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The article “Plan ahead to reduce stress on loved ones” provides a list of things to consider that would prove important when they will be needed: Can you find your will, trusts, power of attorney, and any letters of instruction? Does your spouse or your children have a list of your bank accounts, your estate planning attorney, CPA, banker, or financial advisor? Does someone have your health care power documents in the event they are needed in an emergency? Do you have a list of your life insurance policies or your retirement plan documents? Copies of marriage licenses, birth certificates, and military discharge papers are all very important. You may know where they are, but does your spouse or children? Someone should be able to locate your tax returns, brokerage statement, and beneficiary information. What about your day-to-day bills and the location of your checkbook and savings accounts? Do your family members know who your doctor is? Is there a list of your heirs and who has financial powers available? These are things you need to have ready and organized to make a difficult time easier on your family. Also, they need to understand your wishes and desires in case something happens. Next year for Valentine’s Day, think about showing your love a little differently. Planning to make difficult times easier on the ones you love may be the best gift ever. Reference: Appleton Post-Crescent (February 13, 2016) “Plan ahead to reduce stress on loved ones” #LeagueCityEstatePlanning #IncapacityPlanning #PowerofAttorney #Wills #HoustonEstatePlanningLawyer

Legally, these items are referred to as “tangible personal property,” but it could be dad’s stuff. What happens to this stuff after someone dies depends on many factors, and one of the biggest is whether he or she dies without a will, or “intestate.” Credit.com’s recent post, “Who Gets the Family Heirlooms When I Die?” looks at what happens to someone’s stuff when there’s no will. When there’s no will, the state law for intestacy where the deceased was living applies to determine who inherits his or her tangible personal property. In the majority of states, if the deceased was married, much of the tangible personal property will go to the surviving spouse. However, in blended families, the law typically notes a percentage or faction—such as one-third or one-half. Figuring out exactly what that fraction is can be a problem. For example, what’s a third of the couch or one half of the jewelry? When children and step-children are involved, things can unravel fast because there are no instructions to determine who gets what. One idea to avoid an epic meltdown is a lottery system where the heirs take turns selecting and pick what they want according to the numbers they’ve drawn. Rather than put your family through this, your best option for dealing with your tangible personal property is to draft a will or a living trust that includes a specific heirloom list and a formula for distributing things that are not on that list to ensure that your wishes will be legally enforceable. Work with a knowledgeable and experienced estate planning attorney so that the stress and fighting is minimal when the day comes to decide who gets your stuff. Reference: credit.com (February 14, 2016) “Who Gets the Family Heirlooms When I Die?” #ProbateAttorney #TrustsandEstates #Probate #ProbateCourt #Inheritance #SugarlandEstatePlanning #ClearLakeWills #Trusts #LeagueCityEstatePlanningLawyer

The article, “Sumner Redstone’s ex-girlfriend stands to lose $70M after new will,” says that a new court document explained that Herzer was named in Redstone’s will until the 92-year-old former chairman of Viacom and CBS Corp. ended the relationship last fall and rewrote the will. Herzer filed a lawsuit, asking a judge to reinstall Herzer as Sumner’s health agent. Redstone’s previous will stated that Herzer was entitled to $50 million and his $20 million house in Southern California. However, last fall Redstone removed her as his health care agent and ordered that his estate pass to his charitable foundation. Redstone has been thought to be too mentally incapacitated to be involved in running corporate boards. He recently resigned as chairman of the boards of directors for both CBS Corp. and Viacom. Redstone became Chairman Emeritus of the companies, ending his managerial involvement. A judge in Los Angeles is scheduled to rule later this month on a motion by Redstone’s lawyers to throw out Herzer’s lawsuit. Reference: USA Today (February 9, 2016) “Sumner Redstone’s ex-girlfriend stands to lose $70M after new will” #AssetProtection #HoustonEstatePlanning #WillChanges #Wills #ElderLaw

