Tax Planning

2015: New Financial Goals for Houston Families

Published on: January 13, 2015 | By McCulloch & Miller, PLLC

If history is a guide, this coming week nearly half of us will make resolutions seeking to improve some facet of our lives, many of which will be focused on personal finance. If one of your goals for the New Year is to get your financial life in order, here are a few key areas which should be included on your 2015 financial planning checklist.

As you begin compiling your 2015 financial goals, one of the first items on your list should be to calculate how much money you'll need in retirement. It’s one of the most significant math problems you’ll do after you finish grade school. Once you have arrived at the answer to this math problem, you need to examine if that answer will create a problem for you as you prepare for retirement.

With that target in place, pay heed to the advice in an article from Seacoastonline.com titled “Start your 2015 financial planning checklist.” Consequently, you should create a strategy that will help you achieve that goal. A savings plan is one method you can use—and take maximum advantage of any tax-deferred savings opportunities available to you along the way.

Lack of Health Insurance Could Impact Houstonian’s 2014 Taxes

Published on: January 12, 2015 | By McCulloch & Miller, PLLC

The Journal has consulted several local professionals with expertise in various financially related realms. We asked each for tips readers can take with them into 2015.

As we enter 2015, many Americans will start to shift gears to tax season and filing their 2014 tax returns. Just make sure you are aware of potential penalties, particularly regarding health insurance.

Starting in 2014, all nonexempt U.S. citizens and legal permanent residents must maintain minimum essential health-insurance coverage. This requirement is discussed in a recent Albuquerque Journal article titled “Tips help prep for improved finances.”

Keeping a Vacation Home in the Family

Published on: January 9, 2015 | By McCulloch & Miller, PLLC

Make a detailed plan for the home's future to avoid family feuds down the road.

Many memories are made in family vacation homes, and a lot of families do not want those traditions to end when a loved one passes. However, experts say you need to be careful in planning so the home's future isn’t the source of feuding. The biggest mistake owners can make is to fail to make a detailed plan for the home's future, cautions a recent Kiplinger's Retirement Report article titled "How to Pass Down a Vacation Home."

If an owner says “I don't care, I won't be here,” it rarely leads to a happy result. As we always say, besides honesty, communication is the best policy. Owners should meet with their adult children and spouses to create a plan for either keeping the vacation house in the family or selling it. Families can also get help from an experienced estate planning lawyer to develop ideas and plans.

Budget Suggestions for Houston Retirees

Published on: January 6, 2015 | By McCulloch & Miller, PLLC

The secret, experts say, is to find a balance between keeping some comforting traditions and letting go of ones that obviously no longer fit.

How do you manage the holidays on a retiree budget? If you are a retiree or will be retiring in the coming year or years, then this article may be for you.

Experts say that the key is to find a balance between keeping some of the traditions and saying goodbye to those that no longer fit.

Retirement Planning Changes for Houston Families to Note in 2015

Published on: January 5, 2015 | By McCulloch & Miller, PLLC

There were five changes that occurred in 2014 that everyone planning for retirement needs to know about.

The phrase "roll with the changes" may be 2014's retirement planning motto. While we could review political, economic and international, those affecting IRA planning have been especially interesting for retirees and the estate planning attorneys who advise them. Not surprisingly, Forbes has weighed in with an article chock full of advice titled “5 Biggest Retirement Planning Changes for 2015”.

A Change in Creditor Protection for Inherited IRAs. Overall, qualified retirement accounts, such as 401(k)s, pensions, and IRAs, have good creditor protections. However, in 2014 the Supreme Court cut back on some protection for IRAs. Typically, up to $1.25 million are protected from creditors if it’s in a Roth or Traditional IRA under federal bankruptcy laws. But the U.S. Supreme Court, in Clark v. Rameker, held that inherited IRAs are not “retirement funds.” So these don’t get creditor protections afforded under federal law. This might change how you want to bequest assets to your heirs. You should speak with a qualified estate planning attorney if you have questions.

Estate Planning for Houston Singles: What You Need to Know

Published on: January 2, 2015 | By McCulloch & Miller, PLLC

“For those who are single, whether they’ve always been single or they find themselves single again, there are some unique [estate-planning] issues,” says Doug Rothermich, managing director, wealth-planning strategies at TIAA-CREF.

Married couples usually can see the benefit of having an estate plan, but single people mistakenly think estate planning does not apply to them.

Accordingly to a recent Wall Street Journal article titled “Estate-Planning Essentials for Single People,” single people face some unique estate planning issues. This is true whether they have always been single or now single again.

Ring In the New Year with a Roth IRA

Published on: January 1, 2015 | By McCulloch & Miller, PLLC

Sharron Epperson, who is CNBC’s senior personal finance correspondent, stressed the importance of retirement planning in the coming year — with two products in particular.

Need a financial resolution for 2015? Save as much money as you can in a Roth IRA. One of the best things you can do to set yourself up for financial success in the future is to be strategic with your savings.

According to a recent article at gobankingrates.com, titled “CNBC’s Sharon Epperson on Why You Need a Roth IRA in 2015,” in the event of an emergency make sure you're able to withdraw your contributions at any time without incurring penalties or fees. This is also a terrific way to save for retirement, because you might be in a higher or lower tax bracket when you’re in your 60s. Who knows?

Store-Bought Gifts? Give Assets to Houston Families Instead

Published on: December 31, 2014 | By McCulloch & Miller, PLLC

Gifting can be an estate planning tool, for you can save on future estate taxes and have the pleasure of watching your dollars work for your children or grandchildren while you are still alive.

If you're tired of the standard store-bought items for gifts, you may consider a different spin on gifting. What about giving away some assets to your children or grandchildren?

In certain states, the estate exemption is just $1 million, not the $5 million (indexed for inflation) as at the federal level. CBS Boston's recent posting, titled “All About Gifting Assets,” warns that things can get complicated pretty fast and you should have a good estate planning attorney to help you.

Recent Survey Says 80% of Americans Failed Retirement Literacy Test

Published on: December 30, 2014 | By McCulloch & Miller, PLLC

“We’re not surprised by the fact that people don’t know a lot about retirement income planning,” says David Littell, program director at the American College. “I was surprised at how badly they did.”

Could you pass a retirement literacy test? Apparently, 80 percent of Americans surveyed did not.

These Americans were polled on 38 retirement literacy questions on basics like Social Security, life expectancy, IRAs, life insurance and investments, and the mechanics of bonds. Sadly, only 20 percent were given passing grades, the college said. This isn't the first survey to raise concerns about Americans’ retirement readiness. In an article titled “Americans fail in retirement literacy,“ The (Palm Springs, CA) Desert Sunnoted similar shortcomings in a 2011 report.

Longer Lifespan Can Affect One’s Inheritance

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

Adult children have historically expected to inherit from their parents while in their 40s or 50s, yet now many aren’t doing so until their 70s or even 80s, as their parents live into their 90s or beyond.

When should you expect to receive your inheritance?

According to the Social Security Administration, a 65-year-old man now has a life expectancy of 84, and a 65-year-old woman about 87. These increases in longevity have created changes in financial planning—like retirement calculations and long-term care insurance costs. However, as a Barron's article titled "When Longevity Upends Trusts" notes, these numbers are just beginning to affect trusts and estates.