Inheritance

What Happens When an Heir Predeceases the Parent?

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

If your will does not address this issue, then your state’s laws will be applied. Speak to an experienced Houston estate planning attorney to see about Texas heir laws.

Estate planning attorneys deal with unexpected issues all of the time, and by their nature, some of them involve sensitive and sad topics. A recent article in The Carroll County Times addressed the question of what happens when a child predeceases a parent. The article, “Legal Matters: If predeceased by an heir in a valid will, what happens with that inheritance?” explains that a will can be prepared for this possibility, and a will can also be changed, if this was not previously considered.

As an example, the Maryland Estate and Trusts Code says “[u]nless a contrary intent is expressly indicated in the will, a legacy may not lapse or fail because of the death of a legatee after the execution of the will but prior to the death of the testator.”

What Are the Rules About Inheriting an IRA?

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

The rules are strict, and mistakes can be costly.

Inheriting an IRA is not like inheriting any other asset. You’ll need to be very careful to follow the rules. Usually the parent is the beneficiary and the children (grandchildren) are successor beneficiaries. Here’s how it works, as described in nj.com’s recent article, “Inheriting an inherited IRA? Your payout choices will be limited.”

Per IRS rules, if you die prior to withdrawing all the funds from an inherited IRA, then the beneficiaries are bound by the same Required Minimum Distribution (RMD) schedule that they’d chosen when they inherited it.

Is Your Estate Plan Working for You?

Published on: December 20, 2018 | By McCulloch & Miller, PLLC

Remember that estate planning is not just for the wealthy, and now that the federal exemption is so high, not just for the billionaires either. Estate planning is also much more than a will.

Your estate plan has a lot of work to do for you, both while you are alive and for your family when you have passed. A good article that explains it all comes from Investopedia, “How to Get Your Estate Plan on Track.” There are three key objectives that your estate plan needs to do:

End-of-life health care decisions are documented in a legally binding document;

One Dozen Must-Have Documents

Published on: November 6, 2018 | By McCulloch & Miller, PLLC

To make sure that your wishes are carried out, you’ll have to do your homework. Make sure that you cover these most important documents.

The last thing you want to do, is leave a bureaucratic mess for your loved ones when you die. Not only will it cause the family stress during a difficult time, it could change how your family thinks of you. That should be more than enough reason to get this done in advance!

US News & World Report’s recent article, “12 Documents to Prepare Now for Your Heirs,” says that when people don't have their paperwork ready, it can be a huge headache for the family. A family can be left with all kinds of paperwork to sort out while dealing with grief. Even worse, heirs may forfeit life insurance proceeds and tax deductions or overlook accounts they don't know exist. That's why it's critical to have important documents ready for loved ones. Here are the documents you should start preparing right away:

How Does Life Insurance Work in Farm Estate Planning?

Published on: November 2, 2018 | By McCulloch & Miller, PLLC

Life insurance can be useful in paying off debt, covering funeral costs and serving as a useful resource so that estate proceeds or any one person’s savings don’t have to be tapped.

Life insurance may be the least sexy part of the transition from one farming generation to another, but this financial tool can be very valuable. If parents or grandparents have planned properly, the proceeds from the life insurance may provide the funds that permit the farm to stay in the family. The proceeds, which are not subject to estate taxes, can be used to buy out the non-farming siblings so that the family ownership of the land can continue to another generation.

Successful Farming’s recent article, “Using Life Insurance in Estate Planning,” quotes David Bau, a University of Minnesota Extension educator based in Worthington, Minnesota. He says, “Life insurance is expensive, but it’s still a very good tool in the process. The farming heirs can have insurance on their parents, and they can use that money to buy out the estate.”

Brad Pitt is Savvy About His Children’s Future

Published on: October 30, 2018 | By McCulloch & Miller, PLLC

Here’s one celebrity savvy about estate planning. Actor and producer Brad Pitt has an estate plan that will keep his money away from his ex and benefit his children through a $250 million trust.

