Asset Protection

What Happens to Credit Card Debt When Someone Dies in Texas?

Published on: September 3, 2019 | By McCulloch & Miller, PLLC

Here’s a legacy that you may not want to leave for your family to pay: your credit card debt. It doesn’t go away when you die.

Three out of four consumers die in debt, says Yahoo Finance’s recent article, “What Happens to Credit Card Debt When You Die?” That means the executor has to pay the debt, and the money comes from what might have been an inheritance. If you have many debts, the inheritance may become very small—or vanish altogether.

If you’re worried about your family being stuck with your debts after you die, know your rights and work with an estate planning attorney to help protect your assets.

How Does “Community Property” Work in Texas?

Published on: August 14, 2019 | By McCulloch & Miller, PLLC

One of the reasons for a pre-nuptial agreement, is to clarify who owns what in the marriage, and what happens to property if the marriage should dissolve. In a community property state, everything is “ours.”

If you live in a community property state, like Texas, and you are married, both spouses own and have an equal right to assets, which are considered marital property. The issue is explored in nj.com’s recent article, “Does this house really become community property after marriage?”

Let’s imagine you own a home before your second marriage and created a will leaving the condo to a child. However, you sold the home and purchased another house in your name using funds from the sale and your own funds.

Estate Planning Basics You Need to Know

Published on: August 12, 2019 | By McCulloch & Miller, PLLC

Estate planning is not as much fun as vacation planning, but it is something you do for your loved ones to save them a lot of stress. It can also provide a surprising sense of relief to have this task completed.

It’s hard for anyone to consider their own mortality. However, that doesn’t mean you don’t need to protect your family by making sure you have a well-designed estate plan for distributing your assets, communicating your intentions and getting organized. Think of it as tidying up your life.

Forbes’s article, “Estate Planning: What You Need To Know,” says that this preparation means asking yourself questions that can make you uncomfortable, like the following:

How Do Lifetime Gifting Strategies Work?

Published on: August 9, 2019 | By McCulloch & Miller, PLLC

Wealth transfer occurs in a number of different ways, and sometimes there are too many choices. How do you decide which strategy to use? Start by educating yourself about some of the fundamentals of lifetime gifting.

Gifting strategies are used to minimize the tax burden on estates and preserve assets, since they promote the transfer of wealth across generations. There are five frequently used lifetime gifting strategies outlined in a recent article from Forbes, “5 Lifetime Gift Strategies For You And Your Family To Consider.” For families with significant assets, these need to be discussed with their estate planning attorney to see how they will fit with the family’s overall estate plan.

A grantor retained annuity trust (GRAT) is an irrevocable trust that can be a good choice, if you want to transfer hard-to-value assets. A GRAT also lets you keep your income stream, divide property interests and make discounted gifts to future generations. With a GRAT, the grantor transfers assets to a trust but maintains a right to an annual income stream, or annuity payment, for a specific period of time. The income stream’s value is deducted from the value of the transferred assets when determining the gift’s full taxable value. Anything left in the GRAT after the annuity period expires, is given to the trust’s beneficiaries without any more gift or estate taxes. However, if the grantor dies before the end of the trust term, the whole value of the trust will be included in the taxable estate (like the trust had never been created). Therefore, you can see how important it can be to carefully choose the term of the trust, so the grantor is likely to live beyond its termination.

Why Do I Need an Attorney’s Help with Estate Planning?

Published on: July 30, 2019 | By McCulloch & Miller, PLLC

When you die, the assets you’ve accumulated during your lifetime have to be distributed. If you don’t make a plan, your family may be left to clean up a legal mess, quarrel amongst themselves, or watch as a long-lost family member is given everything by a court decision.

An estate planning attorney helps clients, by making sure that the distribution of property after the person dies is done the way they wanted it done. While a plan may be simple or complicated, says the New Hampshire Union Leader in a recent article, “Estate planning is important and may require help from a professional,” working with an experienced estate planning attorney will save your family time, unnecessary costs and stress.

