Houston Estate Planning and Elder Law Attorney Blog

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.

The Ever-Changing Field of Houston Estate Planning

Published on: August 3, 2021 | By McCulloch & Miller, PLLC

Estate planning has evolved greatly over the past century, and it continues to change with each passing year. For example, estate planning attorneys must regularly adapt client plans to changes in tax laws. Keeping up with changes to the legal field and their implications for estate planning is a task best left to the professionals.

A Texas case decided in June 2021 aptly illustrates the evolving field of estate planning. In the case, a company and individual both claimed a right to the deed to a 21.5-acre plot of land. In the end, the company prevailed because the court applied a law that is now no longer in effect.

At issue in the case was whether an attempted transfer of the land in 1995 was valid. The 1995 transfer did not involve either the individual or company involved in this case, but its ripple effects dramatically altered their rights down the line.

How Recent Concerns Surrounding Conservatorships Can Play into a Texas Estate Plan

Published on: July 29, 2021 | By McCulloch & Miller, PLLC

Once best known for her chart-topping hits, Britney Spears is now in the limelight for a much more somber reason.

For over a decade, Ms. Spears has been under a conservatorship following a decline in her mental health. That conservatorship has recently gained attention and notoriety as Ms. Spears and those around her allege that the arrangement has been abusive. The story of her conservatorship raises an alarming question: If a conservatorship could happen to a woman as powerful as Britney Spears, could it happen to you, too?

Fortunately, there are well-established ways to avoid a court-ordered conservatorship or guardianship in the event of incapacitation. Specifically, trusts and estates lawyers can help build a legal shield in the form of a revocable living trust.

Why You Need a Professionally Written Will in Texas

Published on: July 27, 2021 | By McCulloch & Miller, PLLC

“I leave everything I own to my grandson.”

The above statement seems to leave no room for confusion. Whomever wrote it seemingly wished to leave his belongings to his grandchild, and no one else. But one court thought differently earlier this year. The case underscores the importance of having a will professionally drafted to ensure your final wishes will be respected.

Holographic Wills Can Have Large Consequences

How Cohabitation Complicates Texas Estate Planning

Published on: July 22, 2021 | By McCulloch & Miller, PLLC

More and more Texas couples are choosing to cohabitate without getting married. For older couples, this arrangement is often intended to protect assets for their children. Couples should be aware that cohabitation can affect estate planning in unexpected ways, however. With the right trusts and estate planning lawyer, cohabitating couples can navigate these pitfalls with ease.

The Major Difference in Inheritance

A key difference between a cohabitating and married couple in terms of estate planning is the effect of one partner’s death on inheritance. In the case of a married couple, a surviving spouse automatically maintains an interest in her deceased spouse’s estate, even if the decedent did not leave a will. In the case of an unmarried, cohabitating couple, however, a surviving partner lacks any default legal interest in their deceased partner’s estate. In other words, the surviving partner will not inherit any part of the estate unless a will is in place designating the survivor as a beneficiary.