Trust be an IRA Beneficiary?

Published on: October 18, 2019 | By McCulloch & Miller, PLLC

An IRA is one of the most popular ways to save for retirement. The possibility, however small, does exist that you will pass before using the entire IRA. How do you decide who to leave your IRA to?

In addition to leaving assets, including IRAs and 401(k)s, to heirs, you can also leave assets to a trust. When you first open an IRA, you are asked to designate a beneficiary. However, over time you may find yourself wanting to change that designation. You may also be doing sophisticated estate planning that involves having a trust as the beneficiary for your IRA.

KTVA.com’s recent article, “How to Name a Trust as Beneficiary of an IRA,” discusses some of the important elements of naming a trust as an IRA beneficiary. Naming a trust as a beneficiary requires careful planning, so work with an experienced estate planning attorney.

Make Sure Your Estate and Your Kids are Ready for the Kiddie Tax

Published on: October 16, 2019 | By McCulloch & Miller, PLLC

Whenever there are major changes to tax laws, estate plans need to be reviewed. The change to the kiddie tax because of the Tax Cuts and Jobs Act of 2017 is an excellent example of this.

If your estate plan includes passing down traditional IRAs to children and grandchildren, you better make an appointment with your estate planning attorney soon. Changes that began with the 2017 Tax Cuts and Jobs Act may turn your planning inside out. Your children might find themselves in the top tax bracket, which is not likely what you had in mind.

The Tax Cuts and Jobs Act brought about a big change in how children are taxed on unearned income. This includes required minimum distributions (RMDs) from inherited IRAs.

Why 59 ½ is A Milestone to Celebrate

Published on: October 11, 2019 | By McCulloch & Miller, PLLC

Those who happily enjoy senior discounts at national parks, fast food restaurants and movie theaters will tell you that turning 59 ½ is no big deal. Chances are at 59 ½, you’re still enjoying good health, working productively and wise enough to know you’re a bit smarter than you were back in the day.

59 ½ is around the time that people wake up to the idea that hey, they really are getting older. With that realization, they need to embrace the financial benefits of their age and there are more than a few, according to the article “What Should You Do When You Turn 59½?” from Kiplinger. Here are some of the advantages, and also a few to-do items.

Review Your 401(k). At age 59½, you reach the magic age when you can start taking money out of your retirement accounts without penalty. That’s not to say it’s time to drain your accounts, but it does give you more options.