Trusts

Do Houston Residents Need Revocable Living Trusts?

Published on: August 1, 2014 | By McCulloch & Miller, PLLC

Every so often, a client will come in and announce that he or she needs a revocable trust. Typically the request stems from something the client has read in a book or article, or perhaps advice from a neighbor or friend. Of course, not everyone needs a revocable trust …

As revocable living trusts continue in popularity, many first-timers think that is the solution to their estate planning needs. Usually a friend or family member who has a trust will suggest it, or they may have read articles online suggesting everyone needs to have a revocable living trust. Being new to the estate planning world, they assume this is something they need too. The truth is that revocable living trusts are designed for particular estate planning situations. They are not necessary in every situation.

A recent article in Financial Planning titled “Does Your Client Need a Revocable Trust?” considered common situations that might call for a revocable living trust. The list includes:

The Power to Adjust the Trust

Published on: July 22, 2014 | By McCulloch & Miller, PLLC

Today’s low interest rates create special problems for those focused on income, including retirees and the income beneficiaries of trusts.

Prolonged periods of low interest rates can result in low trust income, creating conflict among beneficiaries. Many trusts are set up in a way that creates two different groups of beneficiaries. The first group are income beneficiaries who have a right to the current income the trust property generates. Another group are remainder beneficiaries. They get what is left in the trust when the trust ends. Income beneficiaries naturally want the income maximized and remainder beneficiaries want the principal maximized.

As Forbespoints out, in an article titled “With Interest Rates Low, Here's How To Boost Income From A Trust,” low interest rates make it difficult for trustees to keep both groups happy. There simply are not enough good investment vehicles available to keep both groups of beneficiaries happy in low interest rate environments. The solution is known as the power to adjust. This allows trustees to reclassify trust assets. Forbes has an example of how it can work: “By utilizing the power to adjust, trustees are able to invest in the best total return portfolio without regard to the amount of income it generates; so, for example, in the current low-rate climate, this may result in a portfolio that is primarily equity. The power to adjust allows the trustee to take a certain amount of principal, reclassify the assets as income, and distribute the assets to the income beneficiary.”

Can Your Houston Estate Grow After Death?

Published on: July 17, 2014 | By McCulloch & Miller, PLLC

Who knew a “Walk on the Wild Side” could pay off so handsomely? Late rock legend Lou Reed left behind a $30 million fortune, The Post has learned. $20 million-plus in “money and other property” doesn’t include the approximately $10 million in gifts Reed left to his wife, sister and mother in his will. It also doesn’t include life insurance or retirement accounts. The funds are likely from Reed’s copyright and publishing interests …

Everyone probably knows some of the late Lou Reed's songs, such as “Walk on the Wild Side” and “Sweet Jane.” Even though Lou Reed was already a rock and roll legend, he had never had a true number one hit. The songs were not even in the top 10 in the United States. This left Reed with approximately $10 million in assets at the time of his death.

Reed's manager recently filed papers in court that he had already garnered another $20 million in assets for Reed's estate. The New York Post recently reported on how the money was likely earned. The article is titled “Lou Reed left behind $30 million fortune.”

Are You A Pet Owner? Add A Pet Trust To Your Estate Plan

Published on: May 16, 2014 | By McCulloch & Miller, PLLC

As with estate planning for humans, creating a pet trust is designed to give owners peace of mind. To ensure that pets will be cared for in accordance with an owner’s wishes, owners should be sure to definitively detail their pet’s standard of living and nutritional and health care.

Although pets are a beloved part of one's family, in the eyes of the law they are merely viewed as another form of property. This can make planning for the care of your pet difficult after you’re gone. While you can’t leave an inheritance to a pet, when including a “pet trust” as part of your estate plan you can provide for their care when you’re not there to provide it yourself.

“Pet trusts” have a decidedly less serious ring about them than a “Grantor Retained Annuity Trust.” Legal jargon aside, pet trusts can be plenty useful little devices for a common problem, especially amongst elderly pet lovers. In fact, a recent article in the Millionaire Corner considers a pet trust an estate planning basic. The article, titled “Estate Planning Basics: Creating a Pet Trust,” offers some practical pointers to consider.

