Estate Tax

Retirement and Estate Planning: Tax Codes Kinder to Married Couples

Published on: April 30, 2015 | By McCulloch & Miller, PLLC

Although some couples remain unmarried to protect their estates, that strategy backfires if you end up paying estate taxes. If you choose not to marry, you and your partner need to educate yourselves on your estate planning and retirement options.

If you’re married, you’re able to inherit an unlimited amount of assets from your spouse—without paying any state or federal estate taxes. In addition, you’re permitted to give an unlimited amount of assets to your spouse while you’re alive without filing a gift-tax return.

This exemption doesn’t extend to unmarried couples. Estates of up to $5.43 million are exempt from federal estate taxes. Some states, however, have lower thresholds for their estate or inheritance taxes.

Caution: Possible Estate Planning Mistakes!

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

"The costliest errors are ones we make ourselves, often without realizing how much damage we're doing."

"Estate planning is intertwined with the financial plan," a newsmax.com article explained, and it’s no secret that many individuals fail to prepare for retirement. When doing an estate plan, the article offers some sound advice:

Make sure an estate planning attorney examines every major financial document;

Are Houston Boomers Neglecting Their Estate Planning?

Published on: April 28, 2015 | By McCulloch & Miller, PLLC

"If you are looking at Baby Boomers, they are looking at what their cash flow will be in retirement," says Carol Kroch, managing director, wealth and philanthropic planning at Wilmington Trust in Wilmington, Del. "Can they do the things they want to do? Can they retire? Can they keep the house? They are not focused on death."

Failure to consider wills and estate planning is a frequent issue, and not just for Houston Boomers. Seniors usually think that it’s something they can put off and deal with later.

USA Today recently published an article, titled “Big retirement mistake: Boomers with no estate plan,”that offers several tips for people who might be lagging behind in their retirement savings. The article emphasizes that there are three very important things to think about when you start your estate planning (this week!):

Retirement Planning Mishaps Can Impact Houston Seniors

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

Here are a few of the most common mistakes we’ve seen seniors make in regard to their retirement planning.

Sometimes knowing what NOT to do is just as important as knowing what to do. So it is with retirement planning.

Physician’s Money Digest lists some of the most common mistakes that the authors have seen seniors make in a recent article titled “Top Mistakes Seniors Make”:

Does Your Houston Estate Plan Need a Charitable Remainder Trust?

Published on: April 24, 2015 | By McCulloch & Miller, PLLC

When Detroit businessman Dick E. Morand died in 1977, he ensured that his estate would continue giving for decades after his death via a charitable remainder trust.

Morand died at the age of 87. He was founder and owner of D.E. Machinery Company and was vice president of Addy-Morand Machinery Company. His wife, Helen, died in 1976 and the couple had no children. Now, five Metro Detroit nonprofits are benefiting from Morand’s trust.

Morand’s trust is really the gift that keeps on giving.

Retirement Planning Issues for Small Business Owners

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

Now is the time for small business owners to evaluate their year-end retirement planning while building a retirement budget line item for next year.

A recent article in The (Great Falls MT) Prairie Star, titled “Review estate, tax and retirement planning issues now,” argues that a farm or ranch operation should include retirement savings for the owner and/or employees as a part of annual budgeting. These retirement funds provide tax savings now and may provide liquidity and income when the decisions for retirement and/or farm transition take place.

Small businesses, including self-employed taxpayers, have two choices after the end of the year to establish and contribute to a retirement plan. These two choices are the Simplified Employee Pension (SEP) plan and the individual retirement arrangement (IRA). A taxpayer has until the due date of the business federal tax return (including extensions) to set up and fund a SEP, but IRAs can’t be funded after the due date of the taxpayer’s personal federal income tax return.

Death and Debts: What Can You Do?

Published on: April 21, 2015 | By McCulloch & Miller, PLLC

Sometimes, a loved one’s estate may include debt. Do you know what to do should if you are the spouse or heir that inherits debt?

If you aren’t sure what to do with a loved one’s debts after they pass – or what to tell others to do with your own debts – you may want to read a recent article in The Huffington Post titled “Debt and the Deceased: How Should Spouses and Heirs Proceed?”

Be honest about your financial situation. It’s not that easy for some family members to discuss debt issues, especially older Americans who hoped for better at the end of their lives. Even so, parents and their adult children or spouses should thoroughly talk about any outstanding debts that could affect the borrower's estate.

Divorcing? Re-Visit the Details of Your Houston Estate Plan

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

Once you're divorced you should immediately create a new estate plan — a will or revocable living trust, a healthcare power of attorney, and a living will ("pull the plug") designee. Read on for more estate planning must-do’s regarding divorce.

A recent article in the The Huffington Post, titled “Divorce and Money,”says that you should always listen to your attorney about the applicable laws in your state regarding divorce and your estate. In addition, the article says that you should also look at the following issues.

The division of property in a divorce is typically not taxable to either party. However, if instead of dividing marital property, one spouse agrees to monthly maintenance (alimony), this will be taxed as ordinary income. And it’s deductible to the paying spouse. The original article also notes that the spouse receiving the maintenance checks must make a quarterly estimated federal and state tax payment, so you need to plan accordingly.

Houston Families Can Explore Advantages of Charitable Giving

Published on: March 31, 2015 | By McCulloch & Miller, PLLC

Lifetime gifts may carry considerable advantages over charitable bequests, according to Atlantic Trust, the U.S. private wealth management division of CIBC (NYSE: CM) (TSX: CM).

Lifetime gifting allows you to see your donation make a difference. In addition to this giving advantage, there’s also the goals of receiving an income tax deduction or estate tax savings, explains the PR Newswire article titled “Benefits of lifetime charitable gifts can outweigh bequests.”

For instance, individuals who give cash to public charity typically are entitled to an income tax deduction of up to 50 percent of their adjusted gross income (AGI) or up to 30 percent of their AGI for donations of other appreciated assets that are held for at least a year. What’s more, these deductions can be carried forward for up to five years if they can’t be taken in the year the gift was made.

Should a Trust Last 360 Years? Several Mississippians Think So

Published on: March 30, 2015 | By McCulloch & Miller, PLLC

Legislation allowing Mississippians to place their assets in a trust for up to 360 years passed the state House and is now pending before Gov. Phil Bryant.

How long should a trust really last?

According to the Northeast Mississippi Daily Journal, Mississippi’s House Judiciary Chair Mark Barker said many states were passing laws allowing for the establishments of trusts for 360 years or longer. He also commented that this is actually the process already since there are loopholes in the existing state rules against perpetuities.