Houston Estate Planning and Elder Law Attorney Blog

What Constitutes Non-Probate Property in Texas?

Published on: October 3, 2020 | By McCulloch & Miller, PLLC

Probate is the process in which the court validates a will and distributes the deceased’s property according to the terms of their will. While probate is the default process in many situations, there are ways to avoid this lengthy and potentially costly process. In fact, one of the primary purposes of a Houston estate plan is to avoid probate.

Assets that are mentioned in a will are typically passed on to those named in the will. However, certain classes of assets are referred to as non-probate property. Non-probate property consists of those assets that will automatically pass on to the beneficiary at the time of the owner’s death. There are several types of non-probate property.

Jointly Held Property

A Few Tips for Those Starting the Houston Estate Planning Process

Published on: September 29, 2020 | By McCulloch & Miller, PLLC

A Few Tips for Those Starting the Houston Estate Planning Process

Few people look forward to creating an estate plan. However, the importance of creating a Houston estate plan cannot be overstated. By taking action now, individuals can ensure that they have the means to provide for themselves while protecting everything that they have worked so hard to obtain throughout their life.

For many, the concept of estate planning can be overwhelming. Below is a checklist of important steps for those who are thinking about how to start the estate planning process.

Take Inventory:

What is a Houston Trustee and What Do They Do?

Published on: September 24, 2020 | By McCulloch & Miller, PLLC

In estate planning, the term “trustee” is often tossed around, but many people do not know what a trustee actually does. In short, a trustee is a person that administers the property or assets for a third party, often for a trust fund or retirement plans and pensions. While the specific duties of a trustee depend on the trust document and what assets are held in the trust, the following describes the duties of trustees and addresses a few of the more common questions people have about a trustee’s responsibilities.

What are a Trustee’s Duties?

First off, the trustee has the responsibility to safeguard the trust assets and act in furtherance of the trust’s goals. Trusts will often have a trust agreement, which specifies how a trustee utilizes the assets in the trust and specific details regarding its management. As such, the trustee must keep accurate records, file tax returns, and report any activity to the beneficiaries, those who are to receive the assets, as required by the trust. Trustees are the decision-makers for any issues that arise regarding the trust and must make the decision based on the trust agreement and with the interests of the beneficiaries in mind.

What Is the Role of an Executor of a Texas Estate?

Published on: September 22, 2020 | By McCulloch & Miller, PLLC

When someone is crafting their will or creating a Houston estate plan, there are many critical decisions they must make. One of the most vital choices is who to serve as the estate’s executor. An executor of an estate is a person appointed to administer the estate of a deceased person, also called a testator. An executor has many tasks they must fulfill, both during the life of the testator, and after they have passed. Although there are many duties an executor must fulfill, it can often be a rewarding position.

What Are an Executor’s Duties?

An executor is responsible for ensuring the deceased’s assets are accounted for, as well as transferring the assets to the people listed in the will. Assets can include cash, stocks, bonds, real estate, or even personal collectibles. Before disbursing the inheritances to the estate’s heirs, the executor must also estimate the value of the estate and pay of all of the debts of the deceased, if they had any. An executor, before the death of the testator, should make sure the testator is keeping a list of assets and debts, properties, and any other relevant information. Overall, the primary duty of an executor is to carry out the wishes of the deceased based on the instructions in their will and estate plan.

What is the SECURE Act and How Does It Affect Houston Estate Planning?

Published on: September 17, 2020 | By McCulloch & Miller, PLLC

Creating a Houston estate plan and preparing for retirement can often be an extremely stressful process, especially with the passage of new laws and regulations that impact a person’s plans. One such law that affected many people’s retirement savings was the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The SECURE Act came into effect on January 1, 2020, and created new requirements for defined contribution plans, such as 401(k)s and individual retirement accounts (IRAs). Below are some of the retirement and estate planning aspects most impacted by the passage of the SECURE Act.

Individual Retirement Accounts

Prior to the SECURE Act, an individual had to start withdrawing funds from their IRA, called required minimum distributions (RMDs), after they turned 70 ½ years old. Now, individuals are not required to withdraw from their IRA until they reach 72 years old. As there are income tax payments associated with RMDs, the SECURE Act can help reduce a person’s overall taxation rate. The SECURE Act also removed the age limit for IRA contributions; now, people can contribute to their IRA at any age, as long as they are still working. Before the passage of the SECURE Act, where removing funds from an IRA before turning 60 years old would make the withdrawal subject to income tax, people can now draw up to $5,000 from an IRA penalty-free after the birth or adoption of a child.