529 Accounts. These are a very popular college savings vehicle. The combination of tax benefits and flexibility makes them a good choice for many folks. It is essential to understand the impact of account ownership and the timing of distributions on financial aid. If grandparents contribute to a 529 account in a parent’s or grandchild’s name, the 529 account counts as a parental asset under the guidelines of the Free Application for Federal Student Aid. As a result, those monies may reduce the amount of aid for which the student is eligible. Typically, it’s wisest to establish the 529 plan in the grandparent’s own name so it won’t impact need-based aid eligibility on the FAFSA. You also need to be cautious when making 529 distributions. Although parent-owned 529 plans are included in aid calculations, qualified distributions used to pay for the student’s education expenses are not included for the following year. But grandparent-owned distributions are considered “untaxed income,” which can reduce a student’s aid award. If grandchildren aren’t going to attend graduate school, take the distributions when they are in their junior or senior year of college because of the new “Prior-Prior” rules that use the student’s sophomore year as the final “base” year for assessing aid eligibility. Gifts. When it comes to financial aid, grandparents should use caution with gifts because gifts given to grandchildren or directly to the school will be deemed “unearned income.” This could decrease the amount of their award. The best time to make gifts is in the grandchildren’s junior or senior year of college. If they aren’t going to grad school, gifts received in the last two years of college are not counted in aid calculations. In the college-planning process, first determine if your child qualifies for need-based aid at the schools of his or her choice. If not, then it doesn’t matter who owns the assets, receives the income, or when the gifts are made for aid purposes. Next look at merit aid and tax aid—such as the American Opportunity Tax Credit—and how to best use personal resources to pay your share of the expense. College is a great investment, so be proactive and plan accordingly. Reference: Nerd Wallet (February 9, 2016) “Grandparents and College Planning — the Right Way” #529EducationalSavingsAccount #TaxPlanning

Here are three simple steps you can take to reduce your stress and improve your financial well-being for the rest of 2016: Talk to your attorney. Discuss any major life changes, such as changing jobs, adding a new family member, retiring, or receiving a financial windfall. In most circumstances, these changes will have an impact on your tax situation and cash-flow, as well as your insurance and estate-planning needs. The earlier you can take them into account in your planning, the more beneficial and less stressful their impact will be. A little planning now can go a long way toward avoiding any surprises later. Organize your taxes. You should also gather up and keep your tax information organized. Don’t wait until the last second and scramble every April. Automate changes. If you automate savings, incremental changes will be easier to realize. For instance, you can automate your contributions to your 401(k). Some employers also allow you to set up an automatic annual increase in your contribution amount, allowing you to save more over time. You can also automate monthly deposits to savings plans, like a 529 college savings plan or other investment accounts. These steps may seem small, but each can dramatically improve your finances. Small wins at the beginning of the year will help you stay committed to improving your financial well-being for all of 2016 and beyond. Reference: Nerd Wallet (February 8, 2016) “3 Simple Steps to a Financially Strong Start in 2016” #AssetProtection #HoustonEstatePlanning #ProbateCourt #Inheritance #ClearLakeEstatePlanningLawyer #PowerofAttorney #Wills #TaxPlanning #Trusts

