Houston Estate Planning and Elder Law Attorney Blog

A Living Trust: When to Get One and How to Know if It is Right for You

Published on: February 21, 2023 | By Thomas W. McCulloch

When clients and prospective clients come to us for their estate planning needs, their first priority is often asking us to help them write their wills. What many clients don’t know, however, is that wills are only one option clients have at their disposal. Trusts are another tool that can create security throughout the estate planning process. Trusts come in many forms – some address specific needs, while others are general and help individuals avoid the probate process.

A common misconception we see is that trusts are only for the super-wealthy. Trusts can be utilized, however, by any individuals that have assets they don’t want to go through the probate process. Probate is a legal procedure through which assets owned in a decedent’s name are distributed by a court. The kinds of assets that go through probate are typically assets like bank accounts, homes, cars, art, and bank accounts. These assets don’t pass directly to a decedent’s spouse or heirs, so it is the court’s job to make sure they are distributed fairly. Using this kind of trust instead of a will means that assets owned by your trust will totally avoid the probate process and go directly to your loved ones.

When an individual creates a living trust, then, they can take more control of where these assets will end up. Assets held in a trust are also taxed differently than if they are owned outside of the trust. Trust planning can reduce estate taxes, creating yet another benefit that many clients do not know about.

How a Houston Estate Planning Law Firm Can Step in When Financial Elder Abuse Becomes a Reality for You or a Loved One

Published on: February 15, 2023 | By David W. Miller

In the past, we have written in-depth on our blog about how to spot financial abuse among elderly people you love. The second question many clients ask, which is perhaps an even more important question, is what to do in the face of possible financial elder abuse. There is no “one size fits all” solution, but there are crucial steps you can take to make sure the older people in your life are well protected.

How We Can Help in the Face of Financial Elder Abuse

At McCulloch & Miller, PLLC, one of our specialties is long-term care planning. We meet with our clients, learn about their lives, and help them figure out how to choose and pay for their long-term care options. We take pride in making sure all the options that our clients are thinking through are safe and trustworthy so that our clients can decrease the odds they will experience financial abuse from a nursing home, residential facility, or caretaking team. If you think you or a loved one has already experienced financial abuse at a residential facility, we can help you think through how to switch facilities so that you feel safer and at peace with where you live. We can also talk you through the necessary steps for bringing an action against anyone that has taken advantage of you or a loved one so that you can get compensated for the harm you have suffered.

Spotting Elder Financial Abuse: How to Catch it Early and Prevent it from Becoming a Major Issue for Your Loved Ones

Published on: February 15, 2023 | By Thomas W. McCulloch

Elder financial abuse, by definition, is when an individual takes money or other assets away from an older person without permission. Unfortunately, when older people begin to exhibit signs of memory loss or decreased mental functioning, this kind of abuse is more likely to occur. Thus, as your loved ones get older, it is prudent that you look after their finances and make sure no one untrustworthy has access to (or the possibility of exploiting) their financial information.

Examples of Elder Abuse

The specifics of elder abuse can vary from case to case, and there is no one thing in particular that indicates an older person is being taken advantage of. One thing to look out for, however, is an elder person’s caretaker taking possession of their credit cards. It is easy for these cards to go unmonitored and thus for a caretaker to use the money for expenses not related to their job.

Another possible indication of financial elder abuse can be with someone takes control of an elder’s power of attorney. If, for example, a lawyer, manager, or advisor abuses her or his position, this can be a form of exploitation. It is important to keep a close eye on who has power of attorney over the older people in your life to make sure this position is not taken lightly.

How the New SECURE Act 2.0 Can Affect Your Estate Planning Goals

Published on: February 8, 2023 | By McCulloch & Miller, PLLC

How the New SECURE Act 2.0 Can Affect Your Estate Planning Goals

In the final days of 2022, the U.S. Congress passed a federal law known as the SECURE Act 2.0. This law addresses retirement accounts and distributions throughout the country and was signed by the president in late December. While this law primarily affects how Americans manage their personal retirement accounts, the new mandates will also affect how revocable trusts and other financial instruments can be managed.

The SECURE Act 2.0 is based on an acronym meaning Setting Every Community Up for Retirement Enhancement. According to an analysis published by a professional legal publication, a primary feature of the act is an adjustment of the minimum retirement age to begin making mandatory distributions from a 401(k) or traditional IRA account. Under the new law, retirees are permitted to wait until they turn 73 years old to begin withdrawing funds from their retirement accounts without an additional penalty. This change puts more control in the hands of retirees, permitting them to keep earning interest on their money for longer.