How Business Owners Can Use Insurance As a Houston Estate Planning Tool

Published on: September 15, 2020 | By McCulloch & Miller, PLLC

From creating a will to establishing a revocable trust, there are many tools and options available to individuals creating a Houston estate plan. However, many people are unaware of the role insurance can play in an estate plan, especially for small business owners. Many estate planning attorneys will advise their clients to obtain life insurance, if they do not have it already, when planning ahead for their future. Besides merely obtaining insurance, there are vital steps business owners should follow when creating an estate plan.

Why Purchasing Life Insurance is Vital

Nothing can replace the loss of a loved one; however, having insurance can help soften the financial blow if tragedy strikes. If the loved one was an owner of a business and the family is looking for someone else to purchase the company, an insurance policy can allow the family to take the time to transition the company during a new period of leadership. Without life insurance during this time, the family would be a majority owner in a business they do not want to run and, often, requires a more experienced person to lead.

What is Planned Giving in a Houston Estate Plan?

Published on: September 8, 2020 | By McCulloch & Miller, PLLC

For many, philanthropy and charitable giving is an important part of their life. For these philanthropic individuals, it is common to leave assets at the time of their death in order to continue the legacy. However, at the same time, it is still important to minimize their tax burden both during their life and for their family after their passing. Utilizing a planned gift is a great option. A Houston planned giving strategy allows individuals to make larger gifts to charitable organizations than they would be able to from their ordinary income.

By definition, a planned gift is any major donation to a non-profit made during a person’s lifetime or at their death as a part of the person’s estate planning. These gifts include life insurance, real estate, personal property, and cash.

Types of Charitable and Planned Giving

Helping Pay for College Through a Texas Qualified Tuition Plan

Published on: September 4, 2020 | By McCulloch & Miller, PLLC

With colleges starting the fall semester around the country, worries about paying for higher education and making ends meet often come to students’ minds. Family members, like parents and grandparents, will often want to help their loved one pay for college if they are able to; however, at the same time, they do not want to do so at a detriment to their own financial future. One popular method to help a student with their college costs is a qualified tuition plan. A qualified tuition plan is a type of Houston estate planning tool that allows a person to contribute to another’s higher education expenses without having to pay taxes on these contributions.

What is a Qualified Tuition Plan?

A qualified tuition plan lets a loved one, called a contributor, to either prepay their student’s qualified expenses at an educational institution or to contribute to a designated account to pay these costs. A contributor can put their funds toward tuition as well as fees, books, supplies, and equipment required to participate in the educational program. However, contributions to a qualified tuition plan cannot exceed the amount necessary to provide for the beneficiary’s expenses.

What Happens if You Die Without a Will in Texas?

Published on: August 26, 2020 | By McCulloch & Miller, PLLC

Although creating a will in Texas may not seem vital in the moment, passing away without having a will in place can have major consequences. Intestate succession laws dictate where a person’s assets and property go if they die without a will. There are many rules surrounding intestate succession. While these are only a few, below are commonly asked questions about what happens when a person passes away without a will or estate plan in place.

What Assets Are Impacted by Intestate Succession?

When a person dies without a will, their assets will go to their closest relatives. However, not all assets are affected by intestate succession laws. These non-affected assets include life insurance proceeds, funds in a retirement account, and property jointly owned. For these assets, they will pass onto the surviving co-owner, or named beneficiary, even when there is no will in place.

Resource and Income Limits for Houston Medicaid Applicants

Published on: August 25, 2020 | By McCulloch & Miller, PLLC

As we have discussed in other posts, planning for the eventual need for long-term care is a crucial element of any Houston estate plan. With the costs of nursing home care rapidly increasing across the country, more families are taking a proactive approach when it comes to deciding how to pay for these future costs.

For families with significant assets, the concern is not necessarily whether they can pay for the necessary care, but how they can limit the amount their own assets will go towards paying for the care. Thus, Medicaid planning is focused on how to strategically structure familial assets in a way that will enable the family member in need of long-term care to quickly and easily qualify for Medicaid while preserving their assets.

Medicaid is a needs-based program, and applicants must meet strict asset and income limits to qualify for benefits. One of the most important elements of Houston Medicaid planning is understanding these asset and income limitations. Applicants with excess assets or income will be required to “spend down” the excess before they can qualify for benefits. Of course, this can leave a spouse who is not in need of care in a challenging spot, because the money they need to continue to live independently may be diverted to pay for long-term care.