Houston Estate Planning and Elder Law Attorney Blog

When Does an Estate Plan Need to Be Reviewed?

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

People think of estate plans as one-off documents, but they should think of them more like cars. Estate plans need maintenance, oil changes, tune-ups and if there’s an accident, repairs.

As life progresses, you’ll go through a number of stages, from being a teen to an adult, getting married, retiring, welcoming grandchildren and more. Every time you move through a stage, your estate plan should too.

Bankrate’s recent article, “Estate planning triggers: When to re-evaluate your estate planning strategy,” says the risk of not having a current estate plan and will that state your wishes is significant. When people fail to put any plan into place, it leads to confusion, chaos, and unintended consequences. Use this list of important life events as triggers to remind you to discuss your current situation with a trusted attorney.

How Will I Know When I Can Afford to Retire?

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

The period before retirement is a time when people dream about what the future might hold. They also worry, because who hasn’t heard the stories about retirees who return to work because they retired too early?

It’s no surprise then that little more than half of Americans surveyed by the Transamerica Center for Retirement Studies say their biggest concern about retirement is outliving their money. The nature of retirement, when we start taking money out of those retirement accounts, after a lifetime of putting money into the accounts, seems a little scary.

Here are the key indicators that you’re probably ready to retire, according to this recent article from Investopedia’s, “6 Signs That You Are OK to Retire.”

Financial Elder Abuse in the Spotlight in Virginia

Published on: March 8, 2019 | By McCulloch & Miller, PLLC

Virginia is taking steps to protect seniors and other vulnerable individuals against financial exploitation, by giving financial institutions more resources to prevent this growing crime.

With bipartisan support, the state House and Senate of Virginia have passed versions of State Bill 1490, which encourages financial institutions to have more leeway in making decisions to protect the elderly, when it suspects exploitation is occurring. However, for now, the State and the Senate have yet to reconcile the two bills to make it into the state’s laws.

“This bill addresses the issue of financial exploitation of older Virginians, which has been on the rise in recent years,” said the sponsor, Senator Mark Obenshain, R-Rockingham.

Second Marriage Pre-Nuptial Agreements

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

Early adult life is simple. You may or may not have children, a car, a lease on an apartment. However, by the time you reach your 50s and 60s, you likely have some decent assets, like retirement accounts, investments, real estate and maybe even a few collectible cars. You’ll want a prenup, before you walk down the aisle again.

A prenup the first time you get married may seem overly protective, unless there’s a big economic difference between the couple. However, after a lifetime of work, building a business or a retirement portfolio, you want to be sure that a second marriage doesn’t create a financial calamity if it fails. A prenuptial agreement lets you go about enjoying your second marriage, says this recent article, “All About Prenups For Second Marriages,” from Forbes.

Here are some of the issue to consider in second (or third) marriages:

What’s “Hot” In Estate Planning? The ING Trust

Published on: March 4, 2019 | By McCulloch & Miller, PLLC

The ING trust is used to generate tax savings in a number of ways. For the right person, they are a trend worth looking into. Are they right for you?

The expanded transfer tax exemptions created by the 2017 tax reform legislation will end in 2026. However, in the meantime, the increased exemptions have led many high-net worth individuals and couples to review their existing estate plans. The ING trust has now become a valuable tool and could easily become the biggest trend in 2019 estate planning.

Think Advisor’s recent article, “ING Trusts: The Hot Trend in HNW Estate Planning,” explains that because of the changes from the tax reform, ING trusts have taken on new significance. ING trusts can generate significant savings, both in income taxes and in overall transfer (gift, GST and estate) taxes. This means that it can be a good idea to look into an ING trust.

How Life Insurance Works Best in an Estate Plan

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

Life insurance can help heirs avoid having to incur expenses like estate taxes, funeral costs and similar expenses. However, it also gives heirs breathing room, so they can make the best use of other assets.

Here is an example of how life insurance should work. A father, Howie, dies and leaves a large estate to daughter Eva. The estate is large enough that it triggers a huge estate tax. However, the bulk of his assets are tied up in an IRA and real estate properties, some of which could be put on the market quickly, but not quickly enough for tax deadlines.

With that scenario, Eva might not want to immediately force a sale of the real estate. However, if she accesses the inherited IRA to raise money, she’ll have to pay income tax on the withdrawal and lose a terrific opportunity for extended tax deferral.

Why A Will is Not a Do-It-Yourself Project

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

Writing your own will is a lot like trying to do your own dental work. You can brush, floss and even use a water flosser, but the rest is best left to the trained professional.

It’s a fairly common question: “Why can’t I download a form and create my own will?” However, estate plans, and that includes wills, are important legal documents and getting things wrong can have long-lasting consequences.

The Frisky‘s recent article, “Why You Should Hire A Lawyer to Write Your Estate Plan,” says that writing your own estate plan can be a complicated thing—and one that a non-attorney may find very difficult.

Why You May Need a Gun Trust if You Own Guns

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

Gun owners, you may own guns to protect your family or because you admire the workmanship or history of firearms. However, without a gun trust, your heirs may face a surprising consequence.

Mistakes with inherited IRA accounts can become expensive, but the penalty is financial. Inherit a gun collection without the necessary permits, and you could unwittingly commit a felony. Gun collectors need to prepare their heirs, if they intend to pass on their firearms, and they may also need a gun trust.

Kiplinger’s recent article, “Own a Gun? Careful: You Might Need a Gun Trust,” explains that a gun trust is the common name for a revocable or irrevocable management trust that’s created to take title to firearms.

Here’s How to Donate to Loved Ones and Avoid a Tax Bite

Published on: February 8, 2019 | By McCulloch & Miller, PLLC

While there’s a time limit on this great opportunity for tax-free giving—2025, unless Congress makes some changes—this is a good time to take advantage of minimizing your tax liability through generosity. There’s a new big break for top-dollar wealth transfers, thanks to the new tax law.

Basic rule: the more you give away, the smaller your estate and, therefore, the smaller your tax liability. If you’ve got a lot of wealth, this is a good time for you and those you want to make gifts to. The sooner you exploit this, the more you can give. It means that there’s less of a chance your estate will have to write a check to the IRS.

The Street’s recent article, “This Is the Golden Age of Tax-Free Gift Giving,” says the federal government has taxed estates since 1924, and as recently as 2001, the threshold when taxes kicked in was $675,000. This exemption level from taxation has been increased ever since. However, a large increase came from the Tax Cuts and Jobs Act, which took effect in 2018. The Act doubled the exemption level and indexed it to inflation. Anything above the new limits is taxed at 40%. It is $11.4 million for singles and $22.8 million for married couples in 2019.

New Rules on Benefits Appeals for Veterans

Published on: February 4, 2019 | By McCulloch & Miller, PLLC

Following the adoption of new rules, there will now be options for veterans to appeal their disability benefits. The hope is that these three new processes will speed cases.

It took more than a year and a half, but the Department of Veterans Affairs has announced that new appeals rules have been enacted that will streamline the appeals process. Veterans whose disability benefits have been rejected, will now have one of three options to pursue their claims. Reforms were passed by lawmakers in 2017, so this has been a long time coming.

In the past, disability appeals languished for years. The VA is now hoping that the most difficult reviews can still be finished in less than a year in most cases, reports the Military Times in the article “VA’s benefits appeals process will see a dramatic changeover next month.” The target for cases that don’t go before the Board of Veterans Appeals is an average of about four months for a final decision.