Estate Tax

Supreme Court Ruling Says IRAs Not Protected from Bankruptcy

Published on: October 30, 2014 | By McCulloch & Miller, PLLC

As a result, financial advisers and families are taking steps to shield IRA assets for children and other beneficiaries in case those heirs ever find themselves in bankruptcy proceedings.

Is your IRA protected from creditors in the event of bankruptcy? Not anymore. Because of the recent unanimous high court decision, experts and families are taking steps to protect IRA assets for beneficiaries in the event those heirs declare bankruptcy.

A recent Wall Street Journalarticle, "Court Ruling Sparks Rush to Shield IRAs," finds that many advisers are urging clients to create a trust as the IRA’s beneficiary, or to set up an IRA as a trust account while the owner is still alive. Either way, the original owner has access to the money before he or she dies. Depending on the type and terms, trusts can shield assets (including an IRA) against creditors.

Consider These Inheritance Planning Questions for Houston Estates

Published on: October 16, 2014 | By McCulloch & Miller, PLLC

Making decisions about the disposition of your assets can be an emotionally fraught and time-consuming process. Take small steps and seek expert guidance to realize your plans for the financial care of your families.

Who gets what when it comes to your estate? The process of distributing your assets is no easy task.

A recent Forbesarticle, titled "Estate Planning 101: Picking Your Heirs," provides some very useful instructions on basic estate planning. The article lists a series of questions that can help you organize your thoughts and prioritize your planning.

Trust Myths Busted for Houston Families

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

They can be incredibly useful tools, and thanks to the publicity, more people may consider using them, but many people misunderstand how trusts work. Let's take a look at — and dispel — three common myths about them.

Are trusts too much work? Are they only for the rich and famous? Do you really need to establish a trust before you die?

Trusts can be very useful tools, but few people understand how trusts work. Daily Financerecently posted an article titled "3 Myths About Trusts That You Can't Afford to Believe." This article examines and dispels three common myths about trusts.

Financial Planning Has Four Seasons In Houston

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

Below are key financial planning tips to guide you through the four seasons of your financial life.

With summer ending and fall around the corner, the changing of seasons is almost upon us. Just as the seasons change with each passing year, your financial seasons change as well.

An article titled "The four seasons of financial planning," as recently published in the Las Vegas Review Journal, explained the four “financial seasons” of life, which can help you see where you are now and what you need to do in the future. Understanding the change of seasons and how to handle your money will ultimately determine if you are successful in attaining or exceeding your long-term financial goals.

Save Your DIY Skills for Saturday Projects, Not Your Houston Estate Plan

Published on: September 30, 2014 | By McCulloch & Miller, PLLC

The important point to keep in mind is that DIY estate planning provides forms and not legal advice. An attorney may provide you insights into your situation and prepare documents that are specifically tailored to your circumstances and needs, potentially saving your loved ones expense and frustration. Before embarking on a DIY estate plan, consider the pros and cons carefully.

If you think your Saturday DIY projects should include an estate plan, think again.

A recent article on WMUR.com Money Matters, titled "The potential pitfalls of DIY estate planning," gives us some pros and cons to consider before trying your hand at creating your own estate plan.

Worried About Estate Taxes? Don’t Die in These States Next Year!

Published on: September 29, 2014 | By McCulloch & Miller, PLLC

Moving to New York to avoid state death taxes? “When your bordering state is telling you, ‘Come on over!’ the pitch is compelling,” McManus says. “If New York has a more welcoming tax scheme, then people will say, ‘Let’s call me a New York resident.’” McManus says that he and his wife might make the New York move in retirement themselves; they already have a place in the West Village they rent out for now.

Would your state's death tax prompt you to move to another state? You wouldn't be the first to consider relocation.

The number of death tax jurisdictions is 19 states plus D.C. at present. However, there are several states making changes for 2015. These states are lessening the death tax liability by increasing the exemption dollar threshold, figuring in inflation, and eliminating “cliff” provisions that tax the first dollar of an estate.

Advantages of 529 Plans for Houston Investors

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

Even though many gifts no longer make tax sense, 529 plans remain viable options for both estate tax exclusion and income tax reduction, without much complexity and cost.

Which gifts make sense for taxes these days? Consider your options.

Before recent changes to the federal estate tax exemption amount (i.e., $5 million per taxpayer, as indexed for inflation), taxpayers were encouraged to make lifetime gifts to reduce their federal estate tax. This was especially the case when the exemption was $1 million per taxpayer with top 55% rate on any amount over that. Now, however, the common advice is for all but the über wealthy to retain their assets to ensure there is enough to live on during their lifetime. According to a recent National Law Review article, titled "529 Plans: Estate Tax and Income Tax Advantages," a second benefit of passing assets at death is that the recipient of the assets obtains a "step up" in the assets' basis to fair market value—avoiding income tax on the sale.

Joan Rivers’ Dream Hollywood Funeral – Is It Tax Deductible?

Published on: September 23, 2014 | By McCulloch & Miller, PLLC

On September 4, 2014, comedy icon Joan Rivers passed away. It's no secret that Rivers hoped for a funeral that rivaled her lifestyle: big and over the top.

Craft services. Paparazzi. Meryl Streep crying in five different accents. These are just a few of the wishes the late Joan Rivers had for her Hollywood funeral. Those arrangements, Forbes reports–Meryl Streep notwithstanding–would be easy to arrange with the late Joan Rivers’ money. The article is titled"Saying Goodbye To Joan Rivers: The Bigger The Funeral, The Bigger The Tax Deduction?"

Rivers' income from book royalties, appearance fees and salary at E! Television, plus sales of her QVC merchandise may have exceeded $1 billion. So, Joan could afford the big farewell.

Houston’s Billionaire, Bunny and Big Court Battle

Published on: September 22, 2014 | By McCulloch & Miller, PLLC

After nearly 20 years of litigation and fighting in the press, the conflict between the estates of Anna Nicole Smith and her billionaire husband J. Howard Marshall has been resolved.

A celebrity estate battle that held center state in Houston gives us another valuable estate planning lesson. A recent WealthManagement.com article, titled "Anna Nicole Smith’s Estate Runs Out of Options," illustrates the critical importance of creating estate planning documents that have as much detail as possible.

Anna Nicole Smith was a famous Guess Jeans model and Playboy Playmate. She married J. Howard Marshall in 1994, after meeting in the Texas strip club where Smith worked. Smith was 26, and he was 89. Marshall died 14 months later and left his entire $1.6 billion estate to his son, Pierce. Anna Nicole received nothing.

Houston Scam Alert! Don’t Fall Victim to Estate Planning Cons

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

Constantly in the news, it seems like there is a new scam making headlines. One surprising area in which scams are becoming more common is estate planning. Each year, more people fall victim to unscrupulous and unqualified sellers of ineffective estate planning documents. Often, these scammers are door-to-door salesmen or telemarketers.

Estate planning is a very personal and essential process to protect your loved ones and your assets. And all it takes is a scammer to mess that all up. A recent Webwire article, titled "How to Avoid an Estate Planning Scam," points out things to keep in mind when considering your estate planning options.

Employ a qualified estate planning attorney. Do-It-Yourself is very popular these days, from home improvement to filing income taxes. There are many websites that offer DIY wills. Beware! Estate planning is not a point-and-click or fill-in-the-blank proposition: it is a complex area of law with different rules depending on where you reside. Use a licensed, experienced estate planning attorney to prepare your estate plan. Check with the state bar and make sure he or she is licensed to practice law in your state.