Estate Law

A Family Loan Vs. A Family Gift For Houston Families

Published on: March 19, 2014 | By McCulloch & Miller, PLLC

Be prepared to demonstrate that the loan is legitimate, and that repayments are being made regularly. This documentation can also help sort matters out if the lender should die before the full value of the loan has been repaid.

If you are compelled to help out a family member by way of an intra-family loan, make sure you are aware of all the ins and outs before you extend the offer. The benefits of incorporating family loans into your estate plan were pointed out a short time ago in an article titled “Estate planning benefits of intra-family loans” on LifeHealthPro.com.

The benefits of making a loan are not immediately obvious because that means, by definition, the loaned assets are to be returned to the estate of the one granting the loan, plus interest. Yes, if you make a loan to a family member you still have to expect it back and charge interest at the federally mandated interest rate, the Applicable Federal Rate (or AFR) for the relevant time-frame of the loan. Otherwise, it is not a “loan,” but a “gift” and is subject to an entirely different set of rules.

Some States Propose Changes To State Death Taxes

Published on: February 26, 2014 | By McCulloch & Miller, PLLC

New York’s governor, Andrew M. Cuomo, took a step toward bringing the state’s estate tax in line with the federal one. And he is not alone among governors of cold-weather states (along with the District of Columbia) that have realized affluent residents are moving to states without estate taxes (and in some cases, income taxes) and in doing so, depriving their old state of the other taxes they paid, like property, sales and income tax.

With the federal estate tax exemption climbing to more generous levels, many states are considering a change in their own estate taxes. Why? Because taxpayers who are in the clear when it comes to federal death taxes may still be hit with state death taxes.

Will the states follow suit and drop draconian estate laws?

Protect Your Beloved Pet With A “Pet Trust” in Houston

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

"Pet trusts aren't just for the wealthy," says Frances Carlisle, a trust and estates attorney in New York. For most pet owners, she adds, the goal "is to make sure a plan exists for the care of the animal."

Do you own a pet? It seems as though more and more people are taking in pets these days. In fact, from 2010 to 2012, the number of pet-owning households increased from 62% to 68%. Consequently, more pet owners are taking their beloved pets into consideration when it comes to their estate plans.

Maybe you have heard the term “pet trust” before. Even if you have, The Wall Street Journal has provided the latest information on planning for your pet and some noteworthy statistics in a recent article titled “More Americans Are Writing Their Pets Into Their Wills.”

When Can Houstonians Use An Estate Tax “Portability” Exemption?

Published on: February 7, 2014 | By McCulloch & Miller, PLLC

Just when is the DSUE [Deceased Spouse Unused Exemption] available to a surviving spouse or the estate of a surviving spouse for use in determining the surviving spouse’s applicable exclusion amount?

It can be very challenging to stay on top of federal estate tax law changes. For instance, experts and taxpayers alike are grappling with the ins and outs of “portability.” How and when can it be used?

The temporary regulations governing portability are now on the books. While there is some guidance regarding how a “Deceased Spouse Unused Exemption” (DSUE) actually works, a recent Forbes article, titled “Estate Tax Portability – Date DSUE Amount May Be Taken Into Account,” provides some practical advice.

No Beneficiary Designation? An IRA “Uh-Oh” for Houston Families

Published on: February 6, 2014 | By McCulloch & Miller, PLLC

We say it over and over again. Check your beneficiary forms! Don't let your retirement funds go down the drain.

Anything involving the court system is rarely quick and painless (probate anyone?). Fortunately, IRAs can easily be transferred to your loved ones outside of probate simply by completing a beneficiary designation form. But what if there was no beneficiary designation form completed? Uh-oh, what now?

The slightly messy situation of an IRA left without a beneficiary was tackled recently by Ed Slott’s blog, The Slott Report. The article, titled “There is No Beneficiary on the Retirement Account: Now What?,” is the perfect encouragement to ensure that every beneficiary form is filled out and up to date.

Options in Houston Include Six Unique Trusts For Unique Circumstances

Published on: February 4, 2014 | By McCulloch & Miller, PLLC

You might be a candidate for a trust that you never needed before.

A trust is a great tool within an estate plan, one with unique goals depending upon the one making the plan. Some goals are very common, while others don't exactly follow the mainstream.

A recent lighthearted Forbes article titled “Six Trusts For The Person Who Has Everything Else” pulled back the curtain for a look into the world of unique trusts for unique circumstances. [Spoiler alert: There are really four trusts, one special bank account, and one misguided attempt to emulate the trust format.]

Inherited Homes And The Challenges Ahead for Houston Families

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

The process of selling a relative’s home is likely going to be emotional, from the sorting of the personal belongings to the finalization of the sale at the closing table. Expect that. And surround yourself with professionals who will be empathetic and helpful.

Many would agree that selling a home is a stressful process, maybe even claiming a spot on the "top 10 most stressful life moments" list. Even if it sells fast, there is still the hassle of moving itself. What about hen it is not your home at all? What if it is the home of your parents, and perhaps your sole inheritance, with or without siblings?

When it comes to selling an inherited home, there are some complications to ride out and with which you must deal. For guidance, consider reading are recent MarketWatch article titled “How to sell an inherited home.”

Houston Residents: Time for A Check-Up For Your Trust

Published on: January 24, 2014 | By McCulloch & Miller, PLLC

… Make sure that you understand what is in your trust. Other issues, particularly those related to tax issues, will require consulting with an estate planning professional.

Do you have a trust? Trusts are powerful estate planning tools, those of which should be properly established and properly maintained. When it comes to revocable trusts, also known as “living” trusts, ElderLawAnswers offers a convenient and instructive checklist of the things to watch and the things that can go wrong in an article titled “9 (Potential) Problems with Your Trust.”

These nine (potential) problems reside in these questions:

New Year, New Estate Plan for Houston Residents

Published on: January 20, 2014 | By McCulloch & Miller, PLLC

Estate planning is a difficult topic to address because it requires you to think about a world without you in it. No one likes to reflect on their own demise, which is why many people simply put estate planning off for another day and only get around to it when the chips are down.

A new year means a new start — another "go" at those to-do lists. Will estate planning make the list this year? Estate planning is not always easy think about, but it is oh so necessary.

Understandably, musing over matters of your own disability and death are not at the top of anyone’s list of “fun things to do,” they are a matter of personal, adult responsibility. In addition, plans can get rather complex when it comes to complex lives, complex families, and complex assets. As with most complex but essential matters in life, it is best to start with the basics.

What Is Survivorship Insurance?

Published on: January 6, 2014 | By McCulloch & Miller, PLLC

Some wealthy people are taking another look at survivorship insurance. The relatively obscure product, also known as "second-to die" insurance, insures two lives, usually spouses, with one policy.Like its name indicates, the product pays out the benefit after the death of the second insured.

Where there is a risk and an attending financial exposure you cannot afford, there is a form of insurance to cover that risk exposure. When it comes to the ultimate risk – your family’s risk of losing you – life insurance is the fundamental solution. But what if there are two spouses? Naturally, financial risk is felt by the survivor at the passing of the first. That is why almost everyone needs some form of life insurance to provide for the surviving spouse. However, when there is some quantifiable financial risk left behind when the survivor passes, then there is a special form of life insurance to cover such exposure. It is called “survivorship life insurance.”

For the basics on survivorship insurance, consider reading a recent Forbes article titled “Sales of Survivorship Insurance Gain.”