Houston Estate Planning and Elder Law Attorney Blog

Robin Williams Will Limits Use of Likeness

Published on: November 13, 2015 | By McCulloch & Miller, PLLC

Certain celebrities continue to earn phenomenal amounts of money, even though they are deceased. Using advanced technology, audiences enjoy what appear to be live performances and new material from actors and singers who have been gone for decades. Holograms are good enough to convince stadiums filled with fans that they are seeing the real deal.

For the estates that hold the rights to the likenesses of celebrities this can earn millions of dollars a year. Such is the case with the likenesses of Michael Jackson, James Dean, Betty Page and many others.

Not every celebrity, however, is comfortable with the idea of their name and likeness being used after they pass away to make money.

Escheatment: Monitor Unclaimed Property Lists

Published on: November 12, 2015 | By McCulloch & Miller, PLLC

A state government has the legal right to claim the property of a person who has passed away and has no heirs or beneficiaries. Here's the problem: almost all state governments today are experiencing significant shortfalls in revenues. As a result, some states have become a little too eager and too aggressive about claiming property through escheatment.

What often happens is that an account holder has not stayed in contact with a brokerage or financial institute for a long time. The financial institute then reports the assets in an account as unclaimed property. Rather than making any effort to locate the person who owns the account, the government claims the property as its own. This can create issues for people who have long term investments as part of their retirement and estate plans.

Recently, Investopedia listed how you can avoid this happening to your stock accounts in "4 Ways to Avoid Escheatment of a Stock Account."

Heirs of Author J.D. Salinger Rest Easy

Published on: November 11, 2015 | By McCulloch & Miller, PLLC

A lawsuit was filed against the Salinger Literary Trust by the Devault Graves Agency, a publishing house, in March 2015. The publishing company said that the trust was interfering with its ability to license its edition of a book titled J.D. Salinger: Three Early Stories that it wanted to publish in foreign countries. The lawsuit was filed in Tennessee because the Devault-Graves Agency is based in Memphis, Tennessee. The court dismissed the lawsuit saying it had no jurisdiction to hear the case, and granted the publisher's request to transfer the case to New Hampshire, the author's home state.

Publisher's Weekly reported on this development in "Court Punts Salinger Copyright Case to New Hampshire."

The details of this lawsuit are complex. The stories in the book are part of the public domain in the United States, which means they do not have copyright protection and anyone can publish them.

Titling Assets with Estate Planning in Mind

Published on: November 10, 2015 | By McCulloch & Miller, PLLC

Most married people tend to use the traditional way of owning property together, using "joint tenants with right of survivorship," known in estate planning circles as "JTWROS." Just as the name describes, when one of the spouses passes away, the surviving spouse becomes the sole owner of the property.

This has benefits for estate planning, as the property does not have to go through probate. However, there are potential drawbacks. If one of the owners is in debt, his or her creditors may be able to go after the property held jointly. If a parent holds property as a joint tenant with a child, it might make it so other children do not receive a fair inheritance.

Recently, Investor's Business Daily discussed alternatives to joint tenancy in "Best Ways To Title Your Assets — Avoid Traps," including:

Estate and Gift Tax Exemptions Set to Increase in 2016

Published on: November 9, 2015 | By McCulloch & Miller, PLLC

By law, every year the IRS must determine exemption limits for federal estate tax and the lifetime gift tax based on inflation. And every year, estate planning attorneys wait to hear the IRS' announcement of what the exemptions will be for the coming year.

For 2015, the exemptions were set at $5.43 million for a single person and $10.86 million for a married couple. The exemptions for 2016 have been raised to $5.45 million for a single person and $10.9 million for a married couple.

It is important to note that the gift tax exemption is the total amount of gifts that may be made during a person's lifetime. The amount that may be given to any individual in a single year in 2016 will remain the same as it is in 2015 at $14,000.

The Importance of Keeping Wills and Trusts Updated

Published on: November 6, 2015 | By McCulloch & Miller, PLLC

There was a time when irrevocable bypass trusts were highly favored by estate planning attorneys as one of the best estate planning methods for married couples. It worked like this: one spouse would fund the trust with an amount that was just under the estate tax exemption. At the time that the funding spouse passed away, funds in the trust were available for the heirs, and the balance of the estate was inherited by the surviving spouse.

Consequently, this approach lowered the size of the surviving spouse's eventual estate and lessened the estate tax burden for the married couple. However, as Kiplinger's Retirement Report points out in "Old Trusts Create Tax Issues for Heirs," estate tax laws have changed significantly since the time when many of these trusts were created.

The estate tax exemption is far higher than it used to be, and spousal portability now allows a married couple to double its estate tax exemption.

California Decision Highlights Planning Mishaps

Published on: November 5, 2015 | By McCulloch & Miller, PLLC

This is a great example of a failure to think outside of the box. Literally. A California man created a handwritten will that left all of his property to his wife if he were to predecease her. He also wrote that if they should both die at the same time, he wanted his property to be distributed to a number of charities that were important to them both.

What Duke did not contemplate in his will is the possibility that his spouse would pass away before he did, which is exactly what happened.

As Duke had never redrafted his will after his wife passed away, the trial and appellate courts declared that his property should go to his relatives under the laws of intestacy. However, the California Supreme Court ruled that an unambiguous will can be reformed by the court if it can be established by clear and convincing evidence that a mistake was made in expressing the testator's intent at the time the will was drafted.

Often Overlooked: How Will Heirs Pay the Estate Tax?

Published on: November 4, 2015 | By McCulloch & Miller, PLLC

We’ve heard or read the stories of wealthy families forced to sell off prized heirlooms so that hefty estate taxes could be paid. It is never a happy day when an heir needs to sell the family home, wine collection, fine art or collection of vintage automobiles to raise cash for the estate tax. Proper estate planning for wealthy families should include a rather simple solution to this problem: life insurance.

This was recently explained in the Wills, Trusts & Estates Prof Blog in "How Life Insurance Can Be Used To Help With Estate Taxes."

You may consider the creation of an irrevocable trust and make it the beneficiary of a life insurance policy.

Large Estate? Consider Gifting to Family

Published on: November 3, 2015 | By McCulloch & Miller, PLLC

Most people prefer to maintain possession all of their assets, letting them go to the next generation only after they have passed away. But if a family member feels that they have more than enough money and property and others in the family are in need or would benefit from having access to the assets, then the older person can make gifts during their lifetime. This can be very rewarding to the benefactors.

When it comes to giving methods, there are many ways to skin the cat. This was the subject of a recent article in the Columbus Dispatch, "Guide to Life: Pros and cons of leaving inheritances to relatives." Nevertheless, some of those giving methods are more tax savvy than others.

The article mentions three such ways:

Leaving Houston? Consider State Estate Taxes

Published on: November 2, 2015 | By McCulloch & Miller, PLLC

What if your estate is worth less than $5 million, even when counting life insurance policies, the value of your home and your assets? We bet you that you think that means you don't need to pay estate taxes, and consequently that you don't need an estate plan.

That is a mistake, because there are many other reasons to have an estate plan besides the estate tax. It is also a mistake because many states have estate taxes of their own that require careful planning to navigate. With proper planning, these state estate taxes can almost always be avoided.

A recent Forbes article took on this topic in "Three Surefire Moves To Beat State Death Taxes," which recommend the follow tactics: