Asset Protection

Can You Get Out of Dodge?

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

One attorney calls it the "Get out of Dodge plan"—the best way to keep your assets intact before applying for Medicaid to cover nursing home costs. New Jersey is one of the most restrictive states when it comes to permitting residents to preserve assets for their benefit while Medicaid pays for nursing home care. In the Garden State, there are steps that should be taken before applying for Medicaid, the government insurance program for people of all ages who are too poor to afford health care including long-stay nursing home care. Nursing homes can cost $120,000 a year in New Jersey, sometimes more.

Even though Medicaid is a federal program that's regulated by each state, the way in which the money is distributed can vary. Restrictive states are siding with protecting public money over letting individuals and their spouses keep assets, the Asbury Park Press article titled "Protecting assets: Three things to know before Medicaid" explains. So your retirement strategy can be quite different based upon your state of residence. Not everyone can Get Out of Dodge, meaning not everyone can move into a second home in Florida.

But do-it-yourself planning may not be the way to go. Elder law and Medicaid planning is constantly changing, and your assets can easily be wiped out by nursing home costs without careful planning. For example, when a husband places his wife in a nursing home, their home may be excluded from assets that must be spent for nursing home care before Medicaid pays for it. So the husband is still able to live there. However, if the husband dies before the wife enters the nursing home, it gets complicated: the house could be lost to the nursing home for the cost of her care.

Health Care Costs: Integral Part of Retirement Planning

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

Consulting financial and tax advisers as part of planning the retirement process is essential to get the health-care piece covered. Enjoying truly golden retirement years means a lot of different things to different people, but it should include planning for long-term health care now so we obtain the end-of-life care we desire without becoming a burden on our children or the state.

According to a recent article in cincinnati.com, titled “Consider health care when retirement planning,” long-term health care may be a considerable expense during our retirement years, with most of this spent during the last three years of life.

Health care spending has outpaced inflation over the past decade—from a 6percent increase to just 2.5 percent for core inflation.

Houston Families Have Tax Advantaged College Savings Options

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

There are three basic tax advantaged vehicles to help save for college: 529 plans, Coverdall Education Savings Accounts and Roth IRAs.

Saving for college? Consider three tax advantaged tools to help fund your child’s or grandchild’s education: 529 plans, Coverdall Education Savings Accounts and Roth IRAs.

A recent Forbes article, titled “How to Save for College,”reports that each of these plans allows the funds to be used for college tuition and fees, and some also permit the funds to go towards books and room and board expenses. In addition, the Coverdall accounts allow you to use the funds to pay for K-12 schooling. 529 plans have the fewest restrictions and so the broadest appeal.

Is It Possible to Take the IRS to Tax Court?

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

Actually, the answer is yes. The Tax Court is an actual federal court and not, as some people think, affiliated with the IRS. At Tax Court, the IRS is a party to the matter just like the taxpayer.

If you’ve got beef with the IRS, maybe you should head to court. Didn’t think that was possible, did you?

Contrary to popular belief, the Tax Court is a real federal court and not a tribunal run by the IRS. The IRS is a party in the case just like any taxpayer in the Tax Court, says a recent Forbes article titled “Taxpayer Advocate Reports On Top 10 Most Litigated Tax Issues.”

Houston Families Should Monitor New Tax Proposals

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

What should you have expected to hear during the State of the Union address in January? Key proposals from the President include the following.

President Obama addressed the country in his January State of the Union speech about key proposals he has for our government.

Forbes recently detailed some of the key proposals from the President in its article titled “President's New Tax Proposal Would Hit Wealthy, Benefit Middle Class.”

Florida Puts Focus on Elder Rights and Guardianship

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

This year, two legislators who pressed for reform in 2014 are back with new bills they believe have stronger chances of success, as the excesses possible within Florida's guardianship system become more widely known.

A recent article in The Herald Tribune, titled “Legislation aims to curb abuses in guardianship system,” reports that two of Florida’s legislators are addressing the excesses possible within Florida's guardianship system. Florida law has a list of 14 rights that an elder may surrender as a result of the guardianship process. These include the rights to marry, vote, manage finances, determine where to live and accept medical care.

The Florida bill includes these types of actions:

Houston Planners Should Note New Estate Tax Exemption

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

In 2015, only estates worth more than $5.43 million per individual would owe federal estate taxes if the estate owner dies this year. That's up from last year's $5.34 million estate tax exemption. (In addition, the federal lifetime gift tax exemption also rises to $5.43 million in 2015.)

2015 brings new changes to the estate tax exemption. Experts agree that this change (and others) means that a fresh look at estate planning and asset protection should be top priorities for individuals planning for retirement or who are already retired.

The Investor's Business Daily says this could be good news in its article“Estate Planning For 2015: How To Protect Assets From Taxes” as it could possibly create better asset protection. However, the article also warns of the complexity of these changes, and that you should consult an experienced estate planning attorney to ensure that your particular circumstances are addressed.

529 Plans and Tax Incentives for Houston Families

Published on: January 23, 2015 | By McCulloch & Miller, PLLC

“We see that as a big driver for everyone – the opportunity to put your money into the market and get that appreciation and have all those earnings tax-free when you use them for qualified expenses at a university or trade school, or wherever your child or grandchild, or whoever it is you're saving for, decides to go,” Creonte says.

If you are saving up for your child's (or grandchild's) college education, you'll want to consider a 529 College Savings Plan.

What is a 529 Savings Plan? A 529 plan lets an individual contribute after-tax dollars that are designated for qualified higher-education expenses. These expenses include tuition and fees, books, room and board, computers, and supplies. The distributions of these funds for qualified higher-education expenses are not subject to federal income tax. However, states may treat these disbursements differently. As a result, 529 plan investors need to understand the tax strategies that are available to them.

Staying in Control of Your Houston Business

Published on: January 22, 2015 | By McCulloch & Miller, PLLC

Many business owners fear losing control. Before they’re willing to address exit or estate planning options, they must first be assured of complete dominion over their business. So let’s look at how to lock in ownership.

Are you worried about losing control of your business?

A recent Forbes article, “Control Freaks Take Heart: How To Maintain Control Of Your Business,” offers some ways to assure firm control of a closely-held company.

New Year…New Financial Goals for Houston Families

Published on: January 21, 2015 | By McCulloch & Miller, PLLC

The New Year is a great time to regroup on your financial plans, reevaluate and/or create new financial goals. By sticking to your financial resolutions throughout the year, you can keep on track towards achieving your financial objectives in 2015 and beyond.

Make the New Year a happy one by getting your finances in order. Setting some basic goals can help make 2015 one of the best years yet.

Make a budget. Creating a budget is the key to long-term financial success. Nonetheless, a 2013 Gallup poll found that only one in three Americans maintained a budget. A budget takes on even more importance when you plan to move into retirement and leave a steady paycheck to live on a fixed income.