Houston Estate Planning and Elder Law Attorney Blog

Not If, But When: Make a Plan for Incapacity

Published on: December 1, 2016 | By McCulloch & Miller, PLLC

Incapacity might be harder for some people to imagine than death. They can’t wrap their thoughts around the idea of being alive yet unable to function.

Making decisions for how you want to be cared for while you are still able to choose, is a gift to yourself and your loved ones. If you are not able to convey how much intervention you want, or if you want no care at all, your children and medical professionals will have to make the decision for you. According to Barron’s in “Three End-of-Life Estate Plan Lessons,” not planning for incapacity creates a heartbreaking situation for your heirs and could also undo a great deal of your estate plan.

Let’s look at some important lessons about incapacity planning:

Leave a Legacy of Peace for Your Family with Conversations and Estate Planning

Published on: November 29, 2016 | By McCulloch & Miller, PLLC

When the greed nerve gets tapped, relationships suffer. There are things you can do now that will lessen the likelihood of family battles after you pass.

Every family has its own dynamics, and some siblings that never resolve their differences, no matter how many years go by. When both parents pass away, siblings either make peace with each other (and regret the lost years) or go at it even more intensely. Adding money to the mix can spell disaster and split families permanently.

Motley Fool’s article, “Avoid family fights over inheritance,” says you might be surprised at the amount of money that can cause arguments. It doesn’t have to be a fortune—deep-seated feelings of rivalry and jealously are, in many instances, at the root of the problem. With that in mind, let’s look at four ideas to consider in an attempt to avoid a battle royal over your assets:

For Entrepreneurs, Make a Succession Plan Part of Your Estate Plan

Published on: November 28, 2016 | By McCulloch & Miller, PLLC

Estate planning for entrepreneurs is not complete until it includes a succession plan. Individuals who create successful businesses often find it hard to consider handing over the reins.

Entrepreneurs would not succeed without their ability to focus all of their energies on their business. It is not easy for this type of person to imagine that one day they may want to retire or that the possibility exists that they might become ill, injured or even die. Without an effective estate plan that includes a succession plan, their work, staff and families may be placed in jeopardy.

A recent business.com post, “5 Estate Planning Tips for Entrepreneurs,” lists these important estate planning essentials:

From Inside the Firm: Tom’s Tax Tips for Succession Planning

Published on: November 18, 2016 | By McCulloch & Miller, PLLC

TOM’S 9 TAX TIPS AND FACTS RELATED TO SUCCESSION PLANNING(1)©

1. Estate tax, the cruelest tax. You are taxed once on the income you earn. You save some of what you earn and are successful. If you die with “too much”, you are taxed again on your hard earned savings.

2. Only Federal; Texas does not have an estate or an inheritance tax.

Protect Yourself and Your Money from Financial Errors in Later Years

Published on: November 10, 2016 | By McCulloch & Miller, PLLC

There are some steps you can take now, just in case your financial savvy becomes less sharp as you age.

You may have watched first-hand as a beloved parent’s money management skills went from smart to questionable. Scam artists take advantage of this, stealing homes and emptying bank accounts of trusting seniors. Research shows that as we age, certain skills, including financial savvy, diminish. The problem is, the seniors still think they are able to manage their money, despite all evidence to the contrary.

US News explains in “8 Ways to Safeguard Your Financial Life as You Age,” that folks of just about any age should take action when they’re young to protect themselves from financial errors later in life. We’ll look at a few of these.

Gender Gap isn’t Limited to Income Levels

Published on: November 9, 2016 | By McCulloch & Miller, PLLC

A recent international study reported that it will take 170 years before women around the globe reach pay equality with men. This study determined exactly how much income is lost when women step out of the workforce.

If knowledge is power, then the hope is that Business Wire’s article, “Millennial Women Face Significant Gender Gap in Financial Wellness,” will help women gain a better understanding of the cost of taking time out of their careers. The 2016 Gender Gap in Financial Wellness Study was done to clarify the financial impact of leaving the workforce on women’s ability to save for retirement.

