Will Changes

Tom Clancy’s Unintended Thriller: His Estate Battle

Published on: October 3, 2014 | By McCulloch & Miller, PLLC

A tax battle is brewing over his $83 million estate, pitting Mr. Clancy’s wife against the adult children of his former marriage. His widow Alexandra Clancy is taking legal steps aimed at shifting all state and federal estate taxes—estimated in court papers at as much as $16 million—to the portion of the estate Mr. Clancy willed to the four grown children he had with his first wife.

A high-profile estate battle is brewing for a certain famous author. The late Tom Clancy likely didn't anticipate adding this "thriller" to his list of works.

Tom Clancy’s estate includes a 12 percent stake in the Baltimore Orioles baseball team—estimated to be worth $65 million—and a collection of unique items, such as a World War II tank "with very low mileage,” according to Maryland probate court filings. In 2013, he died in Baltimore. He was survived by his daughter from his current marriage.

Estate Planning 101 from Famous Celebrity Stars

Published on: October 2, 2014 | By McCulloch & Miller, PLLC

Several recent celebrity estate issues in the news highlight how important it is to plan ahead and get professional advice when setting up your estate plans.

When celebrities pass away, aspects of their estates hit the news almost immediately. These high-profile cases can offer some valuable lessons for the rest of us.

A recent Forbes article, titled "Lessons Celebrities Can Teach Retirees About Estate Planning," advises us to learn a thing or two from famous stars who have passed recently—some with solid estate planning and some without.

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.

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.

Joan Rivers’ Dream Hollywood Funeral – Is It Tax Deductible?

Published on: September 23, 2014 | By McCulloch & Miller, PLLC

On September 4, 2014, comedy icon Joan Rivers passed away. It's no secret that Rivers hoped for a funeral that rivaled her lifestyle: big and over the top.

Craft services. Paparazzi. Meryl Streep crying in five different accents. These are just a few of the wishes the late Joan Rivers had for her Hollywood funeral. Those arrangements, Forbes reports–Meryl Streep notwithstanding–would be easy to arrange with the late Joan Rivers’ money. The article is titled"Saying Goodbye To Joan Rivers: The Bigger The Funeral, The Bigger The Tax Deduction?"

Rivers' income from book royalties, appearance fees and salary at E! Television, plus sales of her QVC merchandise may have exceeded $1 billion. So, Joan could afford the big farewell.

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.

Houston Estate Planning Step 1: Identify Your Assets

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

Your first step? Take stock of all your assets. These include your investments, retirement accounts, insurance policies, real estate and any business interests.

According to CNN Money's "Identifying your assets" (i.e., part of its Money Essentials Series), a good first step for estate planning is to review and inventory all of your assets. This includes your investments, pensions, retirement accounts, life insurance policies, real estate, and businesses. While you are at it, be sure to categorize your important papers, like birth and marriage certificates, Social Security cards, insurance policy numbers and current statements, and mortgage information, along with updated contact information for each.

The second step is to determine what you want to accomplish with those assets—do you want to pass them to your children, set up a trust for a favorite charity, or a combination of these? Maybe you want to go in a different direction all together.