Texas Estate Planning

Houston, Tx Family Tax Relief – Caring For Elderly Loved Ones

As a Mom with 2 kids, a husband and a Mother in law all living in the same home, I am keenly away of the issues that concern the generations above and below us. As an elder law attorney I have the advantage of being able to spend time finding to solutions to those issues. You may not have that flexibility or freedom and Taking care of your elderly loved ones is a difficult task. It can be emotionally difficult, as well as financially crippling.

In honor of tax season, SmartMoney offers some related articles about often-overlooked deductions that might help relieve some of your financial stress if you are providing such care. The first article is titled Tax Breaks for Helping Relatives and the sequel article is More Tax Breaks for Supporting Relatives.

For example, the most obvious way to realize some tax relief is to claim your elderly loved one as a “dependent.” In addition, do you pay for medical expenses? If yes, then there is a deduction for that.

As you might expect, the level of support available under the tax code depends on multiple factors, to include the level of support you provide, the support your elderly loved one needs, and even various programs available in your area.

It may be too late for you to pursue tax relief for tax year 2011. However, now is the perfect time to explore your options for tax year 2012 and plan accordingly.

Regardless, I recommend taking time to read both articles. If this issue does not directly affect you now, it may in the future.

Reference: SmartMoney (March 7, 2012) “Tax Breaks for Helping Relatives”

 

The Ard Law Firm wants to help Houston, Tx families of the Elderly find solutions and peace of mind. Give us a call for a free consults and get on the path to a peaceful solutions.

Houston, Texas Families Should Check Out Charities Before Cutting Check

My grandparents always said a giving heart is easily broken. I try to teach my children to be smart about spending, saving and giving and not to let one bad apple ruin the bunch.

If charitable giving is important to you, you may want to do some investigating to ensure that the charities you support are in good standing with the IRS. Fortunately, a new IRS search tool for tax exempt organizations can simplify this process for you.

While the tool (known as the Select Organizations Exempt Check) isn’t exhaustive, it does offer some helpful information, to include whether an organization:

• Is eligible to receive tax-deductible contributions.
• Had its tax exemption automatically revoked for failing to file a required Form 990, Return of Organization Exempt From Income Tax, for three consecutive years.
• Filed a Form 990-N, Annual Electronic Filing Requirement for Small Exempt Organizations, also called an e-Postcard.

Such information can help a potential donor see an organization as the IRS does. However, the tool is not without some glitches, as addressed in a recent article in the Journal of Accountancy. For example, once an organization is placed on the auto-revocation list (triggered when the organization fails to file a form) it won’t be removed from the list even if the organization re-applies and is re-admitted back into tax exempt status.

With that caveat, the tool provides an excellent means to check the status of a given charity. Nevertheless, if one of your favorite charities is on the auto-revocation list, then you may need to confirm the current standing directly with the charity itself.

For more information, read the original article in The Journal of Accountancy and the IRS news bulletin.

 

For legal advice and counseling on Giving during your lifetime and after death talk to Ard Law Firm.

Houston, Texas Administrivia – Postmortem Paperwork Proliferates

Death and taxes. Benjamin Franklin aptly noted that these are the only two certainties in life. Mr. Franklin perhaps should have added a footnote regarding the paperwork both certainties generate.

A New York Times blog (The New Old Age) recently published a “public service” announcement of sorts titled Death's Companion: Paperwork. The article showcases the experiences of the Foreman family as an object lesson for what one of the family members member termed “administrivia.” This in an appropriate one-word description for one family’s experience with the trials and tribulations of postmortem paperwork and minutia.

Think about it. While we are living, we establish myriad relationships with bureaucracies. Whether the IRS, Social Security, Medicare, banks, hospitals, creditors, social media platforms, car companies or gym memberships, we all have long lists of identification numbers, account numbers, customers numbers, and user passwords. And the list goes on and on. So, what happens when you die? How do all of these relationships end? How many trees must die (in the form of paperwork) to achieve legal and financial closure?

It has been said that a shortcut to wisdom is to learn from the experiences of others. Accordingly, the experiences of the Foreman family provide excellent lessons and the original article provides important pointers for you to consider in your own estate planning.

