Inheritance

Financial Planning Has Four Seasons In Houston

Published on: October 1, 2014 | By McCulloch & Miller, PLLC

Below are key financial planning tips to guide you through the four seasons of your financial life.

With summer ending and fall around the corner, the changing of seasons is almost upon us. Just as the seasons change with each passing year, your financial seasons change as well.

An article titled "The four seasons of financial planning," as recently published in the Las Vegas Review Journal, explained the four “financial seasons” of life, which can help you see where you are now and what you need to do in the future. Understanding the change of seasons and how to handle your money will ultimately determine if you are successful in attaining or exceeding your long-term financial goals.

Worried About Estate Taxes? Don’t Die in These States Next Year!

Published on: September 29, 2014 | By McCulloch & Miller, PLLC

Moving to New York to avoid state death taxes? “When your bordering state is telling you, ‘Come on over!’ the pitch is compelling,” McManus says. “If New York has a more welcoming tax scheme, then people will say, ‘Let’s call me a New York resident.’” McManus says that he and his wife might make the New York move in retirement themselves; they already have a place in the West Village they rent out for now.

Would your state's death tax prompt you to move to another state? You wouldn't be the first to consider relocation.

The number of death tax jurisdictions is 19 states plus D.C. at present. However, there are several states making changes for 2015. These states are lessening the death tax liability by increasing the exemption dollar threshold, figuring in inflation, and eliminating “cliff” provisions that tax the first dollar of an estate.

Advantages of 529 Plans for Houston Investors

Published on: September 26, 2014 | By McCulloch & Miller, PLLC

Even though many gifts no longer make tax sense, 529 plans remain viable options for both estate tax exclusion and income tax reduction, without much complexity and cost.

Which gifts make sense for taxes these days? Consider your options.

Before recent changes to the federal estate tax exemption amount (i.e., $5 million per taxpayer, as indexed for inflation), taxpayers were encouraged to make lifetime gifts to reduce their federal estate tax. This was especially the case when the exemption was $1 million per taxpayer with top 55% rate on any amount over that. Now, however, the common advice is for all but the über wealthy to retain their assets to ensure there is enough to live on during their lifetime. According to a recent National Law Review article, titled "529 Plans: Estate Tax and Income Tax Advantages," a second benefit of passing assets at death is that the recipient of the assets obtains a "step up" in the assets' basis to fair market value—avoiding income tax on the sale.

A Will May Not Cover Every Aspect of Your Houston Estate Planning

Published on: September 25, 2014 | By McCulloch & Miller, PLLC

Wills, health care directives, lists of passwords to online accounts. By now, most people know they should prepare these items — even if they haven’t yet — and make them available to trusted family members before the unthinkable, yet inevitable, happens.

While getting estate planning items in order is more urgent for seniors, everyone should do this.

A recent article in The New York Times, titled"There’s More to Estate Planning Than Just the Will,"chronicles the experience of Erik A. Dewey, a writer from Tulsa, Okla., who was tasked with sorting through piles of paper and online information when his father died at age 65—just a week from retirement. Dewey compiled everything he learned from the experience into “The Big Book of Everything.” Here are some of the most basic items.

An Introduction to Retirement Planning for Houston Families

Published on: September 24, 2014 | By McCulloch & Miller, PLLC

Schwab-Pomerantz and Cuthbertson, who is publishing director at Schwab, have put together a comprehensive guide that will help you plan for retirement.

If you need to plan for your retirement, you may feel overwhelmed to even start the process. What steps do you need to take first? What type of planning is recommended for your age and stage of life?

A recent article in The Washington Post, titled "Headache-free retirement planning," considered “The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions” by Carrie Schwab-Pomerantz with Joanne Cuthbertson.

Houston’s Billionaire, Bunny and Big Court Battle

Published on: September 22, 2014 | By McCulloch & Miller, PLLC

After nearly 20 years of litigation and fighting in the press, the conflict between the estates of Anna Nicole Smith and her billionaire husband J. Howard Marshall has been resolved.

