Houston Inheritance

Does Your Houston Home Have a Mortgage? Estate Planning Considerations

Published on: April 29, 2016 | By McCulloch & Miller, PLLC

The moment you close on your home, you should make sure that your heirs will not be stuck with a no-win situation that leads to a home being abandoned, according to "What Happens When a Homeowner Dies before the Mortgage Is Paid?" in The Wall Street Journal. It may not be the first thing on your mind when you take possession of the house, but it should be dealt with as soon as possible.

The mortgage is secured by the house. Nonpayment can't damage an heir's credit score unless he or she is a co-signer on the mortgage. Nonetheless, they should keep paying on the mortgage if possible because missed payments could incur penalties and lead to foreclosure.

Lenders who are notified of the borrower's death right away are usually understanding about resolving estate issues to avoid foreclosure.

Planning Tips for Houston’s Single Parents

Published on: April 28, 2016 | By McCulloch & Miller, PLLC

Frankly, there is less room for error when a single parent is managing all of the responsibilities of raising a family. Five key planning guidelines are the focus of the Parent Herald's article "5 Financial Planning Tips For Single Parents For Your Family's Protection."

Here are the top five most important tips:

Create a safety net. Most important is to have sufficient emergency funds that can be your financial safety net. Single parents should save at least six months' worth of expenses in an account that's untouched until an emergency occurs.

How to Talk To Your Houston Parent About Their Will

Published on: April 25, 2016 | By McCulloch & Miller, PLLC

The natural tendency, according to "How to handle a parent not having a will" in New Jersey 101.5, is to postpone the preparation of a will after a husband or wife has passed. Grieving a loved partner is difficult and painful. The last thing they may want to do is get involved with their own will.

Also, if Dad has recently passed away, Mom may be hearing a different message in between the lines: "You're gonna die soon, so please leave me an appropriate share." This makes matters even harder. And talk of drafting a will may bring back painful emotions linked to the father's death. These feelings are to be expected.

But instead of the children pressuring Mom, they should point out some of the benefits a will can provide, such as how a will allows her to specify how her assets will be transferred at her death. This can include making bequests of family heirlooms to specific people or include charitable contributions. If there's no will, Mom won't have any control. Her assets will pass according to the intestate laws of the state.

What To Do If Additional Assets Discovered After Estate Taxes Have Been Filed

Published on: April 21, 2016 | By McCulloch & Miller, PLLC

Here's an ethical dilemma. You learn that your late mother had a safe with $100,000 cash in it after the estate has been finalized. Do you pocket the cash and tell no one, or add it to her assets? The temptation is obvious, but the right and legal thing to do is correct the error.

New Jersey 101.5 says in its recent article, "Why it's important for executors to report all estate assets," that the executor of an estate must prepare and file the necessary returns. In doing this, he or she has to collect, value and report all of the assets of the estate.

If a failure to include the cash in the inventory of the estate assets keeps the estate below the reporting threshold and no return was filed, the unpaid tax on the cash will accrue interest. Plus, the estate and executor may be subject to penalties for nonpayment, as well as facing civil and criminal penalties if this failure to file is deemed fraudulent.

Protect Your Houston Business with Estate Planning

Published on: April 19, 2016 | By McCulloch & Miller, PLLC

It's amazing how quickly a business can get picked to pieces after the death of an owner. With the use of good estate planning, according to The Huffington Post article, "5 Things Estate Planning Can Do for You and Your Business," you can protect your business and your legacy. Otherwise, your business is at the mercy of government taxes, co-owners and even family members who will stake their claims.

Use estate planning to avoid unfortunate events and to prevent seizure and depreciation of the business assets. This can decrease the stress and hassles that occur immediately after you die. Here are some good estate planning ideas to help protect your business.

More options for your business. Solid estate planning gives you the option of buy-sell agreement. If your business has one or more co-owners, this agreement ensures that upon the death of any owner, the interest of the deceased is automatically purchased by the other owner(s). The beneficiaries of the deceased owner, such as the spouse, children, or other family member won't unintentionally become owners. This strategy can alleviate some stress in an already stressful situation, immediately after the death of an owner or part owner of a business.

Estate Planning: Preventative Therapy for Houston Family Members?

Published on: April 15, 2016 | By McCulloch & Miller, PLLC

Something happens when money and possessions are involved, putting even the best of family relationships at risk, according to "Keeping the Peace Between Adult Children in Estate Planning" from The Huffington Post. The best strategy is advance planning and lots of candid discussions.

