Trusts

When “The Talk” isn’t About the Birds and Bees

Published on: November 8, 2016 | By McCulloch & Miller, PLLC

Conversations about money, death and dying wishes become tangled up in strong emotions surrounding these matters. A strategic approach might be helpful.

Every family is different, but almost every family struggles with conversations about wills, estate planning and money. A recent article in The Chicago Tribune, “Have the estate planning talk,” advises a thoughtful approach while letting you know that this is hard for everyone.

This is a tough topic because feelings and money get tied up. Money in many instances can conjure feelings of control (or lack of it), dignity, shame, fear, or a lack of confidence. Many conversations go south quickly. For example: if an adult son asks his mother if she and his father have recently updated their wills, he might be met with a response such as, "Why? Are you hoping we’ll die soon, so you can use your inheritance to finally pay off that huge mortgage we warned you not to take?"

Not Having a Will is Risky Business

Published on: September 1, 2016 | By McCulloch & Miller, PLLC

You know you need life insurance to protect your loved ones. But do you know that having a will is equally important to protect against risks?

Without a will, your family faces a number of potential financial disasters. If you think you don’t need a will because you aren’t wealthy or only own one home, you may be surprised to learn how not having a will leaves your loved ones open to a number of serious and costly problems.

Nerd Wallet’s recent article, “5 Hidden Dangers of Not Having a Will,” lists some of the most challenging issues, reminding you why it’s so important to have an up-to-date, signed will.

Trusts: Not Always the Best Option

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

Trusts are not right for everyone, so they need to be fully explored before being created.

If someone says you need a trust as part of your estate plan, you should speak with an experienced estate planning attorney before moving forward. A recent post from NJ 101.5, “The disadvantages to trusts,” notes that there are situations when a trust is not the right planning tool.

Trusts can save on estate taxes but are typically subject to higher income tax rates than those of an individual taxpayer once the “grantor” (i.e., trustmaker) dies. Trusts have to pay income taxes on the income they generate by the assets they hold. Such irrevocable trusts hit the top bracket at a very low income threshold: $12,400 of taxable income in 2016. The top income tax bracket for an individual doesn’t happen until his or her income exceeds $415,050. Also, the additional 3.8% net investment income tax applies at low thresholds.

What You Don’t Know About Estate Planning Could Hurt Your Family

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

Think of an estate plan as a love letter to your family after you have passed.

You’d be surprised at how many people you know don’t have a will or an estate plan in place. They may be among the many who have an unspoken belief that if they don’t have a will, they won’t die. That would be terrific—if it were true. Or, they think that only people who are wealthy or have complex tax issues require estate planning.

The Sabetha (KS) Herald’s recent article, “Understanding the estate planning process,” says that both of these ideas are wrong because your level of wealth and the ultimate tax consequences of your estate take a back seat to the planning and care of your family and other heirs.

The Changing Role of Trusts in Estate Planning

Published on: July 27, 2016 | By McCulloch & Miller, PLLC

A legislative change made the use of trusts less necessary for most Americans, but there are still many situations where this planning tool is the best option.

When the American Taxpayer Relief Act became law, the $5 million exemption and the new rules on portability of the exemption for married couples (i.e., $10 million per couple) became permanent. The tax rate on estates over that threshold, now $5.45 million per person, was bumped up to 40%. Many people who had created trusts to protect their descendents from estate taxes had cause to grumble because their trusts were no longer necessary, according to CNBC in “What's the difference between an inheritance and a trust?”

The estate tax now only affects about 0.2% of the population, translating to about 600,000 Americans. This was one of the big reasons why people set up trusts over the last 20 years…to avoid estate tax consequences. But trusts continue to have an important role in estate planning.

Create a Legacy Based on What Matters to You

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

Whether your love is animal rights or protecting the planet, a trust donation creates a legacy that reflects your values and supports the future.

A woman’s love for animals was reflected in a significant trust donation given to the Little Rock Zoo, as reported in The Northwest Arkansas Democrat Gazette article, “Animal lover leaves Little Rock Zoo nearly $3M, biggest gift ever.” A trust created an endowment fund, the Jayne and Fletcher Jackson Foundation, which will fund many programs at the zoo for years to come.

"Animals are what made her happy,” a zoo representative commented. “It was no surprise after we got to know her that the zoo was what she wanted to leave her estate to upon her passing."

Selecting an Executor Who is Not a Family Member or Friend

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

If you don't believe any friends or family members can serve as your executor, what are your options?

A question is raised by a well-to-do husband who is concerned that his wife is not prepared to handle a significant estate if he should predecease her. The couple has no children, and he is concerned about what will happen. In MarketWatch's "My wife and I don't trust anyone to be executor of our will," several different ways to prepare for this situation are examined.

One important note to consider: while mulling over the executor issue, do not table your estate planning. With both spouses still living, the planning should start right away.

Six Key Houston Estate Planning Documents To Protect Your Loved Ones

Published on: May 23, 2016 | By McCulloch & Miller, PLLC

Privacy and a faster resolution to settling estates are just two good reasons to create an estate plan.

You really don't have to be a millionaire or famous to create an estate plan, as noted in an article appearing on the Forbes' website, "Prince and Estate Planning: What We Can Learn from the Late Musician's Financial Picture." All you have to do is make sure that you have six basic estate planning documents in place to protect your loved ones from additional stress and worry when you pass away.

Here are the six key documents you should have to protect your assets and your family in the event of your passing:

Most Americans Still Don’t Have a Will

Published on: May 20, 2016 | By McCulloch & Miller, PLLC

Despite countless celebrity estate battles, most Americans still put off having a will created. Think of a will as an itinerary for your family that will make their lives easier once you are gone.

Prince was clearly busy with performing, writing, recording and creating. But that's still not a good reason for him to not have put a will in place. The very public court processes that are now underway could have been completely avoided had he devoted the time to creating an estate plan.

The Huffington Post, in its May 3 article, "Like Prince, A Majority Of Americans Don't Have A Will," stressed that wills are important as they establish beneficiaries, distinguish who gets what (and how much of it), and prevent the state from deciding what happens to your property.

Why It’s Important for Houston’s Young Couples to Consider Estate Planning

Published on: May 9, 2016 | By McCulloch & Miller, PLLC

Many young couples choose to hold off on estate planning because they feel they are too young to worry about estate planning and death. Maybe it’s because they think they don’t have enough assets to begin an estate plan or they just don’t want to think about death and what may happen to their minor children. However, having minor children is reason enough to being the estate planning process. And being young and healthy is not a “get out of jail free” card when it comes to death, as Houston accidents happen all the time.

If you have minor children, you should consider initiating the estate planning process immediately. While it’s not the easiest topic to discuss, it’s one of the most important things you can do for your family. The estate planning process is not too difficult, and it helps to be prepared before you start. The process is much easier when you know what is expected of you:

Name a trusted individual to be the executor of your estate.