Let’s first look at the “five year” rule for withdrawing funds tax-free from a Roth IRA. We need to distinguish between contributions to a Roth individual retirement account and the earnings on those contributions. For instance, if you deposit $1,000 in a Roth IRA, you can withdraw that same $1,000 at any time, tax-free and penalty-free. However, you can’t take a tax-free and penalty-free distribution of earnings on your funds until the account is at least five years old and until you have reached age 59½. There are some exceptions to the age rule. The five-year clock starts when the account is first opened. The clock doesn’t reset with each additional deposit, and the clock starts on January 1 of the year in which you opened the account. Moving and Estate Planning Documents What happens with your estate-planning documents when you move during retirement? Questions arise when this happens, and people wonder if they need to throw away their wills and powers of attorney and draw up new ones. Yes, it is worth your time and money to have new estate planning documents prepared for your new address. Many times, this is overlooked in the disruption of a move. A will that is valid in your current state (one that was created and signed in accordance with that state’s laws) will still be valid in a different state. However, the laws involving probate, property, trusts and estate taxes are different in each state. For example, the individual you selected as the executor of your will in your current state might not qualify as the executor in your new state. You might also be moving to a community-property state from a state that wasn’t in that system. These types of differences support drafting a new will. Also, a power of attorney, which gives the authority to the person you have selected to act for you in various legal and financial dealings, may face issues. Some states have their own forms and wording for creating a power of attorney—forms with which local banks and institutions are familiar. Why take the chance that a power of attorney in one state might not pass muster in another? At the very least—even if your estate-planning documents are relatively new and you don’t want to go through the hassles and cost of starting all over again, you should speak with an experienced estate planning lawyer in your new locale and have him or her review your paperwork. Reference: The Wall Street Journal (February 7, 2016) “When the 5-Year Clock Starts on a Roth IRA” #RothIRAs #ProbateAttorney #WillChanges #PowerofAttorney #Wills #HoustonEstatePlanningLawyer

The Indiana Lawyer recently published “Do-it-yourself dangers” that explains how do-it-yourself estate planning oftentimes creates more work for attorneys after somebody dies. One attorney represented parties in an estate where a will wasn’t valid, which meant that the decedent’s wishes weren’t met. He had wanted his estate to be shared equally among his children, but because the DIY estate plan wasn’t properly witnessed, it was invalid and the donor died intestate—or without a will. The probate court applied state law and divided the estate between his children. However, because one child had died, that heir’s share passed instead to a grandchild, which was not what the decedent intended. What most people don’t realize is that you don’t find out there’s something wrong until somebody dies, and then it’s too late to fix the mistakes. When online will forms are completed incorrectly, the wills become invalid and the estate is treated as if there was never a will at all. It takes far longer to settle the estate when this happens, and it costs heirs more time and money than if the will was done correctly by an estate planning attorney. A simple will or a power of attorney doesn’t cost that much to have an attorney prepare, plus you get a lot of advice and counsel from an attorney that you don’t get from a downloaded form. For instance, an attorney may advise you to include “I waive a bond” for my executor. This alone can save several hundred or several thousand dollars in fees, depending on the size of the estate. There are also document-recording peculiarities in each state that estate planning attorneys know and deal with every day. You will not get those insights when you rely on downloaded forms. During a face-to-face conversation with an experienced attorney, important issues tend to come out, like providing for a grandchild with special needs or an asset that might be difficult to transfer. Many people may start with simple estate planning documents online but then see that they need to purchase, complete, and file more papers than they originally anticipated. Those costs can soon be comparable to what a client would have paid to have a qualified lawyer do the work in the first place. Online legal form providers don’t give clients the trust they can foster with an attorney. He or she will work with you to meet your goals and provide the peace of mind that comes from not worrying about whether the estate plan was done properly. Reference: Indiana Lawyer (January 27, 2016) “Do-it-yourself dangers” #OnlineForms #ProbateAttorney #TrustsandEstates #WillChanges #HoustonWills #Probate #ProbateCourt #Inheritance #PowerofAttorney #HoustonEstatePlanningLawyer #Trusts

