Guardianship

Nevada TV Investigation Leads to Clark Co. Guardianship Reform

Published on: December 14, 2015 | By McCulloch & Miller, PLLC

Much needed changes are underway at the Clark County Nevada Guardianship program, after a local television reporter uncovered major lack of oversight, including families torn apart and financial abuse by the individuals charged with protecting the elderly. According to a follow-up report by KTNV News, "More staff means more oversight in guardianship system," some of the changes are the establishment of a hotline and the examination of all guardianship processes.

Clark County District Court will add more staff to better supervise guardianship cases in response to what they have termed a clear need for compliance oversight after the KTNV investigation showed double billing and questionable charges. They found cases where the entire life savings of vulnerable "wards" went missing and their homes were sold without court approval.

The court has hired a new Guardianship Compliance Administrator who will oversee the adult guardianship program, create a citizen complaint process, and look into any claims of discrepancy or fraud. The court is also taking action on several other issues stemming from the news investigation, including greater transparency and scrutiny of how private professional guardians handle a person's money.

Guardian Abuse is a Growing Problem

Published on: November 18, 2015 | By McCulloch & Miller, PLLC

Guardianship is a fairly straightforward and basic function. A person who is not able to handle her or his own affairs, for any number of reasons, is assigned a guardian by the court, who is to act on their behalf for financial, medical and care-taking purposes. The guardian is charged with putting the interest of their ward first, and the guardian is entrusted with a great deal of responsibility.

However, as the Wall Street Journal reports, in "Abuses Plague Guardianship Systems Across the Country," the financial abuse of elderly people by guardians is rampant throughout the United States.

Court appointed guardians with no family relationship to the elderly wards too often act in their own interests and deplete the wealth of the wards.

Is Your Estate Plan In Place?

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

Perhaps the biggest reason to have an estate plan is to decide who will raise and care for your children if you and your spouse should both pass away. An experienced estate attorney who is knowledgeable about guardian ship laws in your state can help you make a plan, as noted in Houston (MO) Herald's recently published article, "Establish an estate plan before death comes knocking."

It is easy to put off these tough decisions by thinking we have plenty of time, but the truth is that we really don't know how much time we're going to have.

It's also easy for disagreements and misunderstandings to occur when someone passes away, particularly when the ownership of assets isn't clear. A professionally drafted will and other estate planning documents can eliminate much of this stress and heartache. The cost of settling an estate may be high, but it's even higher if an estate plan isn't in place.

Estate Tax Planning Remains Important Step for Some Houstonians

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

Estate taxes are seen by some as instruments of public policy, an attempt to fight economic inequality by diminishing the ability of wealthy families to aggregate vast amounts of wealth. Others see estate taxes as a “death tax” that penalizes those who are financially successful. Whatever your opinion, estate tax rates are still quite high compared to other taxes. This creates an incentive to plan in advance and use sophisticated methods to reduce estates taxes.

Thirteen different brackets might make you think that estate tax planning is all about college basketball! According to a Fox Business article, “2015 Estate Tax Rates: How Much Will You Pay?” the rate structure for the estate tax has remained virtually unchanged since 2013, even with these numerous brackets. See the chart below for a birds-eye-view of the 13 different brackets:

Amount of Taxable Estate	Tax Bracket
$0-$10,000	18%
$10,001-$20,000	20%
$20,001-$40,000	22%
$40,001-$60,000	24%
$60,001-$80,000	26%
$80,001-$100,000	28%
$100,001-$150,000	30%
$150,001-$250,000	32%
$250,001-$500,000	34%
$500,001-$750,000	37%
$750,001-$1 million	39%
Over $1 million	40%

Source: IRS

Before you do any number crunching, remember that the federal government has an estate tax exemption for all estates more than $5.43 million (in 2015). The “lifetime exemption amount” is the cut-off mark for how much wealth each person can pass to their heirs without owing any estate tax.

