Houston Estate Planning and Elder Law Attorney Blog

Picking an Executor, a Critical Part of Your Estate Plan

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

Choosing an executor is not easy, but it is very important. A person who is not capable of managing the tasks can drive even the best estate plan off the path.

Part of creating an estate plan is naming an executor who will be responsible for carrying out the wishes of the decedent, according to a recent item on InsuranceNewsNetMagazine.com, “The Wrong Executor Can Destroy Even the Best Estate Planning.” These tasks include everything from making sure that assets are distributed to tidying up outstanding debts and cleaning out houses. It’s important to select a person who can manage these tasks and—if they are stymied—who will recognize when they need help from professionals.

Executors sometimes are under the impression that it’s a quick and easy job. This might be the fault of the testator or the person who has executed the will. They select an executor and believe that he or she possesses the ability, acumen, time, and desire to carry out the duties of the position. Many don’t inquire as to whether the executor is interested in and capable of serving, or the chosen executor may be hesitant to say no.

Why Your Power of Attorney Document is Not a Slam Dunk

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

If a financial institution does not accept a properly prepared power of attorney, you will have to know your rights and be prepared to assert yourself.

A power of attorney is an estate planning basic; however, more often than you would expect, people find themselves being told by financial institutions that they will not accept the power of attorney. It’s such a problem that a number of states have enacted laws to protect the power of attorney.

This form gives a designated person the authority to act on another’s behalf when making financial decisions. It is commonly employed by adult children whose aging parents can no longer act on their own. However, financial institutions frequently make it difficult to exercise that power. The Wall Street Journal article, “When the Power of Attorney Lacks Power,” lists some steps to avoid potential problems.

Over 21? You Need an Estate Plan

Published on: June 27, 2016 | By McCulloch & Miller, PLLC

If you are old enough to drive, work a job and have a bank account, you need to have an estate plan. It’s part of being a responsible adult.

Leaving adolescence behind means a life that includes responsibility for yourself and for those you love. That has traditionally included basics like a paycheck, a bank account and life insurance. But today, we also include an estate plan, which The Huffington Post says in “Why Estate Planning Makes Sense at Any Age” is just as important when you are 20 as it is when you are 64.

It should be noted that an estate plan is essential no matter what your financial situation or age.

Executor 101: What You’ll Need to Know as an Executor

Published on: June 24, 2016 | By McCulloch & Miller, PLLC

A lot of details go into being an executor, and some people find it a thankless task. But knowing that you helped someone you love carry out his or her last wishes holds its own reward.

Most people are honored when they learn that they have been named executor of a loved one's estate. But according to an article in US News, "4 Tips to Be a Better Executor," they don't really understand what duties and responsibilities are involved.

An executor must deal with the estate of a deceased person—including identifying and valuing the assets, paying debts, and disbursing the assets according to the decedent's will. He or she also needs to ensure that the assets are protected during this period.

Special Needs Trusts Provide Parents with Peace of Mind

Published on: June 22, 2016 | By McCulloch & Miller, PLLC

Houston Families who are faced with the often overwhelming financial, logistical and emotional challenges that come when a family member has special needs use these trusts to protect their child's quality of life.

A young couple who wisely had an estate plan created while their children were very young returned to estate planning when one of their children developed a chronic and debilitating illness at age 3. Their lives changed dramatically, and their estate plan did also.

CNBC's article, "Special-needs trust is key part of some estate plans," says that many couples in this situation will revise their estate plan and create a special needs trust to benefit a disabled child. Special needs trusts, also called supplemental needs trusts, can be a very important estate planning tool for parents of children who are likely to need special care and financial support throughout their lives.

Need to Track Down a Missing Pension?

Published on: June 20, 2016 | By McCulloch & Miller, PLLC

The defined-benefit pension is a rare bird today. But if you are lucky enough to have one, don't assume that your distribution will go smoothly. Here's how to protect yourself.

For millennials, the idea of a pension plan that pays benefits from the time you retire to the day you die is an unheard of concept. Fewer and fewer American companies offer this benefit, so if you are among those who have a defined-benefit pension, congratulations. But don't assume that the check is in the mail. A recent investigation by the Department of Labor into some of these large plans shows that more than $500 million is owed to retirees.

Kiplinger's article, "Missing Pensions Costly to Retirees," reports that since last summer the Labor Department has investigated more than four dozen large pension plans and has found staggering results: some of them are not doing a very good job of monitoring retired participants and paying benefits when they're owed. Some plans don't even have the names or ages of many of their participants.

When Life Throws You a Curve Ball, Be Prepared to Respond

Published on: June 17, 2016 | By McCulloch & Miller, PLLC

We never know what's around the corner. Big changes come in all different types. Best strategy: be prepared and deal with whatever comes.

Of those Americans who actually have a will and an estate plan in place, there's still a tendency to let years go by before they update their wills and finances. Any good Houston estate attorney will tell you that a will needs to be updated every three or four years to take advantages of any changes in the law and to address any life changes that occur.

The Middletown Transcript warns in "Game-changing life transitions that need attention" that sudden transitions need to be addressed immediately. However, many times these events will have more complex consequences impacting other parts of your life. Don't stick your head in the sand when such an issue comes up. Deal with it in the context of your overall life.

Selecting an Executor Who is Not a Family Member or Friend

Published on: June 15, 2016 | By McCulloch & Miller, PLLC

If you don't believe any friends or family members can serve as your executor, what are your options?

A question is raised by a well-to-do husband who is concerned that his wife is not prepared to handle a significant estate if he should predecease her. The couple has no children, and he is concerned about what will happen. In MarketWatch's "My wife and I don't trust anyone to be executor of our will," several different ways to prepare for this situation are examined.

One important note to consider: while mulling over the executor issue, do not table your estate planning. With both spouses still living, the planning should start right away.

How to Make Your Houston Family Business the Exception That Survives

Published on: June 13, 2016 | By McCulloch & Miller, PLLC

Whether on the evening news or a serial drama, we love to watch the inner workings of family businesses—in large part because of the drama and the high likelihood of failure.

The narrative of family dynasties is intriguing. According to the Yakima Herald in "Passing the baton: 6 challenges for family business succession," that is because successfully transitioning from one generation to the next is extraordinarily challenging and statistically unlikely. The low levels of success are matched by high expectations of business owners who believe that somehow, someway, their family will continue to control the businesses. Their viewpoint is highly optimistic and—most often—wrong.

Whether it's a national chain of supermarkets or a mom and pop corner grocery, owners will face several obstacles when seeking to ensure that their business legacy continues with and through their children. Here are some common challenges to consider.

Here’s One Way to Avoid the 401(k) Penalty

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

The double nickel year has potential for allowing you to tap your 401(k) without an early withdrawal penalty, but you have to know exactly how it works to avoid problems.

There's one exception to the rule that you must be at least 59 ½ to tap your 401(k) without incurring a 10% early-withdrawal penalty, but you have to tread carefully. If it is the year you turn 55 or older and you leave your job, there's no penalty. You will still owe tax on the withdrawal—a $10,000 payout at a 25% tax rate will still cost you $2,500. There's no free lunch, even here. But, the good news is you don't get hit with a $1,000 early withdrawal penalty.

It doesn't matter how you separate from service. In fact, retiring, being laid-off or even termination will spare you the penalty. Provided you're 55 by the end of the year you leave the job, the rule applies, says the Kiplinger's article, "When You Can Tap a 401(k) Early With No Penalty."