Houston Estate Planning and Elder Law Attorney Blog

Don’t be a Phool About Money!

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

Expect to see the word "phool" a lot in 2016 if a book by Nobel Economics Prize winners George Akerlof and Robert Shiller, "Phising for Phools," becomes a runaway hit this year. The two coined the phrase to describe a person who gets caught in a "phishing" scam, which covers a wide variety of financial scams. Save yourself by being smart enough to know what you don't know so you can focus on making money and building up your retirement nest egg.

The recent Forbes article, "One Powerful Money-Making Move for 2016," explains that most of us believe we know what's good for us, but when it comes to money we shoot ourselves in the foot—and wallet!

The root of phoolish behavior, Akerlof and Shiller say, is the self-conceit that you think you know more than all of the smart people who are trying to take your money every day. Can you compete with computers and sophisticated programs that take advantage of pricing glitches and make trades in milliseconds, as well as robots who move at the speed of light?

Boomer Parents: Are You Risking Retirement for Millennials

Published on: January 12, 2016 | By McCulloch & Miller, PLLC

According to a recent study, "The Bank of Mom and Dad: a Source of Comfort for Everyone," an increasing number of parents in the U.S. are worried about their adult children's financial status and would be willing to sacrifice their own fiscal health. The study, issued by the BMO Wealth Institute and described in CNN Money's "Half of U.S. Parents Would Retire Later to Support Adult Children Financially," makes it clear that parental worry needs to be balanced with concerns about the parents' own finances.

An experienced estate planning attorney can assist parents with this concern to reach their own financial goals, including retirement—and to add in financial support to their children into a comprehensive plan.
Parents should remember that today's young adults face unique financial challenges and may require different levels of support than they themselves received. If parents and children talk about the amount of support they expect to provide or receive, they can avoid misunderstandings that could jeopardize their financial futures. The report offers parents the following financial planning tips:

• Start Early. You should try to teach your children about money at an early age. Understanding the basics of personal finance at a young age can help set up a child for future financial success and independence.

Advance Planning Important for Families Facing Incapacity

Published on: January 11, 2016 | By McCulloch & Miller, PLLC

Those holiday gatherings were important for Houston families. And, family gatherings can be a valuable time for family discussions and decision making. This is particularly true for families facing the issues of legal incapacity, according to The Huffington Post. The article, "Legal Issues for Concerned Family and Friends of a Possibly Incapacitated Individual," advises that functional capacity is contextual. The challenges an individual faces in daily living and how well they are being addressed is sometimes hard to pin down. The legal terminology is frequently vague and inconsistent. Terms such as "incompetent," "unsound mind," and "incapacity" are used interchangeably.

State statutes typically define an "incapacitated person" as someone who, because of a physical or mental condition, is substantially unable to provide food, clothing, or shelter for himself or herself, to care for the individual's own physical health or to manage the individual's own financial affairs.

The courts will often require expert testimony and reports as to the individual's physical or mental state before rendering a judgment. Many states use a required standardized "Certificate of Medical Examination" form to be submitted to a court, which has the specific statutory definition of incapacity. It will often have boxes for the physician to check and a space for his or her comments.

It’s Shredding Season in Houston!

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

Keeping your financial house in order is not that complicated, according to the national newspaper USA Today in "Drowning in bank statements, etc.? Here's what you can toss." There are three overarching tasks: pay bills on time, file taxes and save more. Getting organized is the best way to start, and what better way to start the New Year than a clean sweep of paperwork?

Most of the documents you receive from banks, credit card companies and utility companies do not need to be kept, unless you anticipate having a problem.

For instance, bank accounts and bill balances can go. There's no real reason to keep those. These update you on balances at a moment in time but don't mean much in the future. Most of these don't need to be kept for more than a year or two, and typically electronic records will work just as well. However, tax-related financial documents are a different story. In the event of an audit, you'll need all the forms from that tax year to prove your return was accurate. The IRS says you should keep all your tax documents for at least three years. This includes your W-2s with your income for the tax year and your Form 1098 mortgage interest statement. If you have a claim for a loss from worthless securities or bad debt deduction, the IRS recommends you keep tax documents for up to seven years. After seven years, the only reason to hang onto tax documents is if you haven't filed a return at all or if you filed a fraudulent return, according to IRS record-keeping guidelines.

Houston Families Can Start Fresh During New Year

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

January is an excellent time to review and update your estate plan – even if all you do is make a list of the things you mean to do in 2016. A recent article in The Business Investor's Daily, "5 Changes to Make to Your Financial Plan Now," provides a framework to get things rolling.

