Houston Estate Planning Law Blog
HOW GOING PAPERLESS IS CHANGING ESTATE PLANNING FOR THE FUTURE
We’re moving away from a paper driven society. Now, this may not be a new statement, but it’s surprising to find out how many people take this information for granted and an increasingly digital society would raise a few concerns than it is. Case in point: what happens to your digital assets after you pass?
Estate planning has seen this question come up time and time again in the past few years as more and more people are beginning to realize that a majority of their information and assets could be lost to cyber space if they were suddenly to kick the proverbial bucket tomorrow.
So what are experts suggesting people do as far as planning when it comes to their digital assets?
Although a majority of your digital assets may only hold personal or sentimental value-like family photos or the recording of your daughter’s first ballet recital-some of your more valuable assets, such as bank account and other financial assets, may be stored digitally. Automatic bill pay, though convenient now, could pose a problem down the road when it comes to dividing your assets to beneficiaries.
To avoid a lot of problems in the future, many experts suggest writing down any usernames and passwords and including them in your will; that way, in the event of your passing, your loved ones can have access to the same information that you were privy to in life. Be sure to also discuss with your estate planning attorney what can and cannot be included in your will when it comes to your digital assets. Though some states may have small laws that cover digital assets, others may not.
As our society pushes further away from the use of paper, we open ourselves up to a plethora of issues. And without the legal system on par with our advances, this can often times leave us wondering what we’re able to pass on to future generations or not.
Source: Investing Daily, “Securing Your Digital Assets,” Bob Carlson, Jan. 15, 2013
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HOW IS TURMOIL IN DC AFFECTING THE ESTATE TAX IN TEXAS?
Since the recession, and probably sometime before it became more than just a few-year-slump, Texas legislators have been considering the very real possibility that the federal government may not be able to give them the necessary funds in order to balance their hefty budget.
So far, funds provided by the federal government account for more than a third of the state’s budget; but what if that money dried up? How would Texas legislators be able to subsidize an approximated $64.7 billion loss?
According to a bill introduced this month by Rep. James White, R-Hillister, the answer may be to bring back the state’s estate tax. Although calculations suggest that by re-instating the tax, the state would collect between $62 million and $317 million over the course of 2013, an increase in estate taxes could mean a significant decrease in the amount of money some people intend for their beneficiaries.
Though many Texans agree that weaning themselves off of federal funding could save them a large headache if there is another financial crisis from Washington D.C. in the future, they also point out that in the majority of cases that would be affected by the tax hike, the estates being given to beneficiaries would be going to people may be suffering financially. The additional money that would be spared because of an absent estate tax could mean a bigger difference than it would to the state government.
Although other state legislators are praising Rep. James White, R-Hillister for his efforts to protect Texas financially in the event of Federal financial turmoil, some people in the community urge representatives to reconsider the impact this will have on people and their beneficiaries.
Source: The Dallas Morning News, “Rep. James White files ‘Texas Self-Sufficiency’ bill to analyze reliance on federal funds,” Claire Cardona, Jan. 22, 2013
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THINGS TO THINK ABOUT WHEN PLANNING YOUR WILL
Although this may seem like old news to many people here in Texas, it’s surprising to see how many people do not plan for their estate until it’s almost too late. Some of us feel the morbidity of it all-writing a will while you’re still in your prime-but others haven’t begun writing their wills because they simply don’t know where to start.
Most people usually start seriously considering a will when either someone close to them passes or they are told that they have a serious medical condition that could greatly reduce their time here on earth. No matter what gets you to start thinking about estate planning, sometimes people get so worried about ensuing arguments over their estate decisions that they put off making a plan to avoid the headache.
For those who find themselves in this situation, some estate planning exerts will advise you to calm your anxieties by simply thinking about one simple thing: give to those who you hold dear. Once you set aside the daunting idea of separating your belongings and financial assets equally amongst your beneficiaries, you allow yourself the freedom to show how much you cared about someone through the act of giving.
A majority of people, when planning their wills, focus most of their efforts on dividing their estate, often times completely forgetting about including their medical wishes as well. They’re another important part of any will that not only help ensure that your burial wishes are followed but help give directions to family members on how to follow through with your wishes.
Source: The New York Times, “In Writing Her Will, It’s the Little Things That Matter,” Laura Holson, Nov. 13, 2012
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HOW DID THE FISCAL CLIFF AFFECT OUR TAXES FOR 2013?
When talks of the fiscal cliff began, a majority of people across Texas, including just about everyone else in the United States, worried about how the expiration of the Bush-administration tax cuts would affect their earnings in 2013.
For months, Congress has been in a headlock over how best to approach the new budget and with neither side budging, even hours before the ball drop, the world looked on with anticipation to see how it would all turn out.
But in the wee hours of the morning on Jan. 1, Congress and the president came to a tentative decision that could have considerable impacts on how much money a majority of people will see paid out in the upcoming year. This is especially true for those people who may have waited until after the fiscal cliff to do any sort of estate planning.
According to the federal government, taxpayers will continue to pay the current tax rates. However, it’s good to point out that although tax rates will be staying the same, take-home pay will likely be less than anticipated because of the expiration of the 2 percent reduction in Social Security tax.
With a series of other tax rates increasing by about 5 percent across the board, many Americans fear there may not be a silver lining when it comes to the amount of money they will be able to leave their beneficiaries after they pass. The good news may be that the estate tax exemption will continue to remain at $5 million-adjusted for 2013 inflation, of course, to just over $5 million. Even though the estate tax rate will be increased from 35 percent to 40 percent, this will only take affect after a person’s estate has surpassed the $5 million exemption. Though it may appear to be a small silver lining, this may actually be good news for people who expected much worse.
Source: Forbes, “Secrets Of The Fiscal Cliff Deal,” Tony Nitti, Jan. 2, 2013
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