Estate Planning

The Boomer Inheritance Boomerang May Impact Houston Families

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

For heirs, the emotions that come with sudden wealth can be a mix of guilt, loss, anger, regret, relief and hurt, perhaps stewed with long-simmering family rivalries and resentments.

Much of estate planning focuses on the technical aspects of leaving behind or receiving an inheritance. Commonly, these include the tax questions, the legal questions, and the nitty-gritty details. In the midst of all of the numbers and code sections, it is easy to overlook the very emotional nature of inheritance itself.

Indeed, the Boomers of today are experiencing an unprecedented period of wealth transfer. What does it mean for a Boomer to inherit these days? The New York Times approached the subject a short time ago in an article titled “When Boomers Inherit, Complications May Follow.”

Unequal Inheritances: How Do Houston Families Slice the Pie?

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

Advisors say it doesn’t happen often, but parents who divide their assets unevenly are playing with fire. That said, there are things they can do to try to keep the fire under control, so it doesn’t become a conflagration that blows the family up.

Sometimes it is easy to split up your assets like pieces of the pie, with equal pieces for everyone. Sometimes, the assets just do not split that way or maybe you do not want to split them equally. For those who receive something less than equal, they may feel spurned or sense favoritism.

How do you split your estate unevenly and still keep the peace in the family or, at the very least, keep it out of the courts?

Houston Families Can Plan A Family Business Legacy

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

These two experiences taught me a lesson about family businesses. Making a family business a family legacy takes planning and preparation. While each family business has its own unique issues, there are some common strategies associated with succession planning.

Sometimes, passing along your assets to the next generation is simply a matter of passing them along. You just let the gift and the potential represented by that gift be your legacy (emphasis on the “sometimes”). However, when the asset is a business, it is rarely that simple.

A business is not merely a thing. No, a business is a mindset, an activity and, oftentimes, even a lifestyle. It can get complicated. If your legacy is the family business, then with great responsibility comes the need for equally careful planning, preparation and dialogue.

Estate Planning With A Life Estate in Houston

Published on: March 5, 2014 | By McCulloch & Miller, PLLC

Probate court is no one's idea of fun, so it's something you may want to spare your heirs when they inherit your home. One simple tool for doing that: a "life estate."

Do you want to avoid probate when it comes to the transfer of your assets at death, especially when it comes to your home? Perhaps you would prefer that home to pass directly into the hands of your adult heirs. If yes, then consider using a “life estate” approach.

If the concept of a life estate is new to you, then a recent article in The Wall Street Journal ought to be on your reading list. As the article titled “An Easy Way for Heirs to Inherit Your Home” explains, a life estate for real estate operates like a “payable-on-death account” for a bank account.

When Children Are Responsible For The Nursing Home Bill

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

If your parents live in one of 29 states or Puerto Rico that has filial responsibility laws on the books, you could potentially be held legally responsible for their care under certain circumstances, such as when your parents are ailing and without sufficient financial resources to take care of themselves. Until recently, these statutes have been largely ignored. However, several recent court decisions indicate that there might be renewed interest in enforcing them.

Filial support is not just a moral virtue. In many parts of the country and branches of the legal system filial support is a legal imperative. Filial support laws exist in 29 states as well as Puerto Rico, and have quietly existed on the books for some time. Now, however, these laws are a very real and present concern for the adult children of elderly loved ones.

Fortunately, Forbes has provided a crash course regarding filial laws and their potential challenges in an article titled “Who Will Pay For Mom's Or Dad's Nursing Home Bill? Filial Support Laws And Long-Term Care.”

Houston: Family Wealth And Financial Entropy

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

The numbers also show that roughly one in three businesses pass to the next generation. Just about 10% of family businesses pass to the grandchildren’s generation. Still fewer make it to the subsequent generation. Regardless of the reasons, family money seems to move away from that which created it. Among wealth advisors, there is a saying: the first generation makes it, the second generation spends it, and the third generation blows it.

Family wealth created through a family business can be a wonderful blessing for a family. The trick is keeping it through the generations. Far too few families make proper plans to keep the family business going between generations. That is where the real work needs to be done.

Only the big family names (think “Rockefeller”) lead us to believe that family wealth is perpetual. In reality, family wealth left unchecked has a tendency to follow the laws of entropy as it devolves into chaos and greater and greater breakdown or division. This phenomenon, along with some constructive advice, is featured in a two-part Forbes article titled “How The Wealthiest Families Make And Lose Their Money.”

Houston Families: Consider Gifting Your IRA To Your Grandchildren

Published on: February 25, 2014 | By McCulloch & Miller, PLLC

Whichever way you pass on your retirement account assets, leaving an IRA can provide a grandchild with a significant financial foundation.

Think of an IRA as a potentially powerful estate planning tool. Properly structured, an IRA may transfer wealth to younger generations. In fact, the younger, the better.

Kiplinger raised this point in its January edition with an article titled “Pass an IRA to Young Grandkids With Care.”

Houston Residents: Planning for the Final Chapter

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

Completing the following four tasks can help you meet any last obligations to your loved ones, ensure your final days are spent as you want, and reconcile your dreams with the realities of your life.

Is a goal without a plan just a wish? Regardless of the goals you have for your estate, loved ones or retirement, if you don't have a plan in place you may never reach your goals. There are some very real decisions to be made against the very real timeline of your life.

So, why do you need to plan? This may be a perfect time to step back and get a little perspective.

Medicaid’s Give And Take

Published on: February 18, 2014 | By McCulloch & Miller, PLLC

The fear that the government could one day seize their homes is deterring some people from signing up for Medicaid.

Medicaid comes with a lot of give and take. It is a safety net for those who need it, but it does come with its drawbacks. One drawback many are now discovering is “Medicaid Asset Recovery.”

So, what is “Medicaid Asset Recovery”? In layman’s terms: after you pass away the government can recoup the benefits you received from Medicaid by taking from your remaining assets, which usually means your house.

Preparing A Will: What, Where And Why for Houston Residents

Published on: February 17, 2014 | By McCulloch & Miller, PLLC

You should prepare a will so your heirs will be taken care of in an organized, legal and efficient manner, according to your wishes.

Preparing your will is not exactly a "fun" thing to do, as most people don't want to think about the end of their own lives. Even Baby Boomers that are reaching that stage of life procrastinate on this arduous task.

Whether you tell yourself there is still time or “I do not have enough assets to have an estate worthy of planning,” the excuses likely run much deeper. Perhaps you are intimidated by the process, by the concept of facing mortality, or the fact that you really need to involve (and pay) an attorney to help you.