Make gifts to family. Plan to give gifts of cash or tangible property of up to $14,000 per person because there's no limit on how many gifts you can make, and there is no gift or estate tax. Couples can combine their gift giving to $28,000 per person. This is an easy way to reduce a potentially taxable estate. Establish a long-term strategy and give annual gifts to your beneficiaries.

Give to charity. You can also make a donation to a charity, and if you tend to make significant charitable donations, consider establishing a family foundation. To avoid capital gains tax, you should consider donating appreciated assets like stocks. A donor-advised fund is another way to receive a charitable deduction today, avoid capital gains tax and retain the authority to determine its future use.

Houston’s Sandwich Generation Needs Helping Hands

Published on: January 5, 2016 | By McCulloch & Miller, PLLC

Keeping all the balls in the air can be a tough juggling act, according to "The Sandwich Generation Juggling Act," from the website Next Avenue. Jugglers know that adding that fourth airborne ball to their juggling routine can be a challenge for most.

Today, we have a societal juggling act going on within the Sandwich Generation of caregivers—the group defined as the 24 million Americans who are juggling children, careers, and caring for an older parent. While many individuals can handle three balls (me, children, career), once the caregiving ball is added, the ball that gets dropped is "me," or the caregiver themselves.

Caregivers should take each ball of responsibility they're juggling and focus on ways to keep that ball moving in a fluid motion. Juggling really only requires getting one ball into the air at a time, so let's look at each one.

Houston Heirs Will Thank You for Proper Estate Planning

Published on: January 4, 2016 | By McCulloch & Miller, PLLC

Financial planners who help families build and manage assets are often asked what documents are needed in an estate plan. The following documents create a foundation of an estate plan: an up-to-date will, a durable power of attorney for health care (sometimes called a health care proxy), and an advance health care directive (also known as a living will).

Property transfer clarity. We hear about the disastrous fallouts when celebrities die without wills or other crucial documents in place. Elvis Presley is a famous example, but there are countless others, including James Gandolfini, Whitney Houston and Phillip Seymour Hoffman in the past few years. Who needs that kind of drama?

If you have a valid will, the transfer of assets is much less confusing and difficult. A will tells your executor or personal representative how your assets should be distributed. A will can also state the order in which your heirs should receive these assets—in case funds run out before all of the bequests are fulfilled.

Everyone Needs to Make Time for Estate Planning

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

The only way to make sure that your wishes are carried out after your death is to have the proper estate planning documents prepared in advance, according to a post from WMUR.com, "Money Matters: Common estate planning mistakes." Some people make the mistake of thinking that estate planning will be extremely complicated, while others think it will be far simpler than it ever could be. While every situation is different, there are a number of mistakes that are common at every income and asset level.

Failing to plan. Many of us don't have a will—but like it or not you do have an estate plan. The plan is called the law of your state and the probate judge. If you die without a will, your estate will be divided according to intestacy laws. In that case, there's no guarantee this will be what you wanted. A one-page will or a more complex plan with other strategies like a trust can help reduce estate taxes, save on administrative costs, and put you in the driver's seat when deciding how your assets are to be distributed to your heirs, charities, or to help a family member with special needs. Another important point: in many states a will is the only way that you can name a guardian for your minor children. So, if you move from one state to another, be sure to check local laws.

Failing to maximize your marital estate exemption. The new portability law provisions ease some of the estate tax planning burden by allowing each individual a $5.43 million federal estate tax exemption in 2015. If one spouse dies without using up his or her $5.43 million, the unused portion may be transferred to the other spouse for use at the survivor's death (hence the term "portable."). You should also remember to investigate any state estate taxes when reviewing your strategy and make certain to discuss how portability is elected with your attorney.

Scheduled Court Appearances Vital to Legal Cases

Published on: December 31, 2015 | By McCulloch & Miller, PLLC

An entire $3 million estate of a Texas doctor was awarded to his ex-wife in a recent court ruling. Mrs. Denise Reichert took the oath of independent executrix of the will and estate of Dr. Oscar Reichert.

The judge who presided over the hearing dismissed the contest of will filed by Brandi Reichert, who is the doctor's oldest daughter from his first marriage.

However, Brandi failed to show up in court.

It’s Simple Math: Save for Retirement

Published on: December 30, 2015 | By McCulloch & Miller, PLLC

It’s simple math. A plan to save more and spend less is a good plan for retirement.

But a recent Forbes article, "The Most Potent 401(k) Booster," says that if you have the self-discipline and the ability to plan, you can shrink your debts and add to your emergency, college, or retirement funds.

Saving is essential. A recent Wells Fargo survey says that 71% of those over 40 who are consistent savers believe they will have enough for retirement. The more you save, the more confident you will become in your ability to live the life you want.