In short, proper planning is about seeing both the forest and the trees. Be sure to seek competent legal counsel to help you with the big picture when it comes to your own estate planning. However, the difference between the success or failure of any estate plan hinges on careful attention to the details.

 

If you or a family member is having a tough time with Adminstrating post death paperwork, a free consult is only a phone call away. Visit us at the Ard Law Firm, PLLC for a free consult.

Houston, Tx Pet Trust Large Animal – Large “Pet Trust”

Trusts can be remarkably powerful tools to provide for all members of the family, especially the ones most in need of care. This includes four-legged family members that stand “16 hands tall” and are adept at dressage. Yes, trusts can be an essential part of your “horse care” plan, as recently highlighted in The Wall Street Journal article, Stable Value: Putting Your Horse In A Trust.

Horses are not “pets” in the classical sense, as their needs are far greater than those of the family dog or cat. Not only does a horse enjoy a longer life-span, but horses require more wide open spaces, exercise, care, grooming and food. The upkeep on a horse can be rather expensive.

Through a pet trust you can set aside sufficient funds to provide for your horse’s unique needs and ensure his care and safety should you predecease him. Even more significant, you can establish important safeguards to ensure proper deployment of those funds.

Of course, one of the biggest challenges is selecting the proper caretaker of your horse. Would a trusted loved one be willing to serve? Do not assume that charities, shelters or “rescues” would step in to care for your horse. Recent financial difficulties affecting the broader economy have likewise strained the ability for charities and horse shelters to care for horses currently under their care.

Unfortunately, pet trusts are not recognized in every state, but the problem still remains. If you are a horse owner, then your horse is an important member of your family and you must plan accordingly.

To learn more about your state laws and the alternatives open to you (and your horse), be sure to seek competent counsel.

For more information and ideas I recommend reading the original Wall Street Journal article. Be sure to share it with your equestrian friends, too.

 

For more information on Houston, Tx Pet Trust visit our website!

Maximizing Gift Tax Exemption May Loose Monsters

Lately, writing about estate law is a lot like writing commentary on a monster movie. This estate law “monster” should be known as the dreaded “Unknown 2013.” It’s the unseen and unknowable creature that lurks just after the upcoming election, after the expiration of current laws, and, most ominously, just after the fall of the New Year’s globe in Time’s Square. But that’s not the sole monster on the loose. No, its terrible twin should be known as dreaded “Clawback” on 2012 gifts.

The legal community itself is not entirely certain what Clawback is, if it actually will rear its ugly head, or just how to plan for it, but it’s nonetheless an instructive concept. The latest warning came out over at Forbes and so I thought it was worth sharing.

As a monster, the Clawback is something of a ghost in that it haunts people from the grave and does so because of decisions made during life, and yes, it is the offspring of the Unknown 2013. To drop the comparison, “Clawback” is the effect of estate laws that unify the gift tax exemptions and the estate tax exemptions, and the other estate laws that change those amounts based on Congressional whim or the party in charge during that cycle.

For example, if you made a mega gift in 2012 and under 2012 laws (the lifetime gift tax exemption is $5.12 million this year), but then died in 2013 and under 2013 laws (the “default” is $1 million) when the exemption may be much lower, then you may have used up the entire exemption simply because the laws keep changing! And, to make matters worse, the taxes will kick in and “clawback” those assets that were gifted upon the beneficiaries of your largesse to pay for the tax that was generated at death. That’s bad enough, but what if yours is a blended family? What if the beneficiary inheriting your estate at death and paying the estate tax was not the same beneficiary receiving your mega gift while you were alive? What if your “inheriting” beneficiary and your “gifting” beneficiary don’t like one another? That’s an unfortunate tinder box.

It is hard to pin down whether these twin monsters will show up and, if they do, what form they will take (they are master “shape-shifters”).

The point is that there are ways of planning that avoid this potential pitfall. If you’re savvy enough to take advantage of 2012 gift laws, then you’re savvy enough to see your planning through.

Reference: Forbes (March 12, 2012) “Should Threat of Clawback Discourage 2012 Mega Gifts ?”