Houston Estate Planning

New Life Event? Review Your Houston Estate Plan

Published on: February 22, 2016 | By McCulloch & Miller, PLLC

From the following Forbes article, "8 Reasons to Revise Your Estate Plan Today," we learn that 51% of Americans age 55 – 64 don't have a Will. That's bad news for their families, who will have to deal with the estate plan default: whatever the rules are for their state. But for those who are smart enough to have an estate plan in place, there are still some maintenance issues that need to be addressed with a review every now and then. Everything changes over time, including your personal and financial situations and tax and estate planning laws.

Even if your estate plan was crafted by a skilled and experienced estate planning attorney, you'll want to talk to him or her if any of these things occur:

Marriage or Re-marriage. This doesn't automatically change the provisions of your will or trust and won't necessarily provide for your new spouse. Talk with your attorney to ensure your plan reflects your new goals, both individually and as a couple.

Executor Fees Can be Complicated if Will Does Not Specify Details

Published on: February 17, 2016 | By McCulloch & Miller, PLLC

A jumbo sized battle in a high profile and seemingly never-ending estate matter highlights what may appear to be a minor detail in estate planning but what is in fact an important consideration: the executor fee.

According to a recent Wall Street Journal article, "Battle Involving Leona Helmsley Estate Spotlights Issue of Executor Pay," the New York attorney general has challenged the proposed fee on the estate of real estate mogul Leona Helmsley. The $100 million sought by the executors, including two of Helmsley's grandchildren, is "astronomical" and should be reduced by 90%, the state Attorney General Eric Schneiderman said.

An issue in this case is that the will does not specify how the executor fees should be calculated, while ruling out the use of a fee schedule in state law, according to the attorney general's filing.

California Legislators Provide Shortcut Law to Help Senior Homeowners

Published on: February 12, 2016 | By McCulloch & Miller, PLLC

Written by Assemblyman Mike Gatto (D-Glendale), a new law, AB 139, is unlike most of the over-reaching and bombastic legislation that originates in the State Capital. As reported in The San Diego Times-Union, "State ushers in refreshingly modest law," this new law makes one aspect of estate planning easier for California homeowners.

The measure, which passed unanimously in both the Assembly and the Senate, creates "a new, non-probate method for conveying real property upon death through a revocable transfer upon death deed." It's a simple way for people to transfer their home (or one-to-four-unit investment properties) upon their death – without having to pay for a living trust or having it all sorted out in probate court.

California had provided simple "payable upon death" forms for many valuable items, such as automobiles and stock accounts, but not for real property. Creating a trust has many advantages, but legislators realized that without a trust, the estate would be handled in a potentially lengthy probate process.

Houston Business Owners. What’s Your Plan?

Published on: February 11, 2016 | By McCulloch & Miller, PLLC

If you think of your business as a legacy that you wish to pass on to a family member, a partner or a valued employee, start planning now to create a business succession plan. Don't limit your thinking to a family member taking over for you. There are many different ways that small businesses continue after the owner has passed control of the company, but all require advance planning.

Interestingly, business.com's recent post, "The Show Must Go On: The Importance of Business Succession Planning," explains that there are some key underlying factors that determine whether a business succession plan is necessary. In some instances, it's easiest just to sell the business entirely, but other times there are partners who may want the business to continue operating after the founder is no longer involved. After determining if the business has the potential for long-term viability, an owner should have a succession plan that includes selecting a successor and getting the business appraised.

Selecting a Successor

Houston Boomers. Redefining Inheritance?

Published on: February 10, 2016 | By McCulloch & Miller, PLLC

The same generation that redefined American culture is making changes to the concept of inheritance as well. A recent article in Forbes, "How Boomer Parents Feel About Leaving Inheritances," looked at two studies concerning inheritances to find that Baby Boomers are of two minds when it comes to leaving inheritances to their children. Some have no intention of leaving anything behind. They don't lack for generosity; they just have a different way to share. Others are planning on leaving assets to their offspring, but are not sure that their heirs will be able to manage an inheritance wisely.

The Hearts & Wallets report, Funding Life After Work: Impact of Parenthood & Wealth Transfer on Retirement Solutions for Baby Boomers, reveals that roughly 40% of those surveyed plan to leave inheritances. About 30% expect to spend all their money, and the other 30% aren't sure. There's one item that the majority of the parents had in common: they're afraid of running out of money. And those who plan to leave inheritances are extremely terrified of running out of money!

Interestingly, ultra-wealthy parents appear to be more apt to give their kids inheritances, according to a US Trust survey of high net worth individuals with at least $3 million in investable assets. Some 57% of the respondents think it's important to leave a financial inheritance to the next generation—which is somewhat less than the 66% of Gen X'ers and 74% of Millennials who felt this way. However, only 27% of the parents surveyed have told their children how much they are likely to inherit. One reason for this is that only 20% strongly agreed that their children will be prepared to handle the wealth they'll receive.

Divorced? Who’s Your Beneficiary Designation?

