Trusts

Crummey Trusts: Viable Tool for Houston Families?

Published on: June 1, 2015 | By McCulloch & Miller, PLLC

Actually the trusts are Crummey trusts named after one D. Clifford Crummey who won a decision in the Ninth Circuit in 1968, when I was just a high school lad. Israel and Erna Mikel were just in Tax Court showing how powerful the Crummey power can be as they used it to shelter over $1.4 million in transfers to their family trust from gift taxes. An arbitration clause that called for the use of a religious court caused the IRS to challenge the validity of the exclusions, but the Tax Court ruled in the taxpayer’s favor.

Trusts can have pretty funny names. Take the Crummey trust for example – doesn’t sound very good, does it? Who wants a “crumby” trust? Let’s explore this tool further.

A recent Forbes article, titled “Religious Arbitration Clause Does Not Hurt Million Plus Gift Tax Exclusion,” reminds us that there’s an annual exclusion from gift tax. Reminder: every year you can give the annual exclusion amount ($14,000 this year) to as many people as you want without any gift taxes or disturbing the unified credit against transfer taxes. However, to qualify for the exclusion, the gift has to be of a “present interest”.

Should An IRA Trust Be Part of Your Houston Estate Plan?

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

An IRA Trust can be a beneficial estate planning tool for families under certain conditions. However, many investors are unaware of the IRA Trust and the benefits that it may provide.

Trusts are only for the super wealthy, right? Wrong!

The Kokomo Perspective recently posted an article titled “Are You Trustworthy?” The article explains that due to all the recent rule and distribution changes to IRAs and other retirement accounts, the IRA Trust has become much more popular and effective. An IRA Trust is a special type of revocable living trust that’s designed to receive your IRA accounts for the benefit of your loved ones after you pass away. The IRA Trust offers both protection and control.

Should a Trust Last 360 Years? Several Mississippians Think So

Published on: March 30, 2015 | By McCulloch & Miller, PLLC

Legislation allowing Mississippians to place their assets in a trust for up to 360 years passed the state House and is now pending before Gov. Phil Bryant.

How long should a trust really last?

According to the Northeast Mississippi Daily Journal, Mississippi’s House Judiciary Chair Mark Barker said many states were passing laws allowing for the establishments of trusts for 360 years or longer. He also commented that this is actually the process already since there are loopholes in the existing state rules against perpetuities.

Estate Planning for Houston Families without the Stress

Published on: January 7, 2015 | By McCulloch & Miller, PLLC

Wouldn’t knowing someone will step in if you become incapacitated create a little peace of mind? Wouldn’t knowing that your family is taken care of create even more peace of mind? Wouldn’t knowing there is a plan in place – a plan you developed – if something happens to you take a significant weight off your shoulders?

Estate planning can do a lot of things for you, but one of the most valuable takeaways is peace of mind.

A recent Forbes article, titled “11 Fundamental Elements of a Stress-Free Estate Plan,” provides practical advice on how to design a plan that protects your assets and provides for loved ones. While everyone’s individual needs are a bit different, there are some basic components you need to examine along with deciding who gets what.

A Review of Perpetual Trusts?

Published on: December 15, 2014 | By McCulloch & Miller, PLLC

“Why do we care about these perpetual trusts?” Mr. Sitkoff said. “Because there’s a lot of money in them. Billions of dollars is pouring into these jurisdictions.”

Perpetual trusts: good or bad? The principle of this tool is up for debate.

Perpetual trusts allow trust creators to maintain some control after they pass, and help protect fortunes from taxes and creditors. However, people who set up these perpetual trusts in states where they’re legal could have some headaches as lawsuits brought in a state where the trusts are prohibited could mean the out-of-state assets could be counted in any settlement.

Only the Rich Need a Trust in Houston? Wrong!

Published on: December 9, 2014 | By McCulloch & Miller, PLLC

By keeping even modest sums of money protected, trusts can ensure that your wishes for your money will be honored into the future.

A recent article by the Motley Fool,titled "5 Things You Didn't Know — but Should! — About Trusts," sheds some light on common misperceptions of trusts.

Here are a few beneficial takeaways from the article for Houston families:

Houston Residents Should Aim Straight For a Gun Trust!

Published on: November 26, 2014 | By McCulloch & Miller, PLLC

By putting ownership in trust and designating a knowledgeable person to oversee an individual’s firearms, the chance of such issues arising is minimized. Plus, paperwork requirements for transferring guns are streamlined and the trust prevents information about a valuable collection that might be of interest to thieves from being made public during the probate process.

A recent ABA Journal article, titled “Got valuable firearms? A gun trust can be a helpful estate-planning tool,” explains the benefits of a gun trust.

The thinking behind this strategy? By putting gun ownership in trust and naming a knowledgeable person to look after your firearms, the chance of trouble and issues coming into play upon your incapacity or death is minimal.

Get The Latest on Grantor Trusts

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

“Income-tax rates are going up so it becomes more expensive for a grantor to maintain the grantor trust status of a trust they’ve set up,” says Lynn Halpern Lederman, managing director and senior fiduciary counsel – Northeast Region at Bessemer Trust, a New York firm that oversees $97.5 billion.

A Wall Street Journal article, titled "Rethinking Some Grantor Trusts," says that the latest bull market created potentially substantial taxable gains for individuals—and with the top federal rate on long-term capital gains at nearly 24%, as compared to 15% in 2012—there's a concern that some people may have a harder time paying that income tax bill.

How does this affect grantor trusts?

Living Trust Advantages for Houston Families

Published on: October 21, 2014 | By McCulloch & Miller, PLLC

A revocable living trust is similar to a will in that it indicates how you would like your assets to be distributed after your death and can be amended anytime. While you should always have a will, a living trust—which is simply a trust set up during your lifetime as opposed to one created after your death—can be a valuable addition to your estate plan. Here’s why.

If you have a will, do you really need a living trust? Let's explore the advantages of living trusts to find out.

A recent article in Time, titled "Why This Estate Planning Tool Beats Just Having a Will," gives several reasons to consider living trusts.

Trust Myths Busted for Houston Families

Published on: October 9, 2014 | By McCulloch & Miller, PLLC

They can be incredibly useful tools, and thanks to the publicity, more people may consider using them, but many people misunderstand how trusts work. Let's take a look at — and dispel — three common myths about them.

Are trusts too much work? Are they only for the rich and famous? Do you really need to establish a trust before you die?

Trusts can be very useful tools, but few people understand how trusts work. Daily Financerecently posted an article titled "3 Myths About Trusts That You Can't Afford to Believe." This article examines and dispels three common myths about trusts.