Estate Tax

Don’t Have a Will? Do You Know What Happens?

Published on: June 29, 2015 | By McCulloch & Miller, PLLC

In some parts of the U.S., like West Virginia, without a will, your estate is first distributed according to your marital status and children, including those of previous marriages. However, if you have no spouse or children, you may want to pull out your family tree to see who could be in the running.

When there is no will in place, commonly in West Virginia, the current spouse of a married couple with or without one or more descendants receives the full estate. However, your spouse would receive only 60% of the estate if he or she had children with you and also a previous marriage. Your children would then receive the remaining 40% of the estate. But if you were the spouse with kids from a previous marriage(s), then all your children will inherit one-half of your estate, and the other half to your current spouse.

Confused yet? That’s what The (Huntington, WV) Herald-Dispatch asks us in its recent article titled “Planning ahead: What happens if you don't have a will.”

You’re Getting Married? Is Your Estate Plan Current?

Published on: June 10, 2015 | By McCulloch & Miller, PLLC

At some point, everyone needs to consider estate planning. It’s time to create an up-to-date estate plan when you experience one of these life events.

Think estate planning isn’t for you? Think again! And it’s not just a one-time deal; changes in your life should result in changes to your plan, so be ready to make some updates.

The Richland Source notes in a recent article, titled “Do you need an estate plan?”, that it’s time to create an up-to-date estate plan when you have one of these life events:

Time to Review Your Houston Estate Plan: 4 Key Dates

Published on: June 5, 2015 | By McCulloch & Miller, PLLC

So how do you know if your estate plan is out-of-date? If your will or trust predates these four key “freshness dates,” it may be time to visit your attorney for a review.

Estate plans are not meant to be a one-time deal. If life changes – or the law changes – you need to update your plan accordingly.

The website nextavenue.org recently posted a very informative article, titled “Why Your Will May Be Out of Date,” which states that although your estate planning documents are still valid, they may no longer work the way you originally thought they would.

Crummey Trusts: Viable Tool for Houston Families?

Published on: June 1, 2015 | By McCulloch & Miller, PLLC

Actually the trusts are Crummey trusts named after one D. Clifford Crummey who won a decision in the Ninth Circuit in 1968, when I was just a high school lad. Israel and Erna Mikel were just in Tax Court showing how powerful the Crummey power can be as they used it to shelter over $1.4 million in transfers to their family trust from gift taxes. An arbitration clause that called for the use of a religious court caused the IRS to challenge the validity of the exclusions, but the Tax Court ruled in the taxpayer’s favor.

Trusts can have pretty funny names. Take the Crummey trust for example – doesn’t sound very good, does it? Who wants a “crumby” trust? Let’s explore this tool further.

A recent Forbes article, titled “Religious Arbitration Clause Does Not Hurt Million Plus Gift Tax Exclusion,” reminds us that there’s an annual exclusion from gift tax. Reminder: every year you can give the annual exclusion amount ($14,000 this year) to as many people as you want without any gift taxes or disturbing the unified credit against transfer taxes. However, to qualify for the exclusion, the gift has to be of a “present interest”.

Houston Investors Should Organize Finances for Ease in Planning

Published on: May 27, 2015 | By McCulloch & Miller, PLLC

There are several corners of your financial life that can be simplified through consolidation.

If you feel like your finances are all over the place and hard to manage, you just need to take a moment to de-clutter and get a system going. Also, it’s ok to ask for help!

A recent article in The Tahoe Daily Tribune’s, titled “Simplify your financial life,”provides some very helpful advice on de-cluttering and organizing your important information:

Inheritance: Later vs. Giving Now?

Published on: May 22, 2015 | By McCulloch & Miller, PLLC

Most of us don’t want to just enjoy our retirement and have enough money for old age, but to leave something behind as well. But what's the best way to do that? Should you leave an inheritance, or give your money away while you're still around?

Let’s take a look at the tax implications of both scenarios.

A recent MarketWatch article, titled “Why it’s better to give than to bequeath,”reminds us that with both gifts and inheritances, it’s the person giving the money who pays the tax. So, for example, if you give a gift or an inheritance to your children, they don’t pay taxes—it will be your estate that has the tax liability and must pay. However, there are huge tax differences between gifts and inheritances. The gift tax is exclusive: it’s on top of the gift.

Tips for Leaving an Inheritance for Houston Families

Published on: May 15, 2015 | By McCulloch & Miller, PLLC

Few people get excited about doing estate planning, even though they might recognize the importance of leaving a legacy for their children and grandchildren. If you want to be smart about making gifts to your loved ones, though, there are some things you should consider before just writing a check.

When leaving a legacy to your Houston heirs, you want to do it the right way. It’s always best to consult with the pros on important estate planning matters.

A recent article from The Motley Fool, titled “Thinking of Gifting an Inheritance to Your Grandchildren? Keep These 3 Things in Mind,” asks some of their experts for estate planning tips. Here are some of their answers:

Team Houston: Who Are Your Estate Planning Team Mates?

Published on: May 12, 2015 | By McCulloch & Miller, PLLC

If a Loved One or you have an estate plan, or even part of one, then some team members already are on board via the planning process and likely are actively serving or are nominated in the documents. They can have roles in the testamentary will, trusts, business purchase agreement, powers of attorney, medical directives or any of the other estate-planning instruments created during life.

Some team members are fee-based professionals, while others can be volunteers. In many instances, not all of the specialties will be required. Your estate planning team should consist of the combination of members that best suits your situation.

The Myrtle Beach (FL) Sun News recently published an article titled “Assembling your team for estate management”which reminds us that one person or a firm can serve in more than one fiduciary or team-member role.

Garden State Leads Nation in Highest Estate Tax

Published on: May 11, 2015 | By McCulloch & Miller, PLLC

Sixteen states and the District of Columbia levy an estate tax with some taking a bigger piece of your estate than others. For this reason, it is critical to understand which states are going to take more out of your beneficiaries pocket when you die. So which states are the most costly?

Does your state have a death tax? While the federal applicable exclusion is $5.43 million in 2015 or $10.86 million for a married couple, many states have much lower thresholds. This casts a much wider net—meaning there’s a better chance that your estate will be subject to state tax.

An article in The Times of Trentontitled, “N.J. ranks among worst states to die from an estate tax perspective,” points out that some states don’t index their exemption amount for inflation, which gradually increases the number of taxpayers affected.

Is Estate Tax Nearing Death Sentence?

Published on: May 5, 2015 | By McCulloch & Miller, PLLC

The House voted last week to repeal the estate tax, a longtime priority of Republicans that also spurred Democratic charges that the GOP is in the pockets of the rich. The 240-179 vote broke down largely on partisan lines, with seven Democrats voting to repeal the estate tax and three Republicans voting against it.

Senator John Thune (R-SD) introduced legislation to repeal the estate tax, but it’s uncertain when or if that proposal might get a vote. There were 54 senators who supported the estate tax repeal last month in a non-binding budget resolution vote. Nonetheless, this is six votes short of the 60 needed.

The Hill’s article, titled“House votes to repeal estate tax,” notes that a repeal of the estate tax would increase the deficit by $269 billion over the next 10 years, and the Joint Committee on Taxation projects that the estate tax will impact 5,400 estates in 2015. This is approximately 0.2% of the 2.6 million deaths expected in the U.S. this year.