Inheritance

Why is it Difficult to Pick an Executor?

Published on: April 10, 2019 | By McCulloch & Miller, PLLC

It’s hard because you want to be sure your chosen person understands your wishes, your financial situation and can make good decisions on your behalf. Not everyone can do that.

There is considerable responsibility that comes with being named an executor of an estate, explains MoneySense in the article “Should the sole recipient of an estate be the executor too?” There have been new rules passed in the last year that make the tax reporting even more important. What happens if you realize that the person you originally named may not be up to the task? This is another reason why it’s good to review estate plans every few years. There are several factors to consider when you think about whom you might name.

Consider the person’s age. It’s smart to choose a person who’s younger than you. Although that doesn’t guarantee that they will outlive you, it certainly ups the odds. Ideally, you should try to find a person who is comfortable with the areas of money and tax and doesn’t easily get overwhelmed by paperwork. Since the role of estate executor can be an intense issue that takes a great amount of time, the person you choose ideally will be retired or have the bandwidth to dedicate the substantial time commitment required to do the job properly.

What Purpose Does a Revocable Trust Serve In My Estate Plan?

Published on: April 8, 2019 | By McCulloch & Miller, PLLC

The foundation of your estate plan is a will, also known as a last will and testament. Depending upon your situation, your Houston area estate planning attorney may recommend additional documents, including trusts.

The first part of your estate plan is the creation of a will to provide clear instructions of how your property should be distributed after you pass. The will is also used to name a guardian for minor children, if your family is still young. The concept that many people don’t understand, is that without a will, these and other decisions will be made for you according to the laws in Texas. It’s far better to make these decisions for your family yourself.

Some estates are straightforward and simple. If you have a large amount of assets, children from different marriages, or own a business, your estate will draw on different strategies used by the estate planning attorney. Among them may be a revocable trust.

How Trusts Work in Estate Planning for Regular People

Published on: March 18, 2019 | By McCulloch & Miller, PLLC

You’ve heard the expression “trust fund babies.” However, trusts are not just for the wealthy. They have a number of uses in estate planning and can be helpful at any asset level.

The reality of our own mortality keeps some of us up at night. For others, it’s a disturbing thought that is easily brushed aside. Whichever group you belong to, you need to have an estate plan in place. This is the only way that you can have any say in how your assets are distributed after you pass. Without an estate plan, your family will be subjected to much more stress and financial strain. One part of an estate plan is a trust.

Barron’s recent article, “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich,” explains that there are many types of trusts, but the most frequently used for these purposes is a revocable living trust. This trust allows you—the grantor—to specify exactly how your estate will be distributed to your beneficiaries when you die, and at the same time avoiding probate and stress for your loved ones.

When Does an Estate Plan Need to Be Reviewed?

Published on: March 13, 2019 | By McCulloch & Miller, PLLC

People think of estate plans as one-off documents, but they should think of them more like cars. Estate plans need maintenance, oil changes, tune-ups and if there’s an accident, repairs.

As life progresses, you’ll go through a number of stages, from being a teen to an adult, getting married, retiring, welcoming grandchildren and more. Every time you move through a stage, your estate plan should too.

Bankrate’s recent article, “Estate planning triggers: When to re-evaluate your estate planning strategy,” says the risk of not having a current estate plan and will that state your wishes is significant. When people fail to put any plan into place, it leads to confusion, chaos, and unintended consequences. Use this list of important life events as triggers to remind you to discuss your current situation with a trusted attorney.

How Life Insurance Works Best in an Estate Plan

Published on: February 15, 2019 | By McCulloch & Miller, PLLC

Life insurance can help heirs avoid having to incur expenses like estate taxes, funeral costs and similar expenses. However, it also gives heirs breathing room, so they can make the best use of other assets.

Here is an example of how life insurance should work. A father, Howie, dies and leaves a large estate to daughter Eva. The estate is large enough that it triggers a huge estate tax. However, the bulk of his assets are tied up in an IRA and real estate properties, some of which could be put on the market quickly, but not quickly enough for tax deadlines.