There’s already a significant retirement gap between millennial men and women. Although pay parity for the typical 25-year-old may be assumed, there’s still a 28% gap in the additional retirement savings required to cover estimated retirement expenses due in large part to women’s longer life expectancy.

When “The Talk” isn’t About the Birds and Bees

Published on: November 8, 2016 | By McCulloch & Miller, PLLC

Conversations about money, death and dying wishes become tangled up in strong emotions surrounding these matters. A strategic approach might be helpful.

Every family is different, but almost every family struggles with conversations about wills, estate planning and money. A recent article in The Chicago Tribune, “Have the estate planning talk,” advises a thoughtful approach while letting you know that this is hard for everyone.

This is a tough topic because feelings and money get tied up. Money in many instances can conjure feelings of control (or lack of it), dignity, shame, fear, or a lack of confidence. Many conversations go south quickly. For example: if an adult son asks his mother if she and his father have recently updated their wills, he might be met with a response such as, "Why? Are you hoping we’ll die soon, so you can use your inheritance to finally pay off that huge mortgage we warned you not to take?"

When Naming a Guardian for Minor Children, Don’t Stop at One

Published on: November 7, 2016 | By McCulloch & Miller, PLLC

Many people put off doing their wills because of the difficulty of deciding on a guardian for their minor children. But if choosing one is difficult, choosing two might actually make the process easier.

This is the situation no one wants to even think about: both parents dying unexpectedly and young children being raised by someone else. But it does happen. That’s why having a will and naming a guardian is so important for anyone who has children. Usually the problem is deciding between someone who is really good with your kids but who might not be so good or experienced with handling money and investments. But there is another way, as explained by NJ 101.5 in “Choosing guardians for your minor children.”

Yes, you can appoint one person as a guardian of the person—he or she will care for your child—and designate another person as a guardian of the estate—this person will care for your child’s assets. Typically when minors are part of estate planning, the parents’ assets are put into trust until the minor reaches a specified age(s) when distributions are authorized or required to be made. As an illustration, the trust can dictate that a third of the balance be distributed when the beneficiary reaches age 25, a third when he or she reaches age 30, and the remainder when the beneficiary reaches age 35. At that point, the trust will be terminated.

Will You Need a Will in Texas if the Estate Tax is Eliminated?

Published on: October 28, 2016 | By McCulloch & Miller, PLLC

Regardless of which candidate becomes president and what changes are made in coming years, there will still be a need for estate planning in Texas, and that includes regular folks as well as the ultra-wealthy.

If the U.S. federal estate tax were to be eliminated, there will still be plenty for single family offices and estate planning attorneys to do, according to a Forbes article, “If the U.S. Federal Estate Tax Goes Away, What Will Single-Family Offices Likely Do?” Wills are still going to be needed to provide direction as to how assets are to be distributed, and all estate plans will likely need to be reviewed and revised in light of changes to the law. For the single family office, there will still be much to do.

Life insurance purchased to pay estate taxes will also need to be reviewed. One way to do this is to convert permanent policies with meaningful cash values into private placement life insurance policies (PPLI).

Don’t Bury Your Tax Returns, Use Them for Informed Financial Decisions

Published on: October 26, 2016 | By McCulloch & Miller, PLLC

Most Houstonians like to stash away our tax forms as soon as we file our taxes, but that’s a mistake.

When it comes to making financial decisions, you want to arm yourself with as much information as possible. One often overlooked source is your Form 1040, advises CNBC in “Use your tax return for more than paying taxes.” Sharing this document with your Houston estate planning attorney will allow them to get a clearer picture of your situation as well.

Lines 1-5 (Filing status). If you need to check a different box for your filing status, you should review your estate plan. If you get married or divorced, you'll need to update your will and the beneficiaries for life insurance and retirement plans.