You definitely need to work with an attorney if your life falls into any of these categories:

Left Out of Dad’s Will, Court Awards Son $15 Million

Published on: July 25, 2019 | By McCulloch & Miller, PLLC

The fight over Conrad Prebys’ $1 billion estate continues, three years after the San Diego developer and philanthropist died.

When the directors of the Conrad Prebys Foundation decided to give his son Eric $15 million, despite the fact that his father had left him out of the will, Preby’s longtime partner tried to sue them.

The San Diego Union-Tribune reported in the article “Court fight continues over control of $1 billion Prebys estate,” that in January, a San Diego Superior Court judge dismissed Debra Turner’s suit, holding that she had no legal standing to bring it. She then filed an amended complaint. However, the judge recently dismissed her lawsuit.

Is a Trust Right for Your Estate Plan?

Published on: July 24, 2019 | By McCulloch & Miller, PLLC

A trust is a complex document, but taking the time to read it a few times will prove enlightening. If you have questions, call your estate planning attorney, so they can help clarify anything you don’t understand.

Attorneys do try to simplify documents when they can, so that clients will have a better understanding of what goes into their estate plans. However, according to a recent article from Forbes, “A Beginner's Guide To Reading A Trust,” there’s still enough legal language in trusts that they can sometimes be confusing. Here are some basics about trusts.

First, familiarize yourself with the terms. There are basic terms of the trust that you’ll need to know. Most of this can be found on its first page, such as the person who created the trust. He or she is frequently referred to as the donor, grantor or settlor. It is also necessary to identify the trustee, who will hold the trust assets and administer them for the benefit of the beneficiaries, and any successor trustees.

These Money Mistakes Add Up Fast

Published on: July 22, 2019 | By McCulloch & Miller, PLLC

It’s not how much you earn, but how much you keep that makes the difference in lifestyle and retirement. Keep more of your hard-earned money, by making fewer money mistakes.

Some of the most common money mistakes cost thousands of dollars. All you need to do is pay attention to avoid them, says Motley Fool in the article, “5 Money Mistakes You Probably Don't Even Realize You're Making.” See if any of these sound familiar and take control of your financial health today.

No clue to recurring charges. Unless you regularly review your credit card bills, you can easily miss monthly charges that you don’t need, like not cancelling a gym membership. Some automatic monthly charges increase over time, which you won’t notice unless you’re checking those bills.

How Trusts Solve Problems in Estate Planning

Published on: July 11, 2019 | By McCulloch & Miller, PLLC

Think of trusts like the Swiss army knives of estate planning. There are many different trusts that are used to accomplish many different tasks.

At its essence, a trust is a legal document that permits a third party, called the trustee, to hold assets on behalf of a beneficiary. The trustee has a fiduciary duty to the beneficiary, that is, the trust must put the beneficiary’s needs first. The trust document is drafted to address issues like how and when assets pass to the beneficiaries, what conditions must be met for the beneficiaries to receive assets, etc.

Because trusts usually avoid probate, the beneficiaries can get access to these assets more quickly than they might if the assets were transferred using a will. If it’s an irrevocable trust, it may not be considered part of the taxable estate, which means there will be fewer taxes due at your death.

Who Pays the Car Lease if the Lease Holder Dies?

Published on: July 9, 2019 | By McCulloch & Miller, PLLC

If you are among the millions of Americans who prefer to lease a car rather than buy it, you have obligations that are spelled out in the lease agreement. That contract and the laws of your state direct what happens, when a lease owner passes away.

What if the salesman at the car dealership shakes your hand and says don’t worry about a thing when you ask if your spouse is responsible for a lease if you die? Check the fine print, advises nj.com in the article “What happens to my car lease when I die?” There are a few parties to that contract, including the car dealership, the financing company and the person leasing the car.

Remember that a vehicle lease is a contract, so if you're the executor who’s managing the deceased person's affairs, you should review the terms of the vehicle lease. In some instances, death may be classified as an "early termination" of the lease, and payment obligations may continue.