Another feature of the SECURE Act 2.0 is to increase the allowable amount of “catch-up” contributions to 401(k) and other accounts. Under the new scheme, people between the ages of 60 and 63 who deposited less than the maximum allowable amount earlier in life will be permitted to deposit at least $10,000 per year to their accounts, up to the maximum allowable amount. This change in the law will allow the aging population to invest money they earned or received later in life into their retirement accounts for later use without tax penalties.

What is a Fiduciary Duty with Regard to Trusts and Estate Planning?

Published on: February 8, 2023 | By David W. Miller

There are many terms in the field of estate planning that have become ubiquitous in the field, however, their meaning is often misunderstood. Trustee, beneficiary, executor, and fiduciary are some of these terms. The personal term “fiduciary” comes from the type of duty that a fiduciary owes to a beneficiary in a trust or financial management decision. This “fiduciary duty” is generally based upon a relationship or contract between a beneficiary and a fiduciary, or trustee.

The fiduciary duty is built upon a contractual relationship whereupon the fiduciary agrees to accept responsibility for the duty to manage the beneficiaries assets in the best interest of the beneficiary. An example of a fiduciary in the field of estate planning is the relationship between the trustee and the beneficiaries of a trust. A trustee is a person or entity (often a bank or law practice) that takes legal ownership of the trust assets and manages them in a way to benefit the beneficiaries and honors the trust. This management may include investing money, purchasing or selling assets, paying taxes, and managing legal or financial issues and disputes.

Fiduciary duties related to trusts and estate planning may involve specific obligations. The fiduciary has a duty of care to diligently inform themselves of the details of the trust assets in order to exercise sound judgment to protect the interests of the beneficiaries. Furthermore, fiduciaries owe beneficiaries a duty of loyalty, which includes removing themselves from decision-making that could pose a conflict of interest. Another duty of a fiduciary is to act legally and in good faith. A fiduciary should not break the law or behave unethically when handling the beneficiaries’ assets, especially if such dealings collaterally benefit the fiduciary. Finally, a fiduciary owes beneficiaries a duty of confidentiality. The fiduciary should not release the identity or any information about beneficiaries without a mandate or good cause.

Celebrity Wills Exemplify the Importance of Estate Planning

Published on: January 31, 2023 | By Thomas W. McCulloch

We have long expressed the importance of estate planning for everyone, regardless of status or income. One substantial step in estate planning is having a clear will that avoids dispute or probate issues. For most people, a will turns out to be a relatively straightforward document with little contention. For celebrities who commit certain estate planning mistakes, however, a will—or lack thereof—can become a public news story and topic of gossip. Some intriguing and even hard-to-believe celebrity will stories can show the importance of having a solid estate plan—even for people whose probate drama won’t be in the news.

Larry King’s Secret Will

Television and radio personality Larry King recently passed away in 2021, and his death prompted substantial court drama over his estate. He had a secret handwritten will—also known as a holographic will, which is not a will delivered by hologram!—which was allegedly written in 2019. His family did not find the will until he passed away. The handwritten will was contentious because, at one point, it left 20% of his estate to his children and the rest to his wife, whom he was still married to but estranged from. The two were going through a divorce, but it was not finalized at the time of his death. At some point, he crossed out this 20% figure and left all 100% to his children, disinheriting his wife. This handwritten change makes it difficult to verify on what date the change was made and whether or not King actually made the change himself. King’s estranged wife and his son eventually settled confidentially to avoid the legal battle after challenges and disputes.

What Are an Executor’s Duties?

Published on: January 31, 2023 | By David W. Miller

Many people familiar with Texas estate planning have heard of the “executor” of an estate. It is colloquially understood that an executor is a person assigned by a trustee to manage their final wishes and financial matters after the death of the trustee. Being chosen as the executor of an estate should be seen as an honor, as the selection demonstrates that the trustee has faith and confidence in the abilities and integrity of the chosen executor. Although the privilege of being selected as an executor is certainly a compliment, the responsibilities of executorship are often far more significant than a chosen executor may expect. A recently published article in a financial services trade journal discusses an executor’s duties.

The primary role of the executor is to ensure that the final wishes of the trustee are carried out in the best way possible. This includes both financial and other wishes, such as funeral arrangements, obituary, and the division of sentimental items. When a trustee has prepared a will, the executor is required to use that document as a guide to distributing the estate of the trustee. An executor’s duties may be extremely simple when the estate has little value or few beneficiaries.