A celebrity estate battle that held center state in Houston gives us another valuable estate planning lesson. A recent WealthManagement.com article, titled "Anna Nicole Smith’s Estate Runs Out of Options," illustrates the critical importance of creating estate planning documents that have as much detail as possible.

Anna Nicole Smith was a famous Guess Jeans model and Playboy Playmate. She married J. Howard Marshall in 1994, after meeting in the Texas strip club where Smith worked. Smith was 26, and he was 89. Marshall died 14 months later and left his entire $1.6 billion estate to his son, Pierce. Anna Nicole received nothing.

Houston Home Owners: Make Note of New Reverse Mortgage Rules

Published on: September 19, 2014 | By McCulloch & Miller, PLLC

In a decision issued September 30, 2013, the U.S. District Court for the District of Columbia agreed with AARP and told HUD to find a way to shield surviving spouses from foreclosure and eviction.

A recent Elder Law Answers article, titled "Feds Move to Protect Some Surviving Spouses of Reverse Mortgage Holders," notes that if only one spouse's name is on a reverse mortgage and that spouse died, the surviving spouse would have to repay the loan in full or face eviction.

AARP sued the Department of Housing and Urban Development (HUD) on behalf of the surviving spouses of individuals who took out what is called a Home Equity Conversion Mortgage (HECM). These mortgages are the most common reverse mortgages and are overseen by HUD. These spouses were unable to sell and repay their loans because their homes were worth less than the balance due on the reverse mortgage due to the downturn in the economy.

Plan Now for the “What Ifs” of Life in Houston

Published on: September 16, 2014 | By McCulloch & Miller, PLLC

The most important thing for any patient with a long-term illness is to focus on his overall health and mental outlook. Having financial plans in place allows a patient to set other worries aside.

How do you plan for future illnesses or tragedies? The "what ifs" of life are all too real, so get your financial plans in place ahead of time.

Life Insurance is extremely important if you have young children who depend on your income. A recent Time article, titled "When Tragedy Strikes a Young Family," suggests a 20- to 30-year level term policy as a good start to help support your family through the children’s school years. Another often overlooked part of this type of planning is Disability Insurance. As many people have discovered, being unable to go to work due to an injury or sickness can be more financially catastrophic than death. Expenses typically increase with treatment and recovery, but your income stops. A disability policy either through your employer or through a private insurer can be a real wise move and offers a good deal of protection—it provides a portion of your income while you are unable to work.

Houston Scam Alert! Don’t Fall Victim to Estate Planning Cons

Published on: September 11, 2014 | By McCulloch & Miller, PLLC

Constantly in the news, it seems like there is a new scam making headlines. One surprising area in which scams are becoming more common is estate planning. Each year, more people fall victim to unscrupulous and unqualified sellers of ineffective estate planning documents. Often, these scammers are door-to-door salesmen or telemarketers.

Estate planning is a very personal and essential process to protect your loved ones and your assets. And all it takes is a scammer to mess that all up. A recent Webwire article, titled "How to Avoid an Estate Planning Scam," points out things to keep in mind when considering your estate planning options.

Employ a qualified estate planning attorney. Do-It-Yourself is very popular these days, from home improvement to filing income taxes. There are many websites that offer DIY wills. Beware! Estate planning is not a point-and-click or fill-in-the-blank proposition: it is a complex area of law with different rules depending on where you reside. Use a licensed, experienced estate planning attorney to prepare your estate plan. Check with the state bar and make sure he or she is licensed to practice law in your state.

Yes, Houston. You Really Do Need a Will

Published on: September 10, 2014 | By McCulloch & Miller, PLLC

If for no other reason, you need a will to name an executor (or executrix).

So, do you really need a will? Yes. Really.

A recent Forbes article titled "Do I Really Need a Will?" recommends that you should have a will to at least designate an executor or executrix to administer your estate. This individual will be responsible for taking care of your affairs after you pass away. Without a will, the probate court will appoint an administrator—this could end up being almost anyone. Anyone with a decent reason has the ability to petition the court to be appointed—like your cousin Reggie (who you last saw at your fourth birthday party) or your Uncle Ted (who is always dressed like it is 40 below, even in July).