Whether you’re creating your first estate plan or updating your current plan, review your estate plan every three or four years or after a significant milestone. Also, consider these four steps. Identify your estate plan goals. Before creating or reviewing your estate plan, figure out what you’re trying to do. Do you want to make sure there’s support for your children? Do you want to make sure your spouse is OK if you pass away unexpectedly? Do you want to give to charities? These goals will determine what planning strategies you’ll need for your circumstances. Take inventory of your assets. With your estate plan, take inventory of the items in your estate, such as real estate, investments, family heirlooms and life insurance policies. And also note your current liabilities, like a mortgage or credit card debt. Consider what estate planning elements you need. A will? For sure, but there may be other items you need, such as a trust if you have a lot of assets that may be subject to probate. Also, a health care directive and power of attorney provide instructions if you become incapacitated. Talk with your estate planning attorney to be sure you have these in place to help carry out the goals of your estate plan. Choose a personal representative. The personal representative or executor is responsible for settling your estate’s affairs. It’s a big job, so be sure to select an individual who’s familiar with your situation, is able to carry out all of the tasks associated with the role, and is willing to take this on. This isn’t a full list of important estate planning principles. Speak with an experienced estate planning attorney to find out about specific strategies that may be best for you and your loved ones. Reference: Des Moines Register (February 1, 2016) “Your checklist for creating or reviewing your estate plan” #AssetProtection #ProbateAttorney #Probate #ProbateCourt #Inheritance #SugarlandEstatePlanningLawyer #ClearLakeWills #PowerofAttorney #LeagueCityTrusts

According to a recent article from The Motley Fool entitled “Planning for Retirement When You’re Single,” singles need to have more emergency savings than someone who’s married. Why? Because you’re the only source of income if you lose your job or fall ill. Single people also get fewer income tax breaks than married couples filing jointly. Living on one income without someone else to share expenses is not easy. Single people have a harder time saving than married folks and, consequently, saving money and funding retirement accounts is definitely more difficult. Single people also have fewer options when it comes to Social Security benefits since those who are married, widowed, or divorced can claim benefits based on their current or former partners’ earnings. By contrast, single folks are limited to benefits based solely on their own earnings. Against these challenges, however, here are some great ideas for singles: Start early. Your best bet is to ramp up your savings early and take advantage of whatever matching programs your employer has. The good news for singles is that when companies offer 401(k) matching dollars, they do it equally, regardless of marital status. So, make sure to budget money to your 401(k) to max out on employer contributions. Make plans to take care of your health. Healthcare costs in retirement can be a significant financial hardship. The average couple retiring in 2015 at age 65 can anticipate spending about $245,000 on healthcare costs in retirement, not including long-term care expenses. Nursing homes currently run in excess of $90K a year, and around-the-clock home care can be as much as $170,000. About 70% of adults aged 65 and older will require some type of long-term care at some point in their lives. If you’re single, purchase a long-term care insurance policy to cover nursing-home or home-care costs, as there’s a good chance you’ll need it. Use your freedom to your advantage. When you’re single, you can go where you please. This means you can pursue career opportunities that may prove more lucrative than your current job in other areas of the country. FYI: for 2016, the Social Security Administration’s cost of living adjustment was $0. Zilch. This doesn’t just mean that those receiving Social Security benefits won’t get an increase; companies that have given cost of living raises may not give their employees any extra this year. If you’re offered a higher-paying job at a new company, take advantage of the fact that you’re free to uproot yourself with less stress. Lower your housing costs. You have options for saving money on housing expenses. A smaller place might seem cramped if there’s another person with you, but if you’re on your own and want to increase your savings, start by downsizing your living space. If you lower your rent by $200 a month, over a three-year period, that’s an extra $7,200 in savings. Get some documentation in order. You need some estate planning and should draft a will and name your power of attorney and beneficiaries. While being single might be some disadvantage financially, you do have the opportunity to take control of your finances—you have the option to invest your money as you see fit. Reference: The Motley Fool (January 26, 2016) “Planning for Retirement When You’re Single” #HoustonWills #WebsterPlanningfortheFuture #Beneficiaries #SugarlandEstatePlanningLawyer #PowerofAttorney #TaxPlanning