After reading about so many celebrities who fail to plan for the future, it’s refreshing to learn that one bold-face Hollywood star has taken steps to create a will and care for his children. In the recent article from Wealth Advisor, “Even Brad Pitt Has Prepared A Will (And A Post-Divorce Trust),” the 54-year-old Pitt has achieved the dual purpose of keeping his millions from his ex-wife and had a trust created to divide his money between his six children.

A source, who’s a family friend commented, “Brad’s intent is that any money he doesn’t have to give Angie in a divorce settlement and for child support is well-protected. He’s setting up a firewall that is specifically intended to keep her hands off his cash.”

Leaving a Legacy? Expand What That Means

Published on: October 29, 2018 | By McCulloch & Miller, PLLC

Your legacy is far richer than your assets and possessions. Planning to pass on a legacy to your family becomes more rewarding, when it includes non-tangibles, like values and treasured family stories.

Who wants to think about death, dying and bank accounts? Not too many people do. That’s why so many of us tend to put off creating or updating our wills. However, taking a different approach, breaking up the task into four key components, and including more than the assets you’ve accumulated over a lifetime can make planning your personal legacy rewarding. The Street’s recent article, “Planning Your Legacy: More Than Just Finances,” explains how this works.

Pillar 1: Values and Life Lessons. People can forget to provide for some of the most valuable gifts that can be passed on to the next generation of family members, which are experiences and memories. Your years of life encounters have given you a wealth of life lessons and knowledge you can pass on to your heirs. Document your memories, relationships, and any important lessons you want to preserve.

Robert Indiana, LOVE Artist’s Estate in Litigation

Published on: October 18, 2018 | By McCulloch & Miller, PLLC

“The man who took care of Robert Indiana in the last years of his life, told a probate court hearing Wednesday that he was paid roughly $250,000 a year to tend to the aging artist, whose estate and legacy are now the subject of acrimony and lawsuits.”

Under questioning by a lawyer representing the estate, caretaker, Jamie L. Thomas said he’d been earning $1,000 a week in 2013, when he started taking care of artist Robert Indiana, who lived alone on a Maine island, until his death in May at 89.

The New York Times’ recent article entitled “Robert Indiana’s Estate: Generosity, Acrimony and Questions” reported that by 2016, Thomas said the artist had raised his salary to $5,000 a week for round-the-clock work that included bringing him meals, taking care of his dog and helping him to bed. He was also granted Indiana’s power of attorney.

What Happens in Your World After You Die?

Published on: October 8, 2018 | By McCulloch & Miller, PLLC

We’re not talking about what happens to your soul, or if you are headed to a peaceful place, or even what happens to your physical remains. Have you thought about what happens to the world you leave, your family and friends and your possessions, after you die?

Let’s say you don’t believe in anything in particular. Or you’re deeply spiritual and believe that death will be a wonderous journey. Either way, you should devote time and energy to what happens right here on earth after you die, says Forbes in the article, “What Will Really Happen After You Depart?”

No, not just because it’s the right thing to do and not just because you’re curious. It’s because you want your family to remember you for the awesome legacy you plan on leaving, not because of the horrible hot mess you left behind that they spent three years trying to figure it out, while trying to live their lives.

Can an Estate Plan Become a Legacy Plan?

Published on: September 25, 2018 | By McCulloch & Miller, PLLC

The old saying that the first generation builds the business, the second generation struggles to maintain it and the third squanders everything, is sadly, statistically true. However, creating a legacy might give you better odds of success.

If you’ve been responsible and had an estate plan created, you are way ahead of most of your peers. You’ve planned for your family and your heirs with a will, powers of attorney, an advanced directive and likely created the appropriate trusts to hold life insurance policies to minimize estate taxes and protect the proceeds from creditors. You may have even done some succession planning, using family trusts and other planning vehicles. However, will this be enough for a lasting legacy?

Forbes’ recent article, “How To Turn Your Estate Plan Into A Legacy Plan,” says that perhaps you’ve heard that legacy planning is the solution to your problem. However, you are worried about the expense. If you create a legacy plan, does it mean you’ve wasted time and money? No, it doesn’t. The documents you’ve already prepared for estate planning can most likely be used and incorporated into a more effective legacy plan. Let’s look at how to turn an estate plan into a legacy plan.