Houston Investors May Realize Tax Savings With Frozen Assets

Published on: April 1, 2014 | By McCulloch & Miller, PLLC

Estate freezing, under the right circumstances, can become a vital component of an intelligent wealth preservation strategy.

A “frozen asset” can be viewed as an investment that refuses to move with the market. Fewer things are more annoying to a savvy investor! If an investment isn't growing, what is the point?

No, Gordon Gekko is not the only one to see it this way, either. Then again, if you are not investing in growth, but in your family and a powerful estate plan, there are some times when capping or transferring growth and, yes, even “freezing” assets is a definite boon.

Protect Your Beloved Pet With A “Pet Trust” in Houston

Published on: February 10, 2014 | By McCulloch & Miller, PLLC

"Pet trusts aren't just for the wealthy," says Frances Carlisle, a trust and estates attorney in New York. For most pet owners, she adds, the goal "is to make sure a plan exists for the care of the animal."

Do you own a pet? It seems as though more and more people are taking in pets these days. In fact, from 2010 to 2012, the number of pet-owning households increased from 62% to 68%. Consequently, more pet owners are taking their beloved pets into consideration when it comes to their estate plans.

Maybe you have heard the term “pet trust” before. Even if you have, The Wall Street Journal has provided the latest information on planning for your pet and some noteworthy statistics in a recent article titled “More Americans Are Writing Their Pets Into Their Wills.”

Options in Houston Include Six Unique Trusts For Unique Circumstances

Published on: February 4, 2014 | By McCulloch & Miller, PLLC

You might be a candidate for a trust that you never needed before.

A trust is a great tool within an estate plan, one with unique goals depending upon the one making the plan. Some goals are very common, while others don't exactly follow the mainstream.

A recent lighthearted Forbes article titled “Six Trusts For The Person Who Has Everything Else” pulled back the curtain for a look into the world of unique trusts for unique circumstances. [Spoiler alert: There are really four trusts, one special bank account, and one misguided attempt to emulate the trust format.]

Houston Residents: Time for A Check-Up For Your Trust

Published on: January 24, 2014 | By McCulloch & Miller, PLLC

… Make sure that you understand what is in your trust. Other issues, particularly those related to tax issues, will require consulting with an estate planning professional.

Do you have a trust? Trusts are powerful estate planning tools, those of which should be properly established and properly maintained. When it comes to revocable trusts, also known as “living” trusts, ElderLawAnswers offers a convenient and instructive checklist of the things to watch and the things that can go wrong in an article titled “9 (Potential) Problems with Your Trust.”

These nine (potential) problems reside in these questions:

The Many Methods Of Leaving An Inheritance in Texas

Published on: January 22, 2014 | By McCulloch & Miller, PLLC

People who take good care of their children take good care of their money, and people who take good care of their money take good care of their children.

Money can bring about both the good and the bad, depending on how one uses it. So you can imagine how concerning it is for parents and grandparents to make the best decisions for their heirs regarding their inheritances. A recent Forbes article titled “What Can We Do With Money For Our Kids?” explores a few tools that may help.

As an alternative to gifting money outright to your children or grandchildren, the article explores Roth IRAs, 529 plans, annuitized gifts, and even UTMA/UGMA accounts. While there are many wealth transfer tools and methods, the key is asking yourself a few important questions upfront.

Houston Families Should Carefully Plan for a Special Needs Beneficiary

Published on: December 23, 2013 | By McCulloch & Miller, PLLC

Planning for a special needs beneficiary can be incredibly complex, so it’s generally best to consult with a knowledgeable attorney in your state who specializes in this area.

Estate planning helps to ensure our loved ones will be taken care of when we are no longer here. These plans are done with great care and consideration. Furthermore, our loved ones with special needs will require some extra special planning to make sure their needs are met.

Special planning is, of course, very much tied to the needs of your child with special needs and to the needs of the rest of your family. As you might imagine, such planning entails important tools, rules and guides. To get started, consider a recent article in The Slott Report titled “3 Tips When Planning for a Special Needs Child.”