Houston Estate Planning and Elder Law Attorney Blog

What Singles Need to Know About the Tax Cuts and Jobs Act

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

Single with a net worth less than $11.4 million in 2019? You’re in luck—you can die knowing that all of your money will pass free of any federal estate tax to your heirs.

It was good news for the wealthy—the Tax Cuts and Jobs Act (TCJA) amped up the unified federal estate and gift tax exemption to $11.4 million for 2019 (and up to $11.18 million in 2018). If that wasn’t generous enough, those exemptions will be increased annually for inflation from 2020 to 2025. As comedian Mel Brooks would say, “It’s good to be the king.”

MarketWatch’s recent article, “How single folks should handle estate-tax planning under the new tax law,” explains that taxable estates above the exemption will have the excess taxed at a flat 40% rate. An individual’s cumulative lifetime taxable gifts in excess of the exemption are taxed at the 40% rate. Likewise, taxable gifts are those that are more than the annual federal gift tax exclusion of $15,000 for 2018 and 2019.

A Love Story: George and Barbara Bush

Published on: January 2, 2019 | By McCulloch & Miller, PLLC

Their lives were devoted to family and public service, and to each other. The passing of George H.W. Bush and his wife gave many Americans pause to consider their leadership and their devotion.

Few were surprised when George H.W. Bush passed less than eight months after Barbara’s death. Their deep connection—from his service in World War II to the Presidency and their role in public service after leaving the White House—was evident to everyone around them, says Forbes in the article, “Valuable Estate Lessons From The Passing Of George And Barbara Bush.”

The death of a longtime married couple in quick succession, is often called “broken-heart syndrome” or “widowhood effect.” The thought is that the lives of two people are so entwined they can’t bear to be without each other. The time between the Bushes’ deaths also raises practical questions in estate planning. Timing is critical in an estate plan, and if the deaths of married spouses happen within a short period of time, it can make the administration of an estate more difficult.

When Disaster Strikes, Will Your Estate Be Ready?

Published on: December 31, 2018 | By McCulloch & Miller, PLLC

The swiftness of fires and flood in the news in recent months, even in places that have never experienced dramatic disasters, puts a spotlight on the need for preparedness. That includes your estate plan.

The evening news presents enough reminders about the need to plan for disasters. However, many people feel like it can’t happen to them, or they don’t know what to do. Forbes’s recent article, “How To Make Your Estate Plan Doomsday Ready,” looks at a couple in their 80s, who recently had their house in North Carolina destroyed by Hurricane Florence, and the picture of what has occurred should be a life lesson for all.

This couple depended on their adult children, who were all in other states, to help—but there were many obstacles. They didn’t have access to a computer and couldn’t remember account information or their passwords or even how to access their email. They asked their daughter to go online and pretend to be them, to begin accessing information. OK, that may not be legal, but desperate times can call for desperate measures.

The In-Between Stages of Competency

Published on: December 28, 2018 | By McCulloch & Miller, PLLC

If you live far from your hometown, you may be used to seeing large changes in aging parents from year to year. However, if you are involved in their day to day life, you may not notice the changes, or they may seem to come and go.

When you are close to your parents, it’s hard to judge their competency accurately. Your dad, who was the perfect driver, suddenly isn’t quite as good behind the wheel as he used to be. Or your mother, who never left the house without being perfectly groomed, seems to have become a little casual about her appearance. They aren’t big changes, but the change is rarely sudden.

Other examples can be if your father forget to pay a bill…. or forgot that you called him yesterday. You recognize all this and ask if he is okay. He doesn’t think there’s a problem.

What Will Happen to Paul Allen’s Vast Fortune?

Published on: December 27, 2018 | By McCulloch & Miller, PLLC

The co-founder of Microsoft serves as an excellent example of advance planning, maintaining privacy and creating a legacy.

Through a trust established years ago and several companies, Paul Allen began building his legacy of philanthropy long before his death. His last will and testament was a simple six-page document, according to an article from The Seattle Times, “Paul Allen’s will sheds little light on what will happen to estate.”

The will was filed with King County on October 24—the same day his sister Jody announced she was named the executor and trustee of his estate.

How Do Trust Funds Work?

Published on: December 26, 2018 | By McCulloch & Miller, PLLC

Trusts serve a variety of functions in estate planning, and they aren’t just for wealthy people.

Trusts can be simple, or they can be complex, depending on what type of trust is being considered and how they are structured. Trusts should be set up by an estate planning attorney, who is familiar with asset ownership and how trusts impact inheritances and taxes.

U.S. News & World Report’s recent article, “Setting Up a Trust Fund,” explains that a trust fund refers to a fund made up of assets, like stocks, cash, real estate, mutual bonds, collectibles, or even a business, that are distributed after a death. The person setting up a trust fund is called the grantor, and the person, people or organization(s) receiving the assets are known as the beneficiaries. The person the grantor names to ensure that his or her wishes are carried out is the trustee.

Tis the Season to Be Generous—Thanks to the IRS

Published on: December 22, 2018 | By McCulloch & Miller, PLLC

An end-of-year decision from the IRS about the new tax law and gifting has given people with generous spirits and hefty bank accounts reasons to be cheerful about gifting.

Increases to basic estate and gift tax exemptions were welcome by many, when the new tax law details were unveiled. However, questions were raised: how long will those exemptions be in place? What happens when they expire?

The changes increased the exemption to $10 million per person from $5 million. When you account for inflation adjustments, that exemption is currently at $11,180,000 for 2018, increasing to $11,400,000 for 2019.

What is a Medical Directive, and Does It Expire?

Published on: December 21, 2018 | By McCulloch & Miller, PLLC

Don’t have a medical directive, or don’t remember the last time you reviewed it? That means it’s time. We never know when an emergency or sudden onset illness will strike.

The biggest problem with medical directives, is getting people to confront the concept of being incapacitated or near death. Once you get past the emotional response, then a clear head and rational thinking make taking care of these important documents easier. However, they have to be updated, just like your will.

Your medical directive sets out what kind of care you want, when you are near death. A health care power of attorney names a person who will be empowered to make medical decisions on your behalf, if you cannot. These are tough concepts to wrap your head around, but very necessary. Without them, family members and doctors won’t know what you want. However, is what you wanted at age 30, the same as what you want at age 80? Maybe not.

Is Your Estate Plan Working for You?

Published on: December 20, 2018 | By McCulloch & Miller, PLLC

Remember that estate planning is not just for the wealthy, and now that the federal exemption is so high, not just for the billionaires either. Estate planning is also much more than a will.

Your estate plan has a lot of work to do for you, both while you are alive and for your family when you have passed. A good article that explains it all comes from Investopedia, “How to Get Your Estate Plan on Track.” There are three key objectives that your estate plan needs to do:

End-of-life health care decisions are documented in a legally binding document;

Countdown to Retirement with Three Simple Questions

Published on: November 7, 2018 | By McCulloch & Miller, PLLC

To help plan for retirement, it helps to move from asking global questions, like “Can I afford to retire?” to more specific questions, like “What’s my monthly cost of living right now?”

Sometimes retirement planning is so overwhelming that people just shrug their shoulders and hope that things work out. That’s a terrible way to plan for the last two or even three decades of your life. Plus, says Motley Fool in a recent article titled “Don't Even Think About Retiring Until You Can Answer These 3 Questions,” if you can’t answer three basic questions, maybe you’re not ready to start thinking about retirement.

Can you believe that just 38% of Americans say they have a long-term financial plan, according to a recent survey? Let’s look at three important planning questions.