While the settlement fully resolves the Will contest claims of James’ children, the fight is far from over. Brown’s wife, Tomi Rae Hynie, is still contesting the Will, making the status of the Will’s validity still unresolved. About a year ago, the South Carolina Supreme Court put everything on hold. Now the only thing still in progress is the question of whether or not Tomi Rae Hynie is the legal spouse of James Brown. That issue is being heard by the Court of Appeals. It is the one issue where all the Brown children are united: they want the judge’s ruling that Tomi was Brown’s spouse overturned. If she’s his wife, she controls the money flow from Brown’s copyrights. That’s money that should go into a trust, according to the Will. If Tomi Rae isn’t Brown’s wife, the kids control that money. If the appellate court rules that Tomi Rae is indeed the legal wife of James Brown, then they’d have to next determine if the prenuptial agreement is valid. The court could hold that she’s not the wife, or they could decide it’s a jury issue. If so, this could go on for years. As it stands now, the four adult children named in the settlement would keep the property Brown wanted them to have, remove the Will contest clause, and give them $147,000 collectively. As a part of the deal, they’ll cooperate with the estate and end their legal fight. Reference: WRDW.com (January 26, 2016) “James Brown Estate: What a settlement means for other pending lawsuits” #ProbateAttorney #Probate #ProbateCourt #Inheritance #LeaugeCityWills #ClearLakeEstatePlanning #WebsterEstatePlanningLawyer

Some of the benefits of a 529 savings plan are that you can use the annual exclusion gift, now set at $14,000 per year per person. If you have three grandchildren, that’s $42,000 a year that you can exclude from your estate. If you put the funds in 529 plans, you still have control of them as the owner of the account, and you can make the grandchildren the beneficiaries. Another nice thing about the 529 plan is that if you need the money down the road, as the account owner, you can withdraw money. You would however be hit with a 10% penalty, plus taxes on the growth of the investment. Based on how much you want to give, you can front load five years of contributions in a single year. The cons concern what you see as the future need of your grandchildren. A 529 plan is only designed to pay qualified secondary educational expenses. That means things like tuition, books and other supplies. However, if one grandbaby doesn’t want to enroll in college, you can always switch the beneficiary to one of the others who is going to school. Another option is that the child could take the funds out for non-college expenses, but he or she would be hit with the same 10% penalty and taxes owed. If you decide on these educational accounts, you should open a separate 529 plan for each child. An estate planning attorney can help evaluate if a trust is a better option all around. You should also talk to your grandchildren’s parents, as your plans might have unintended consequences for the kids’ financial aid prospects. Be sure you have a solid understanding of other money that may be available to your grandchildren for college. If they inherit the money outright, it’ll also affect financial aid because funds in the child’s name will be considered when financial aid packages are offered by prospective colleges. Reference: New Jersey 101.5 (January 25, 2016) “How you can leave money to your grandkids” #529 #HoustonAssetProtection #HoustonEstatePlanningLawyer #TaxPlanning

The County Treasurer Kurt Prenzler said he was ordered by the probate court to pay the heirs in Mary Petroff’s $1.36 million estate. Four dozen family members from Granite City to Bulgaria will receive the money left behind by the 97-year-old woman who died in 2011. Mary and her sister didn’t marry, and in their 90s, they began to suffer from dementia. Each was appointed a legal guardian. When Anne died in 2009, her estate passed on to Mary. Both sisters lived a modest life. After Mary passed away, the state of Illinois discovered she was a millionaire with no known heirs or will. Prenzler said following Mary’s death, her estate was placed with his office for safekeeping in accordance with Illinois law, which stipulates that unclaimed monies are kept in the county for a period of 10 years before being turned over to the state. However, in Mary’s case, there were people who came forward and claimed to be her relatives. The familial relationship was determined last month by a probate judge. Then the County Treasurer’s Office cut checks for 48 relatives. Mary’s heirs will receive anywhere from about $3,000 to $110,000 from her estate. The largest amount of the estate will be headed to Mary’s relatives in Bulgaria. An attorney who was tasked with distributing the checks for his clients—most of whom are from Bulgaria—commented that the laws regarding estates are different in each state. If Mary had lived in Missouri, mostly likely the distribution would have gone to fewer family members. Reference: The (Alton IL) Telegraph (January 25, 2016) “Treasurer distributes Granite City millionaire maiden’s fortune” #Intestacy #HoustonGuardianship #TrustsandEstates #HoustonEstatePlanning #HoustonWills #Probate #ProbateCourt #Inheritance