Houston Estate Planning and Elder Law Attorney Blog

Handling Harvey: Your Powers of Attorney

Published on: August 31, 2017 | By McCulloch & Miller, PLLC

Many people have heard of Powers of Attorney, and now, during this time of unprecedented disaster and flood, these two documents are more important than ever. There are two Powers of Attorney – the Durable (Financial) Power of Attorney and the Medical Power of Attorney.

The Durable Power Attorney allows you to name someone as your “agent” who can act for you on any financial or other asset-related action that you have authorized. For example, you may have an elder parent who may have been evacuated from an assisted living facility and cannot access their bank accounts, or, you yourself may have been evacuated and the last thing on your mind is how to pay certain bills. With a Durable Power of Attorney in place, the person you name as your agent can act for you and alleviate that pressure, so that you can focus on you and your family’s recovery.

A Medical Power of Attorney works in a similar manner. A Medical Power of Attorney allows you to name someone as your “agent” to make medical decisions for you. For example, say you were injured while evacuating or in a car wreck and could not make medical decisions for yourself. By nominating an agent, that person could make decisions regarding your treatment. Conversely, if you have an elder parent, they could name you as their agent and you could make decisions regarding their treatment. Having a Medical Power of Attorney may relieve your caregivers and loved ones from some of the hoops they would have to jump through to otherwise ensure that you would receive proper care.

Handling Harvey: IRS Tax Relief

Published on: August 31, 2017 | By McCulloch & Miller, PLLC

Taxpayers who have a valid extension until October 15, 2017 to file income tax returns and who live in the covered Texas disaster area may be helped by the IRS extending the filing periods.

IRS announced certain relief from deadlines relating to filing and certain tax deposits for Hurricane Harvey victims. The IRS action covers filings that were due or matters that occurred on or after August 23, 2017(1). Returns for tax payers who have valid filing extensions in the affected Texas Counties have filing deadlines extended again until January 31, 2018. The extensions for eligible taxpayers also includes the quarterly estimated income tax payments originally due on Sept. 15, 2017 and Jan. 16, 2018, and the quarterly payroll and excise tax returns normally due on Oct. 31, 2017. In addition, penalties on payroll and excise tax deposits due on or after Aug. 23, 2017, and before Sept. 7, 2017, will be abated as long as the deposits were made by Sept. 7, 2017.

Generally, the persons eligible for this relief include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. The returns eligible include individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), that have either an original or extended due date occurring on or after Aug. 23, 2017, and before Jan. 31, 2018. Affected taxpayers that have an estimated income tax payment originally due on or after Aug. 23, 2017, and before Jan. 31, 2018, will not be subject to penalties for failure to pay estimated tax installments as long as such payments are paid on or before Jan. 31, 2018.

How Does a Living Trust Work?

Published on: August 11, 2017 | By McCulloch & Miller, PLLC

Living trusts can achieve different goals, depending upon how they are drafted. Knowing the fundamentals will help you decide how to go forward.

It’s important to know that not all living trusts are the same. However, common reasons for using a living trust are for privacy and avoiding probate. Placing assets in a living trust also provides protection to beneficiaries from divorce, nursing home costs, legal actions and creditors. Should a living trust be part of your estate plan?

The Green Bay Press-Gazette’s recent article, “Common questions about a living trust,” notes that this can be especially important for a beneficiary who may have special needs. A Special Needs Trust can be created so their government program benefits, like Medicaid, won’t be impacted by their inheritance. Let’s look at some specific situations:

More Changes Coming to Medicare in 2018

Published on: August 10, 2017 | By McCulloch & Miller, PLLC

Higher fees are coming to high earners, when income thresholds for the highest surcharge tiers drop even further next year.

If you were hit with premium surcharges for Medicare Part B and Part D already, these costs will increase again in 2018, according to a recent article in Kiplinger, “Medicare Surcharge Thresholds to Drop.”

This recalibration of the trigger points was a part of the Medicare Access and CHIP Reauthorization Act of 2015, also called the "Doc Fix" law, which ended the annual battles over fee schedules for doctors' Medicare payments. To help pay for the permanent fix, lawmakers have asked high-income beneficiaries to foot the bill.

How Long Does It Take to Get a Payment from a Life Insurance Policy?

Published on: August 9, 2017 | By McCulloch & Miller, PLLC

Most life insurance companies are quite efficient. However, you will need the right documents.

One of the basic tasks that follow the loss of a spouse or family member is figuring out what life insurance policies were in place and contacting the insurance company or companies to find out how to file for claims. How long it takes to receive the death benefit varies, but for the most part, insurance companies move quickly.

