Houston Estate Planning and Elder Law Attorney Blog

How to Prevent Texas Estate Disputes

Published on: September 7, 2021 | By McCulloch & Miller, PLLC

The time after the loss of a loved one is emotional and stressful. Families are grieving the loss while also dealing with funeral arrangements and estate plans. While careful trust and estate planning can mitigate many common disputes that occur, there are still some pitfalls that cause families to fight over the deceased’s will. Below are some situations that sometimes lead to conflict with estate plans—along with ways to resolve the situations themselves.

Disagreements Among Siblings

While estate plans often provide clear and concise instructions for loved ones, this is not always the case. Parents with multiple children will sometimes include provisions in their will requiring the siblings to make decisions together—rather than detailing the wishes themselves. Although in some respects this may seem like a good idea—having children come together after the loss of a parent—these provisions often lead to discontent and more arguments. Children will fight about the aspects of the will: either about what assets they would like to receive or disagree what they are each entitled to.

How Can Disability Pre-Planning Help Houston Residents?

Published on: September 2, 2021 | By McCulloch & Miller, PLLC

We want to believe that, should we ever become incapacitated, the people we trust to protect us will behave honorably. A recent California court decision shows that, unfortunately, this is not always the case.

Houston residents young and old should heed the court’s warning in this case, which it described as a “textbook” example of a fiduciary relationship gone wrong. The case concerned an elderly woman and her son. The son was his mother’s durable power of attorney. In this role, he had broad rights to manage his mother’s property once she became incapacitated in her advanced age. The mother had a separate conservator of her person and estate.

In Texas, the role of a conservator (or guardian) of a person’s estate is comprehensive. Such a conservator has authority over their ward’s physical care, including the ability to make decisions about their education, residence, medical treatment, and even their daily activities. They also control their ward’s financial decisions, including both long-term and day-to-day management of money, personal property, and real estate. Clearly, conservatorships and guardianships can be ripe for fraud and abuse.

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.

Estate Planning for Texas Couples Without Children

Published on: August 26, 2021 | By McCulloch & Miller, PLLC

“Do I need a will if I don’t have children?” The answer to this frequently Googled question might surprise you.

Indeed, married couples who do not have any children often think that there is no good reason to have a will in place. They mistakenly assume that a will is not necessary since there is no need to determine how any assets would be divided among children. Instead, these couples rest easy under the mistaken assumption that their property will always go to their spouse in the event of their death.

In reality, Houston couples who do not have children should still have a will in place.

Determining if Estate Taxes Apply to a Texas Property

Published on: August 24, 2021 | By McCulloch & Miller, PLLC

People are often confused about whether an estate tax—also known as an inheritance tax—will apply to their property after their passing. While the federal regulations surrounding the estate tax often change, Houston estate planning attorneys are knowledgeable in calculating the value of the asset, along with the taxes the deceased’s family will have to pay. Having this knowledge ahead of time will prepare the family financially and emotionally for when the person passes. Below are common estate tax questions and the answers to these problems.

What is An Estate Tax?

An estate tax is a tax levied on the estate of a recently deceased person before the money passes onto their heirs. However, estate taxes are only applicable to estates that fall above a certain monetary threshold. Some states have estate taxes too; however, Texas is not one of those states. Therefore, Texans will only have to worry about the federal estate tax on their properties. The federal estate tax applies for estates worth more than $11.7 million. For married couples, the rate is doubled—meaning, a married couple’s estate must be more than $23.4 million to have to pay the estate tax.

How to Make Texas Your Permanent “Domicile” for Estate Planning Purposes

Published on: August 19, 2021 | By McCulloch & Miller, PLLC

Unlike many other states which impose an estate tax at the time of a person’s death, Texas does not have such a tax. Therefore, when people move to Texas from another state many hope to eliminate the state-level inheritance tax from the prior state. To do so, Texans must ensure they are domiciled in Texas. Below are common questions and answers to what a domicile is, along with how to make sure a person is domiciled in Texas.

What Is Domicile?