High-value estates with more beneficiaries or complex financial assets (trusts, real estate holdings, stocks and options, businesses, annuities, etc.) may be more complicated for the executor. If the estate beneficiaries do not get along with one another or the executor and challenge the division in court, the work of the executor can include retaining counsel on behalf of the estate and working diligently to effect the trustee’s wishes to the best of their good-faith understanding of the will.

What Happens if Someone Challenges the Terms of a Texas Trust?

Published on: January 26, 2023 | By David W. Miller

While establishing a trust for your loved ones is often a wise choice, a number of pitfalls can make the experience more stressful than it has to be. Financial matters—and, in the case of a trust that goes into effect after the death of the grantor, grief—can make an already delicate situation even more challenging. While nobody wants to plan for the worst-case scenario, doing so can ensure your wishes are carried out, and your trust remains unchallenged. In addition to being very clear about your trust terms and working with an estate planning attorney to ensure procedural compliance, trusts can also incorporate a no-contest clause that removes a challenging beneficiary’s right to the trust if they challenge the trust and fail.

Reasons to Challenge a Trust

A trust can generally be contested in the same way that a will can. These include a wide range of reasons that can vary based on your own personal circumstances. For example, someone challenging a trust may claim that the person who formed the trust lacked the capacity to do so or did so under duress or undue influence. There are also certain procedural requirements a person must meet when establishing a trust, and a challenger can attack on those grounds if any steps are missed, or any T’s are uncrossed or I’s undotted. Specific terms of the trust can also be challenged if ambiguous or unclear or somehow against reasonable public policy. Alternatively, beneficiaries can sue the trustee directly if the trustee acts outside of the bounds or spirit of the trust.

How Recent Federal Tax Law Changes Affect Estate Planning in Texas

Published on: January 22, 2023 | By Thomas W. McCulloch

As control of the federal government changes, sometimes every two years, the tax laws often change as well. Recently, new tax laws have gone into effect, which may significantly affect many Texans’ management of their assets and estate. A recently released legal trade publication discusses some of the recent tax changes and how they may affect your estate planning.

The most significant changes to tax law that involves estate planning involve adjustment of the estate tax and the gift tax. As of 2023, the combined exemption amount from the gift and estate taxes has increased by nearly $ 1 million. With the new tax numbers, single persons are now entitled to give or pass on to their heirs up to $12,920,000 without incurring any estate or gift tax burden. A married couple can exempt $25,840,000 in this same manner.

This change may affect how some Texans construct and manage their estate because trusts, non-liquid holdings, and other financial measures may not be necessary to reduce the tax burden of your heirs upon your death. The exemption is the highest it has ever been and is set to reduce in 2026. With proper advice and counsel, Texans with significant assets may be able to arrange a “lifetime gift” to an heir, locking in the favorable tax exemption while it is part of the law.

How to Stay Vigilant Against Elder Fraud

Published on: January 21, 2023 | By Thomas W. McCulloch

The wide range of the internet and the increased interconnectivity of our society has led to an increase in financial frauds against the elderly. Older people lose $3 billion each year to financial scams, and more than 3.5 million individuals are impacted. People over the age of 60 are more vulnerable than other populations to scams, and individuals over 80 suffer even higher losses.

These scams can occur in a variety of ways. Sometimes, the elderly person is taken advantage of by a trusted friend or family member. In other situations, financial professionals and medical care providers abuse their position to commit these frauds. In other scenarios, complete strangers come into contact with elderly individuals through the internet or other means to perpetuate scams. While there is no limit to the ways your loved ones may be defrauded, the U.S. Department of Justice has identified several common scams to be on the lookout for.

Common Elder Fraud Scams

Many common scans involve fraudsters pretending to be representatives from federal agencies. For example, in a Social Security Administration imposter scam, victims are contacted via telephone and are convinced their social security numbers have been suspended because of suspicious or criminal activity. Victims will then confirm their social security numbers and even give imposters access to bank accounts, thinking it’s necessary for keeping their finances safe. Imposters use robocalls, caller ID spoofing, and U.S.-based money mules to convince victims of their legitimacy. Callers also use similar techniques to pretend to be the IRS, claiming victims owe substantial sums of money to the agency that they must pay quickly through wire transfers or gift cards. Victims who refuse are threatened with arrest or other official action.