With that scenario, Eva might not want to immediately force a sale of the real estate. However, if she accesses the inherited IRA to raise money, she’ll have to pay income tax on the withdrawal and lose a terrific opportunity for extended tax deferral.

Why A Will is Not a Do-It-Yourself Project

Published on: February 13, 2019 | By McCulloch & Miller, PLLC

Writing your own will is a lot like trying to do your own dental work. You can brush, floss and even use a water flosser, but the rest is best left to the trained professional.

It’s a fairly common question: “Why can’t I download a form and create my own will?” However, estate plans, and that includes wills, are important legal documents and getting things wrong can have long-lasting consequences.

The Frisky‘s recent article, “Why You Should Hire A Lawyer to Write Your Estate Plan,” says that writing your own estate plan can be a complicated thing—and one that a non-attorney may find very difficult.

Why You May Need a Gun Trust if You Own Guns

Published on: February 11, 2019 | By McCulloch & Miller, PLLC

Gun owners, you may own guns to protect your family or because you admire the workmanship or history of firearms. However, without a gun trust, your heirs may face a surprising consequence.

Mistakes with inherited IRA accounts can become expensive, but the penalty is financial. Inherit a gun collection without the necessary permits, and you could unwittingly commit a felony. Gun collectors need to prepare their heirs, if they intend to pass on their firearms, and they may also need a gun trust.

Kiplinger’s recent article, “Own a Gun? Careful: You Might Need a Gun Trust,” explains that a gun trust is the common name for a revocable or irrevocable management trust that’s created to take title to firearms.

Millennials Need an Estate Plan Too

Published on: January 29, 2019 | By McCulloch & Miller, PLLC

Live long enough, and you learn that life can change in a heartbeat. Young adults don’t always know this, but they need to have an estate plan as much as older people.

Whether you are a Baby Boomer or a Millennial, you need to have an estate plan. With the help of a good estate planning attorney, someone in their 20s and 30s can get their estate plan done easily enough. Even if they think they’re immortal, says Wealth Advisor in, “Estate Planning Isn’t Only for the Old and Wealthy,” young adults need estate plans.

First, people can draft a will to provide directions regarding what happens to their assets, such as who will inherit both financial and personal items. Virtual assets like social media accounts should also be included. You should make a list of usernames and passwords for all your accounts and be sure that a trusted relative or friend has access.

The Sooner You Complete Your Estate Plan, The Better

Published on: January 24, 2019 | By McCulloch & Miller, PLLC

Among the top three reasons for an estate plan are to make sure that your assets are distributed according to your wishes, helping your loved ones from having to pay more taxes than necessary and if possible, avoiding having your estate go through probate.

When there are minor children or family members with special needs, it’s critical to have an estate plan, advises the Capital Press in the article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children need protection. Wills are frequently written, so the estate goes to the child when he or she reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for the child by a trustee or executor until a set age, like 25 or 30.

The Difference Between Per Capita And Per Stirpes – Beneficiary Designations

Published on: January 17, 2019 | By McCulloch & Miller, PLLC

Out-of-date beneficiary designations could completely undo your entire estate plan. It happens often, since people often neglect these ‘fine print’ details.

We hope that you have a will to ensure that your assets are distributed according to your wishes after you pass. However, if you are like most Americans, many of your assets are not distributed through your will, but through a beneficiary designation, which you may have not thought about since opening up the account, retirement account, 401(k), IRA or SEP or taking out a life insurance policy. A word of warning: regardless of what’s in your will, the beneficiary designation takes precedence.

Benzinga’s recent article addresses this question: “Estate Planning: What Are Per Capita And Per Stirpes Beneficiary Designations?” Have you changed the beneficiary designations, since the account or policy was first started? If you need to update your beneficiary designation, talk to the company responsible for maintaining the account. They’ll send you a form to complete, sign and return. Keep a copy for your own records.