A domicile is a place where a person has the intent of making their permanent home. A person’s domicile is very similar to their residence; however, while a person can have multiple residences, they can only have one domicile. For example, if a person spends part of the year in Texas and another part in New York, they may have residency in both places—but only one can be their domicile.

How Can Someone Show Where They are Domiciled?

Because a person can only be domiciled in one state, there are actions they can take to show they are domiciled in Texas. For instance, they can file a declaration of domicile form which supports their claim of being domiciled in Texas. Besides filling out this form, the individual must provide two acceptable documents to support their claim of domicile. These documents can include a current deed, mortgage or rental lease agreement in Texas, a utility bill with a Texas address, a Texas high school or college transcript, a pay stub from a Texas company, or a W-2 from an employer—amongst other acceptable documents.

Individuals can take other actions beyond a declaration to support their claim for domicile in Texas. This includes registering to vote in Texas, filing personal tax returns from their Texas address, redrafting wills to state the person is a resident of Texas and obtaining a Texas driver’s license.

Obtaining Social Security Benefits for Ex-Spouses in Texas

Published on: August 18, 2021 | By McCulloch & Miller, PLLC

There is often a lot of confusion about Social Security benefits, particularly obtaining benefits based on a family member’s work history. While it may be complicated, Texans are able to obtain Social Security benefits from their ex-spouses. Every case is different, but there are general requirements a person must meet in order to qualify for their ex-spouse’s Social Security benefits. Below are explanations that can help a Texan begin the Social Security process, along with important qualifications to keep in mind.

What Are Social Security Benefits?

Social Security benefits are given to qualified retirees, along with their spouses, children, and survivors. Social Security benefits are based on a person’s lifetime earnings—therefore, people who earned more over their working years will receive more in benefits after their retirement. This is why spouses—or even ex-spouses—who earned less income may try to qualify for their partner’s benefits instead.

Why Houston Investors Should Not Delay Estate Planning

Published on: August 12, 2021 | By McCulloch & Miller, PLLC

There is no denying that the COVID-19 pandemic has sent shockwaves through the Houston economy and beyond. Indeed, only time will tell the impact of the virus on countless markets. With this in mind, the importance of estate planning early on has never been as clear.

3 Major Advantages for Investors with Estate Plans

As an investor, engaging in the estate planning process early on has several key advantages. First, estate planning early on allows investors to identify the major arch of their financial goals and to act accordingly. Second, estate planning early on affords investors ample opportunities to adjust their strategy to reflect market and legal changes. Finally, estate planning can help young investors cultivate wealth early on.

The Nuts and Bolts of Effective Estate Planning

Published on: August 10, 2021 | By McCulloch & Miller, PLLC

Planning your estate and the management of your assets after you pass away can be an uncomfortable and overwhelming process, however, it does not need to be as complicated as you may expect. Once an effective estate plan is in order, you and your family members can rest easy knowing that your wishes will be honored and that unnecessary conflict, expense, and taxation can be avoided. Taking certain steps now in planning your estate will prevent complications down the road.

Before setting up any trusts or even drafting a will, people interested in making an estate plan can gather most of the needed documents on their own, in order to streamline the process going forward. Important documents include property deeds, insurance contact information, vehicle titles, marriage and birth certificates, and financial account information. These documents should be stored in a safe and easy-to-find place for loved ones to access later.

Most Important Estate Planning Documents

Why Texas Common Law Marriage Matters in Probate Court

Published on: August 5, 2021 | By McCulloch & Miller, PLLC

Probate is the process by which the courts oversee the distribution of people’s assets after their death. For loved ones, probate can be an extremely difficult experience involving countless administrative requirements, and it is often rife with family conflict.

There are many steps that people can take, however, to help their loved ones avoid probate court disputes. Chief among these steps is careful estate planning. But other factors can also impact the probate court experience. For example, whether someone dies with or without a will, their decision to marry—or not to marry—can carry significant consequences in probate court.

In a decision earlier this summer, a Texas court considered a probate dispute in which a woman claimed rights to her recently deceased partner’s assets based on their alleged common-law marriage. The deceased man’s children—whom the couple did not share—claimed that they were not married. Because the man had died without a will, whether the couple had a common-law marriage was critical to how his assets would be distributed.