The article explains that the exemption is different than a standard deduction. What you do is look at all your taxable estate assets and knock out the first $5.43 million. If you have more than that, the estate tax will be at the maximum rate of 40 percent on the portion of the estate that’s above the $5.43 million threshold. For instance, if your estate is $5.44 million, then your estate's tax liability would be $4,000 — which is 40 percent of the $10,000 above the $5.43 million threshold.

An estate planning attorney can help you with some ways to reduce or even eliminate your estate tax liability. This can include gifts during your lifetime to reduce your estate assets at your death. The law says that you can give an individual up to $14,000 annually without having to pay any gift tax. If you give more than that amount, you'll start using up your lifetime exemption. You don’t want that!

There are also many more-complicated methods of giving money to potential heirs during your lifetime that can reduce your eventual estate tax bill. Talk with your estate planning attorney about these more complex strategies and leave more money for your heirs and less for taxes.

For additional information on estate tax planning and elder law topics in Houston, please click here to visit my website.

Reference: Fox Business (July 16, 2015) “2015 Estate Tax Rates: How Much Will You Pay?”

Estate Planning Alzheimer’s Disease Patients

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

When a loved one has Alzheimer’s, advanced planning for legal and financial matters becomes even more important than in day-to-day estate planning. Ideally, planning well in advance, before the disease has taken a toll on the person’s cognitive abilities, may give them an opportunity to express their wishes for their care. The debilitating nature of Alzheimer’s and other forms of dementia is extremely stressful for family members who are charged with being caregivers and decision makers. Planning early with the help of an experienced professional can alleviate some of the stress that results.

Caring for a loved one with Alzheimer’s or a different type of dementia is a challenge that requires a great deal of planning in advance. An article in The Lincoln (NE) Journal Staraddressed a number of financial, legal and medical care issues – “Planning the future of a loved one with dementia.”

You will encounter a number of costs in caring for a person with dementia. Planning for these expenses and costs throughout the course of the disease will involve examining all the costs you could possibly face now and in the future. These can include prescription drugs, personal care supplies, adult day care services, in-home care services, and residential care services.

Two Key Documents for Houston Estate Planning

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

When a man who had remarried passed away, his children were less upset about his leaving everything to their stepmother as they were about her decision to liquidate the family home and furnishings. Rather than give them an opportunity to enjoy things that had special meaning to the children, she took the position that they could come to the auction and bid on the items, just like anyone else who attended the auction. The heartbreak and hard feelings that resulted could have been prevented with the use of two documents: a Letter of Instruction and a Personal Property Memorandum.

While it seems that listing out personal assets like jewelry, books, photo albums and home furnishings might be tedious and not really necessary, a recent article in Forbes, “Simple Steps To Prevent Future Family Inheritance Rifts,” points the way to using two documents that can ensure that your personal property goes where you want it to go, and also saves your heirs from losing personal items that may hold a great deal of meaning to them.

A Personal Property Memorandum is a legally binding document. It is to be referred to in the will that is to list all the personal property you want to leave to your heirs and loved ones. A personal property memorandum is recognized in 30 states and must be referred to in the will. But the document doesn’t need to be notarized or witnessed. The article suggests that you clearly describe these items so they aren’t confused with others. For example, “All of the Barry Manilow LPs in my collection are to go to Cousin Buddy.” Make sure your executor or executrix has the correct information, as well. You don’t want the wrong relative to walk off with your disco records!

Having THAT Conversation with Your Houston Heirs

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

While some estate planning is better than none, most Americans don't speak with their heirs about basic issues – like where the wills can be found – and most wills are not updated. A recent study from the Center on Wealth and Philanthropy at Boston College, estimates that between 2007 and 2061, as much $59 trillion will be transferred from 93.6 million American estates. The numbers are clear, but little else is. How assets are being distributed, what plans are in place for potential beneficiaries and other critical issues are murky at best, and in most cases, completely undefined.

