Houston Estate Planning and Elder Law Attorney Blog

How the Blended Family Benefits from an Estate Plan

Published on: September 23, 2019 | By McCulloch & Miller, PLLC

With about half of all marriages ending in divorce, second marriages and blended families have become the new normal in many communities. Estate planning for a blended family requires three-dimensional thinking for all concerned.

An article from The University Herald, “The Challenges and Complexities of Estate Planning for Blended Families, ” clarifies some of the major issues that blended families face. When creating or updating an estate plan, the parents need to set emotions aside and focus on their overall goals.

Estate plans should be reviewed and updated, whenever there’s a major life event, like a divorce, marriage or the birth or adoption of a child. If you don’t do this, it can lead to disastrous consequences after your death, like giving all your assets to an ex-spouse.

Talking About Financial Planning with Aging Parents

Published on: September 19, 2019 | By McCulloch & Miller, PLLC

Unless you are raised in a family that talks about money, values and planning, starting a conversation with elderly parents about the same topics can be a little awkward. However, it is necessary.

In a perfect world, we’d all have our estate plans created when we started working, updated when we married, updated again when our kids were born and had them revised a few times between the day we retired and when we died. In reality, a recent report by Merrill Lynch and Age Wave says that only half of Americans have a will by age 50.

More than 50% said their lack of proper planning could leave a problem for their families.

Can I Do Anything About 401(k) Taxes?

Published on: September 17, 2019 | By McCulloch & Miller, PLLC

After years of enjoying the deductions for putting money into retirement accounts, it’s always an unpleasant stunner when people realize they have to pay taxes on their withdrawals. Or do they?

Converting a 401(k) to a Roth IRA or Roth 401(k) will eliminate the need to pay taxes on withdrawals, says Investopedia’s recent article, “How to Minimize Taxes on 401(k) Withdrawals.” However, you have to follow the rules for a qualified distribution. Make no mistake: you’ll also have to pay taxes on any funds that are converted.

The primary issue with converting your traditional 401(k) to a Roth IRA or Roth 401(k) is the income tax on the money you withdraw. If you’re near pulling out the money anyway, it may not be worth the cost of converting it. The more money you convert, the more taxes you’ll owe.

Did Groucho Marx Have Estate Planning and Elder Care Problems?

Published on: September 13, 2019 | By McCulloch & Miller, PLLC

“By the time Groucho was an old man, however, he experienced significant problems in his daily activities, medical decision-making and the management of his estate. He suffered from elements of dementia, a heart attack and congestive heart failure, falls resulting in a broken hip, and after that hip was repaired, another fall and broken hip, urinary tract infections, strokes and hypertension.”

Julius Henry Marx, better known as Groucho, died 42 years ago on Aug. 19, 1977, at age 86. Groucho teamed with three of his four brothers—Harpo, Chico, and Zeppo—to become stars of vaudeville, Broadway, film, radio and television. (A fifth brother, Gummo, wasn’t part of the act).

PBS News Hours’ recent article, “How Groucho Marx fell prey to elder abuse” reports that the legal battles over Groucho’s money and possessions went on long after he died. The unrest of his last few years is familiar to adult children concerned with the well-being of their elderly parents.

How Does the Social Security Disability Benefit Process Work?

Published on: September 11, 2019 | By McCulloch & Miller, PLLC

Social Security disability benefits are based on average lifetime earnings. How severe the disability is, or what the household income is, has nothing to do with the amount of money that will be paid.

If you have your annual Social Security statement, you can see what you’ll probably get in the Estimated Benefits section. However, this is an estimate and not a final number. The total amount a disabled worker and his or her family can receive is roughly 150% to 180% of the disabled worker's benefit. Eligible family members can include a spouse, divorced spouse, children, a disabled child and/or an adult child disabled prior to age 22.

The estimated Social Security disability benefit amount for a disabled worker receiving Social Security Disability Insurance (SSDI) in January 2019 is $1,234 per month. However, a beneficiary can receive either less than this or up to $2,861, according the article “What are the maximum Social Security disability benefits?” from Investopedia.

How Gray Divorces Impact Senior Lives

Published on: September 9, 2019 | By McCulloch & Miller, PLLC

It used to be unheard of, a divorce after fifty, sixty or even seventy years old. However, gray divorce is now becoming more common. There are pitfalls to be aware of, before taking this big step.

According to the National Center for Health Statistics and the U.S. Census Bureau, younger Americans are divorcing at much lower rates, while divorces for adults over 50 have just about doubled since the 1990s. Back in the 90s, for every 1,000 persons age 50 and older, only five divorced. In 2015, for every 1,000 married persons age 50 and older, 10 are divorced.

The issues of a gray divorce are very different than those of a younger couple, not to mention the financial and legal complexities of marriages that span decades.

Does This Letter Ruling Impact Your Charitable Lead Annuity Trust?

Published on: September 5, 2019 | By McCulloch & Miller, PLLC

Estate planning attorneys and CPAs all keep an eye on letter rulings to see if IRS decisions have any bearing on their own client’s situations. In this case, a taxpayer is setting up a revocable trust and wants to use a Charitable Lead Annuity Trust known as a CLAT.

A recently posted letter ruling from the IRS addresses the use of a CLAT used in estate planning.

A CLAT letter ruling could be of interest to those who are using life insurance, annuities or other instruments in estate planning.

What Happens to Credit Card Debt When Someone Dies in Texas?

Published on: September 3, 2019 | By McCulloch & Miller, PLLC

Here’s a legacy that you may not want to leave for your family to pay: your credit card debt. It doesn’t go away when you die.

Three out of four consumers die in debt, says Yahoo Finance’s recent article, “What Happens to Credit Card Debt When You Die?” That means the executor has to pay the debt, and the money comes from what might have been an inheritance. If you have many debts, the inheritance may become very small—or vanish altogether.

If you’re worried about your family being stuck with your debts after you die, know your rights and work with an estate planning attorney to help protect your assets.

Why Couples Should Go Through the Estate Planning Process Together

Published on: August 15, 2019 | By McCulloch & Miller, PLLC

“Until death do us part” sounds very different when you are in your twenties and getting married for the first time. As a couple travels through a life together, the time comes to create or revise an estate plan.

Granted, the estate planning process isn’t as much fun as planning a wedding but preparing for property distribution and planning for incapacity is a way to protect your spouse from having to deal with most preventable issues during a crisis. It can also prevent any number of unpleasant surprises.

Despite this, 17% of adults don’t think they need a will, believing that estate planning is only for the very wealthy. No matter how few assets it seems someone owns, completing a few documents can make a huge difference in the future.

How Does “Community Property” Work in Texas?

Published on: August 14, 2019 | By McCulloch & Miller, PLLC

One of the reasons for a pre-nuptial agreement, is to clarify who owns what in the marriage, and what happens to property if the marriage should dissolve. In a community property state, everything is “ours.”

If you live in a community property state, like Texas, and you are married, both spouses own and have an equal right to assets, which are considered marital property. The issue is explored in nj.com’s recent article, “Does this house really become community property after marriage?”

Let’s imagine you own a home before your second marriage and created a will leaving the condo to a child. However, you sold the home and purchased another house in your name using funds from the sale and your own funds.