Published on: February 8, 2016 | By McCulloch & Miller, PLLC

Updating beneficiary designations is usually the simplest part of estate planning, but it's also the most likely part of estate planning to be overlooked. You have beneficiaries on pretty much every account, from 401(k)s to life insurance policies. Do you know who your beneficiaries are?

USA Today says that it's not just because many of us have the majority of our assets tied up in products like these. The article, "Your ex could get rich if you don't update your beneficiaries," explains that it's also because beneficiary designations on a 401(k) or IRA are legally binding and often take precedent over anything in your will. This can lead to some serious unpleasantries if your beneficiary information isn't updated.

Many times a person who has worked at the same company for 20 years has a beneficiary designation that they set up on their first day of work, and they never think about it again. However, their lives are rarely the same fifteen or twenty years down the line. For example, they might be divorced and remarried, or they might have children or grandchildren who weren't even a twinkle in someone's eyes way back then. Leaving an estate to an ex-spouse or disinheriting your own children is not a rare event when people don't update their beneficiary designations.

We Lost Mom’s Will! What are Options?

Published on: February 2, 2016 | By McCulloch & Miller, PLLC

What steps can you take when a parent passes away without sharing the location of a will or telling you who the attorney was who drafted and executed the will? What if you can't find any copies in what seem like reasonable hiding places in Houston?

The article, "What steps to take when you lose a will," from New Jersey 101.5 says there are plenty of clues you can use to track this down.

If your mom has passed away, first be certain that a will hasn't already been probated. Contact the probate court in the county where your mother lived at the time of her death. These records are public.

Can Houston Families Create Fair Estate Plans for Kids?

Published on: January 20, 2016 | By McCulloch & Miller, PLLC

Should you cut the pie in equal portions? If you are preparing an estate plan and want to make sure that every one of your children receives the exact same amount of your assets because that's fair, you may want to reconsider. A post from New Jersey 101.5, "Being fair in estate planning," discusses the differences that take place during child rearing and even early adulthood that may redefine what you think of as fair.

While there's no easy answer to the question of what is fair, treating the children equally can be fair. But so can unequal treatment.

Let's look at how a parent treats a minor or young adult child. There are times when a parent simply needs to spend more on one child. The reason may be apparent—for instance, if one child has a disability or serious illness. But it can be more muddied when one child participated in costlier school-age activities, went to a more expensive college, or planned a more expensive wedding than the other kids. Even so, provided each child was given equal opportunities, the unequal financial support may not be a problem. Nonetheless, some parents believe that it's important to keep everything as equal as possible.

Don’t be a Phool About Money!

Published on: January 13, 2016 | By McCulloch & Miller, PLLC

Expect to see the word "phool" a lot in 2016 if a book by Nobel Economics Prize winners George Akerlof and Robert Shiller, "Phising for Phools," becomes a runaway hit this year. The two coined the phrase to describe a person who gets caught in a "phishing" scam, which covers a wide variety of financial scams. Save yourself by being smart enough to know what you don't know so you can focus on making money and building up your retirement nest egg.

The recent Forbes article, "One Powerful Money-Making Move for 2016," explains that most of us believe we know what's good for us, but when it comes to money we shoot ourselves in the foot—and wallet!

The root of phoolish behavior, Akerlof and Shiller say, is the self-conceit that you think you know more than all of the smart people who are trying to take your money every day. Can you compete with computers and sophisticated programs that take advantage of pricing glitches and make trades in milliseconds, as well as robots who move at the speed of light?

Everyone Needs to Make Time for Estate Planning

Published on: January 1, 2016 | By McCulloch & Miller, PLLC

The only way to make sure that your wishes are carried out after your death is to have the proper estate planning documents prepared in advance, according to a post from WMUR.com, "Money Matters: Common estate planning mistakes." Some people make the mistake of thinking that estate planning will be extremely complicated, while others think it will be far simpler than it ever could be. While every situation is different, there are a number of mistakes that are common at every income and asset level.

Failing to plan. Many of us don't have a will—but like it or not you do have an estate plan. The plan is called the law of your state and the probate judge. If you die without a will, your estate will be divided according to intestacy laws. In that case, there's no guarantee this will be what you wanted. A one-page will or a more complex plan with other strategies like a trust can help reduce estate taxes, save on administrative costs, and put you in the driver's seat when deciding how your assets are to be distributed to your heirs, charities, or to help a family member with special needs. Another important point: in many states a will is the only way that you can name a guardian for your minor children. So, if you move from one state to another, be sure to check local laws.

Failing to maximize your marital estate exemption. The new portability law provisions ease some of the estate tax planning burden by allowing each individual a $5.43 million federal estate tax exemption in 2015. If one spouse dies without using up his or her $5.43 million, the unused portion may be transferred to the other spouse for use at the survivor's death (hence the term "portable."). You should also remember to investigate any state estate taxes when reviewing your strategy and make certain to discuss how portability is elected with your attorney.