If you've got heirs, you may want to do something few Americans do – tell them where your will can be found, and discuss your intentions for your estate. These two conversations would put you miles above what happens to most heirs – according to "5 Biggest Estate Planning Mistakes You Can Make," seen in The Street. According to a caring.com survey of adult children more than half (56 percent) of U.S. parents have a will or living trust document in place while nearly one-third of parents (27 percent) don't have estate documents in place; and 16 percent of adult children have no idea about what's in their parents' estate plans. Looks like we are setting up for a generational scavenger hunt – even when parents have an estate plan in place, most adult children don't know where the documents are located (52 percent.) Even worse, 58 percent don't know what the estate planning documents say!

The article cautions that even when you have a will or a trust, there's no absolute guarantee that your assets will be distributed without a hitch. Wills and trusts have kept families in litigation and at odds with each other for years if the estate plan isn't administered properly. To make things easier for your family and make sure your wishes are carried out properly after you pass, try to steer clear of these monstrous errors:

Hard-to-Value Houston Estates Can Be Tax Concern

Published on: July 20, 2015 | By McCulloch & Miller, PLLC

The Internal Revenue Service has won a settlement of $388 million from the estate of Detroit Pistons owner Bill Davidson. According to the IRS, the estate owned more than $2 billion in additional taxes. To gain some perspective: in 2013, the US Treasury took in a total of $12.7 billion in estate tax revenue. Davidson, who made his fortune in glass and auto products, was best known to the public as the team owner of the Pistons, the W.N.B.A.'s Detroit Shock and the N.H.L. Tampa Bay Lightning.

In an article that appeared in Forbes, "IRS Grabs $388 Million From Billionaire Davidson Estate," the case against Davidson's estate is explained in detail. Two years ago, Davidson's estate filed a matter with the U.S. tax court that challenged the agency's assessment of additional taxes. They claimed that the estate owed $187 million in gift taxes, $152 million in estate taxes, and $49 million in generation-skipping taxes, plus a $133,000 gift tax penalty bill.

Two problems factored into to these deficiencies. The IRS claims that the Davidson estate undervalued some corporate stock and improperly valued the self-cancelling installment notes (SCINs). The IRS said that the estate also underestimated the value of privately held stock held in trust for Davidson's children and grandchildren.

Don’t Let Texas Decide What Happens to Your Houston Assets

Published on: July 14, 2015 | By McCulloch & Miller, PLLC

Drafting your will and testament is not exactly on most summer to-do lists. For many, the process is a memento mori, a task more foreboding than mowing the overgrown lawn. It's no surprise that according to the American Bar Association, 55 percent of Americans do not have a will or other estate plan in place when they die. And for families, the statistics are not much better, according to a survey done by the online legal service Rocket Lawyer. The firm found over half of Americans with children did not have a will in 2014. The reason most Americans said they didn't have a will, according to the survey: "They just haven't gotten around to making one."

The Denver Post says that the consequence of having no will is there's no guarantee who’s going to get your assets. The article, “How estate plans protect family assets far better than a will,”also says that you can be placing your children at risk. They could end up in Child Protective Services or in the custody of someone you wouldn’t dream of parenting your kids.

"If you don't have an estate plan, you have a 'plan' written by the state," the article states. This means you're relying on the state to decide what happens with your kids and your assets. It means that your family will be required to go through the courts, and probate may take months or even years, according to the American Bar Association. Most states have waiting periods for creditors to respond, during which time the probate estate can’t be distributed—and that's only if an individual's affairs are in order. Anything hairy means delays and more work.

How to Determine Your Trustee?

Published on: July 7, 2015 | By McCulloch & Miller, PLLC

Many people set up trusts to help provide for loved ones and favorite causes after they pass away. A trust can help manage the wealth you wish to transfer and ensures the efficient distribution of assets—such as property or a sum of money—over a set period of time. Yet a trust is only as strong as the trustee overseeing it.

A trustee is the individual or company that administers a trust for the benefit of named beneficiaries. Duties can range widely and may include paying bills and taxes, and managing property and investments.

Forbes recently had a nice article about this titled “How To Choose The Right Trustee For Your Estate.” Most importantly, the article says a trustee “has a legal fiduciary duty to manage a trust on a beneficiary’s behalf,” by always acting in the beneficiary’s best interests, as outlined by the trust.