Asset Protection

A Review of Perpetual Trusts?

Published on: December 15, 2014 | By McCulloch & Miller, PLLC

“Why do we care about these perpetual trusts?” Mr. Sitkoff said. “Because there’s a lot of money in them. Billions of dollars is pouring into these jurisdictions.”

Perpetual trusts: good or bad? The principle of this tool is up for debate.

Perpetual trusts allow trust creators to maintain some control after they pass, and help protect fortunes from taxes and creditors. However, people who set up these perpetual trusts in states where they’re legal could have some headaches as lawsuits brought in a state where the trusts are prohibited could mean the out-of-state assets could be counted in any settlement.

Houston Residents and Roth IRAs

Published on: December 12, 2014 | By McCulloch & Miller, PLLC

These three questions merely scratch the surface of other factors that may need to be considered. Keep in mind that your estate at age 45 is likely very different from the one you’ll have at age 65 and 85 — your accounts change, you spend/inherit assets, and you gain/lose family members. The more complex your situation, the more you’ll benefit from working with a skilled financial adviser, tax specialist, and estate attorney.

If you are considering a Roth IRA, ask yourself these three questions:

1. Will your Roth outlive you? In estate planning, the top two reasons for Roth conversions are to bequeath tax-free assets and to reduce your taxable estate. It’s critical to project your spending lifestyle relative to your net worth to understand how your assets may be used in retirement. This allows you to see what assets are likely to be part of your remaining estate.

WWII Vet Victim of Elder Abuse

Published on: December 11, 2014 | By McCulloch & Miller, PLLC

Through a series of legal maneuvers and Iowa's then-blind eye toward financial elder abuse, his caregiver betrayed the World War II Navy veteran's trust and drained his savings over a number of years, according to friends and court documents.

According to an article reported in The Des Moines Register, titled "Caregiver's $700K theft shakes elder advocates," the cost of financial exploitation against seniors is more than $2.6 billion a year in our country, and one in 10 financial abuse victims turns to Medicaid as a result.

Cases like World War II VeteranJames Ruby's are, unfortunately, not uncommon. Seniors fall victim to financial abuse every day.

Trusts Remain Good Ideas for Houston Families

Published on: December 10, 2014 | By McCulloch & Miller, PLLC

Irrevocable trusts, which are virtually unchangeable once established, have decreased in use, but revocable trusts, over which the grantor retains control, still flourish.

A recent Cincinnati.com article, titled “Trusts remain useful tool in estate planning,” addressed some confusion over the use of trusts in light of recent changes in the law.

One very popular estate planning tool, the revocable trust, remains very much the foundation for many estate plans and is used frequently. In this arrangement, the maker of the trust (the person planning his or her estate) retains total control over the assets, but bypasses probate should the trust maker become incapacitated or die.

Only the Rich Need a Trust in Houston? Wrong!

Published on: December 9, 2014 | By McCulloch & Miller, PLLC

By keeping even modest sums of money protected, trusts can ensure that your wishes for your money will be honored into the future.

A recent article by the Motley Fool,titled "5 Things You Didn't Know — but Should! — About Trusts," sheds some light on common misperceptions of trusts.

Here are a few beneficial takeaways from the article for Houston families:

Leaving Texas or Home State to Retire? Do Estate Planning Homework First

Published on: December 8, 2014 | By McCulloch & Miller, PLLC

"During their careers, their 'acquiring wealth years,' many people live in places that have lots of jobs – and the higher cost of living that goes along with that," Friedman says. "In retirement, many of them want to move to a state where they can enjoy the same or an even better lifestyle with less money. For that, it's essential to consider not only the cost of living but the state laws that affect your accumulated wealth and income."

Pre-retirees need to consider a lot more than snow days and tradition, according to a 2014 Bankrate report and a recent Investor Ideas article titled "3 Tips for Retiring Out of State."

States have different tax laws and other regulations that can significantly affect your retirement funds. Be aware of these as you plan for where you want to live and how you want to live.

Does Your Houston Estate’s Library Hold Great Value?

Published on: December 3, 2014 | By McCulloch & Miller, PLLC

Managing an estate can be complicated and overwhelming, but libraries can often be sources of hidden value, and thus should not be ignored. There's always a chance that tucked away in that library are a few rare first editions or hard-to-find antique items. But if you're facing hundreds of volumes and you have little experience with books, where do you start?

Libraries and rare books may not be your idea of a good inheritance, but they can actually be hidden treasures if you do your research. A recent JD Supraarticle, titled “California Estate Planning: What to Do if You Inherit a Library,” warns against failing to value books that are left as part of an estate.

You never know if the library has tucked away an inscribed first edition of “For Whom the Bell Tolls” by Ernest Hemingway. That’s going for $8,500 on Ebay right now. Or maybe a signed J.D. Salinger “The Catcher in The Rye.” Asking price for this is only $55,000 these days. These rare first editions or hard-to-find antique items are out there. If you are left with the responsibility of sorting through a collection containing hundreds of volumes, and you have little experience with books, where do you start?

Providing for Houston Heirs, Regardless of Wealth

Published on: December 2, 2014 | By McCulloch & Miller, PLLC

“Regardless of how much wealth you have,” says Gregory Popera, a private wealth adviser with Bank of America Merrill Lynch, “having some type of estate plan and financial power of attorney are sort of the financial building blocks to make sure your assets go where you want them to go.”

Making sure your heirs are taken care of once you pass is an important goal of estate planning. And you don't have to be among the wealthy to create financial stability for your loved ones.

The Washington Post recently discussed practical strategies for financial security in an article titled "How to pass money on to your children."

Planning for Death Is Unpleasant; Critical for Houston Families

Published on: December 1, 2014 | By McCulloch & Miller, PLLC

Once someone dies there is much work to be done. These are a few suggestions to help you get administratively organized for death.

To make death easier for all involved, it’s critical to plan some of the issues related to death far in advance with some contemplation to make everything go as smoothly as possible when a loved one passes away.

When a loved one dies you have to remember IRS deadlines, Social Security Administration requirements, compliance with state laws, and dealing with other grieving family members. There’s also the chance you might have some relatives who feel entitled to more or different assets.

Helpful Houston Estate Planning Add-Ons: A Letter of Instruction

Published on: November 28, 2014 | By McCulloch & Miller, PLLC

Where there’s a will, there’s a way—and sometimes an ugly family feud. Families are consumed with grief when a loved one dies, but unfortunately certain legal and organizational tasks that arise can’t be ignored or put off for long. But you can ease the burden on your loved ones by making some simple preparations in addition to a will.

Sometimes your family may need more detail than what is normally included in a will. To get in front of hard feelings and potential conflicts over your personal possessions, think about adding a letter of instruction to your will. This is an informal document you can draft which isn’t legally binding, but can be a helpful guide for your family.

A recent article in The Wall Street Journal, titled “When a Will is Not Enough,” suggests that you organize your letter into three sections: funeral arrangements, financial and personal affairs, and distribution of personal effects.