As a follow-up, what happens if the beneficiary doesn't know about the life insurance policy?

Estate Planning 101: Check Your Beneficiary Designations

Published on: August 7, 2017 | By McCulloch & Miller, PLLC

Unless you really want to give your ex the proceeds of your life insurance or 401(k), it is best to take the time to do this one task.

If you haven’t looked at the paperwork for your life insurance policies, bank accounts, retirement accounts, investment accounts and any other asset that names a beneficiary, right now would be a good time to take a look—especially if you haven’t done so in years. The number of horror stories of assets going to untended people would surprise you. It’s such an easy fix that is all too often forgotten.

MarketWatch’s recent article, “Make this estate planning move right now: Check your beneficiary designations,” explains how the Fifth Circuit Court of Appeals reversed the trial court by finding that a pension plan administrator didn’t abuse her discretion in determining that a deceased plan participant’s stepsons weren’t considered his “children” under the terms of the plan. As a result, the deceased participant’s siblings, not his stepsons, were entitled to inherit the plan benefits in Herring v. Campbell (5th Circuit 2012).

How are 401(k)s and IRAs Different?

Published on: August 4, 2017 | By McCulloch & Miller, PLLC

New regulations from the Department of Labor may come into play for Americans deciding which type of account is best for their retirement savings.

There are significant differences between 401(k)s and IRAs, and as reported in a recent post on wjbf.com, “Advantages and disadvantages to a 401k and an IRA,” a number of new regulations from the Department of Labor makes this a good time to review the pros and cons of these popular retirement savings plans.

401(k): A 401(k) can potentially be less expensive than other investment vehicles, due to the number of participants. Many also have a loan provision for access to your principal, if you need it in an emergency. If you retire early, qualified plans may have an age 55 withdrawal privilege that gets you around the 10% withdrawal excise tax provision. However, if you’re still working, you may be able to push back your required minimum distribution (RMD), if you’re over age 70 and still participating in the plan. You’ll also have creditor protection in the typical qualified plans. Those are some of the general positives.

Seniors continue to be Vulnerable to Lottery Scams

Published on: August 2, 2017 | By McCulloch & Miller, PLLC

The sad truth is, foreign lottery scams are still around because they are successful for the scammers. Millions of Americans are targeted every year.

The first reaction from someone receiving a letter about a large award is often a wave of relief, especially if they are facing financial problems.

For an elderly couple who love their home and are having troubles with their finances, the arrival of a letter saying they’d on $4.5 million in a Spanish lottery seemed like an answer to their prayers. The story, reported by woodtv.com, “88-year-old nearly scammed by fake lottery, warns others,” starts out like so many similar scenarios. Luckily for this couple, a trusted estate planning law firm helped them steer clear.

Fake Law Firm Website Scamming Seniors in Houston

Published on: July 31, 2017 | By McCulloch & Miller, PLLC

Here’s another reason to meet with your estate planning attorney face-to-face. An overseas-based scam is targeting the elderly with a website that uses photos and content stolen from real law firm websites.

A website purporting to be an estate planning law firm is the subject of a lawsuit from the Houston Bar Association, which is trying to get the site shut down. According to the Houston Chronicle, the fake firm, which calls itself Walsh & Padilla, is targeting elderly people and offering estate planning services.

In reality, the ABA Journal notes, in its article, “Fake law firm website uses real lawyers' pictures to fleece consumers, bar lawsuit says,” the scheme’s website appears to be operated from South Africa and uses photos of lawyers taken from real law firm websites. The scammers mail letters to elderly people telling them they’ll be getting life insurance proceeds, after they provide their bank account numbers and other financial details. One senior was scammed out of $14,000, the lawsuit says.

Avoid Penalties by Signing Up for Medicare Part B at the Right Time

Published on: July 21, 2017 | By McCulloch & Miller, PLLC

You must sign up for Medicare Part B no later than eight months after retirement, or the penalties could be serious.

These are the details that really matter when it comes to retirement and Medicare. If you signed up for Medicare Part A on your 65^th birthday but were still working, you probably didn’t enroll in Part B. Now you’ve just turned 68 and plan on retiring this year. When do you need to enroll in Medicare Part B, and what do you need to know to ensure that you’re covered?

Kiplinger’s recent article, “What to Know About Enrolling in Medicare Part B,” says that many people who are still working do this. They sign up for Medicare Part A at 65 (because it’s free) and wait to sign up for Part B, while they’re covered by their employer’s insurance. However, you are required to sign up for Medicare Part B no later than eight months after you leave your employment and lose that coverage. Failure to do so, can result in a lifetime penalty and a gap in coverage.