Although American retirees have been ranked high as some of the most generous in the world in terms of amount of assets passed to family members, a new retirement trend has emerged. About 43% of U.S. retirees now say they continue to provide regular financial support to at least one other person, with 10% saying they were supporting at least one adult child. These changing demands on the resources of some retirees shows that inheritance planning may become a bit more complex in some families. This could mean added stress between aging parents and adult children.

You need to remember that your financial well-being needs to be the priority. Make sure that your estate plan is updated to fully coordinate with your complete financial picture. This should be adjusted when significant life changes happen or if there is a major shift in assets—like when a child needs help. For some families, dividing up assets fairly equally among adult children is not a problem. But when it's not fair for everyone involved, it can be tougher. Varying situations for each child might mean it won't be an even split.

Spring Cleaning? Don’t Forget Your Houston Estate Plan

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

Throw open your windows, put the screens back in and get ready for more outdoor time, whether that means gardening or walks in the park. While you are at it, refresh your estate plan. If it has been three years or more since you last had it reviewed, it is time. This is especially true if your family has experienced any life changes, like marriages, births, deaths or divorce.

Many folks think they don't need estate planning because they don't have enough money for that, or they own everything jointly, says a recent article from CBS Boston, "Spring Cleaning: Estate Planning."

So why bother with a will? What happens when you both die? What if you have kids? Who is going to care for them if you pass away? Do you have things that you would want friends or family to have?

What Houston Surviving Spouses Need to Know About Inherited IRAs

Published on: April 5, 2016 | By McCulloch & Miller, PLLC

Perhaps the most important thing to do when you inherit an IRA is your homework. Start by finding out exactly the type of IRA you have inherited, and then find out what kind of beneficiary you are. USA Today's article, "If you inherit an IRA, make a plan before doing a thing," starts with the premise that the person inheriting the IRA is a surviving spouse, and outlines four options.

Roll the inherited IRA assets into your own IRA. This has several advantages. The beneficiary can postpone required minimum distributions (RMDs) until age 70 ½, and beneficiaries can use their own life expectancy to calculate RMDs. Plus it's pretty easy. You don't have to keep both an inherited IRA and your own IRA, they can be combined, but the disadvantage is that the beneficiary will (with a few exceptions) have to pay a 10% penalty tax on pre-59 ½ distributions, and RMDs could be accelerated if the deceased spouse was younger than the surviving spouse.
Transfer assets into a properly-titled inherited IRA. There are a few advantages to this. For starters, the spouse beneficiary won't have to pay the 10% penalty tax when taking withdrawals from an inherited IRA prior to age 59 ½. Also, you may be able to delay RMDs if the deceased spouse was younger. However, this is pretty complex. The beneficiary will have to keep their own retirement accounts separate from their inherited IRA.

Houston’s Family-Owned Businesses Need Succession Planning

Published on: April 4, 2016 | By McCulloch & Miller, PLLC

Estate planning for the owner of a family business is more complex and requires more thought than estate planning for an employee who owns a home and investment accounts. In "Five things you should know about estate planning for a family-owned business," Smart Business points out, in five broad strokes, key aspects that need to be considered when making an estate plan for the business owner that include protecting the business and family members.

Identify and prepare your successors. Smaller businesses may need someone to oversee a sale or liquidation. Communication with and buy-in by your team is critical. The group should have a clear understanding of your goals, what's intended and how to achieve it, way before the time comes.

Look at your liquidity needs. Business owners are often highly illiquid because of business value compared to other assets. Liquidity in your estate is important to provide for your family and replace your earnings. If estate tax is owed, your estate will need liquidity to pay those taxes or else face a forced sale of the business. Life insurance may be a good solution, with the structuring of life insurance policies through irrevocable trusts. The business itself could have a policy on you to help pay down debt, provide working capital, or replace your on-going contributions.

Estate Planning is the Perfect Gift for Your Houston Family

Published on: March 31, 2016 | By McCulloch & Miller, PLLC

In the absence of proper estate planning, medical care decisions can be delayed and families may face expensive and unnecessary costs. Think of your estate planning as a gift you can provide for your loved ones that will let them know you were thinking of them after you have passed. Grief is a painful process, even when loved ones have a long and full life. You can make it easier or harder for those you leave behind.

Make sure to state your wishes in the proper estate-planning documents. To complete these, consult with an estate planning attorney and keep the originals in a safe deposit box with a copy at home or on your computer. Some folk have their attorney hang on to the originals.

Nerd Wallet's article, "10 Keys to Proper Estate Planning," reminds us of the four key legal documents you should have in place, plus an additional one you might want to consider.