Blogs from April, 2022

Blended families have unique estate planning needs. If you have remarried and have stepchildren, it is important to take steps to ensure that your estate plan is comprehensive and takes into account the unique needs of your blended family. As a blended family, you will need to take a few extra steps in your estate planning process to ensure that every family member is accounted for. To guide you through this process, our Dallas-Fort Worth estate planning attorneys have put together the tips to help you create a comprehensive estate plan for your blended family.

Estate Planning Tips for Blended Families

As a blended family, you have the unique opportunity to create an estate plan that meets the needs of all of your loved ones. Here are a few tips to help you get started:

Tip #1: Talk to Your Spouse About Your Estate Planning Goals

It is important that you and your spouse are on the same page when it comes to estate planning. Take some time to discuss your assets, debts, and any other financial matters that will need to be taken into account in your estate plan.

Tip #2: Create a Comprehensive List of All of Your Assets

This list should include not only property and financial assets, but also sentimental items that you want to ensure go to specific family members. You should also consider leaving some assets to your biological children upon your death. There is no guarantee that the surviving spouse will share assets with their non-biological children.

Tip #3: Consider Setting Up Trusts

Trusts can be a helpful tool in estate planning, particularly for blended families. Trusts can help to protect assets and ensure that they are distributed according to your wishes without a lengthy court process. You should consider a trust that leaves assets to your spouse for their lifetime, but that has a balance that will be passed to your children after their death. Trusts are a must for blended families as they also avoid the mandatory "contest period" that comes with using a Last Will & Testament.

Tip #4: Decide Who Will Make Health Care Decisions

Every comprehensive estate plan should include a health care directive. This will allow you to name one person to make health care decisions on your behalf if you were to become incapacitated. Will you want your surviving spouse to make decisions? Your step-children or biological children? These are questions you should consider when drafting your estate plan.

Creating a comprehensive estate plan can be complex, especially for blended families. Get in touch with our team today at (972) 945-1610 to learn how we can help you!

The original SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019) became law on December 20, 2019 and changed laws related to tax-advantaged retirement accounts.

See our previous articles on SECURE 1.0 here:

• The End of the Stretch IRA and More
• What Does the Secure Act Really Mean to Me?

There is now a new SECURE ACT 2.0 being proposed.

The House approved SECURE 2.0 in a 414-5 vote on March 29, 2022 (see H.R. 2954).

The Senate has not approved the act that the House passed. In the Senate, there is a similar (but different) bill currently in the Finance Committee pending a vote (see (S. 1770).

Some highlights that are currently in either the House or the Senate version are as follows:

• Creating a way to find “lost” retirement savings accounts (it turns out many people have forgotten about some of their old retirement accounts). The Department of Labor would be required to create a national online lost and found database for retirement plans.
• Allowing certain part-time employees who work at least 500 hours for two years to be eligible for their company 401k plans.
• Provisions making it easier for companies to contribute to 401k plans on behalf of their employees who are making student loan payments instead of contributing to their 401k plans.
• Automatic enrollment in 401k plans, which would require companies to automatically enroll employees in 401k plans at a rate of at least 3% and then increase each year until employees are contributing 10% of their pay.
• Increasing the amount allowed to be contributed as catch-up contributions (Example: as of today, someone 50 years old or older can make catch-up contributions to their retirement savings in addition to the standard annual contribution limits of $20,500 for 401(k) plans and $6,000 for individual retirement accounts in 2022. Currently, a catch-up contribution of an extra $6,500 in a 401(k) or $1,000 in an IRA is allowed.)
• The SECURE ACT 1.0 changed required minimum distributions to begin at age 72 instead of age 70 ½ . SECURE 2.0 is proposing mandatory distributions wouldn’t have to start until ae 73 in 2023; age 74 in 2030; and age 75 in 2033.
• Changes to the Required Minimum Distribution (RMD) penalty. Currently, if you don’t properly take your full RMD, you are taxed with a 50% tax penalty. The proposed change makes that penalty a 25% tax with the option to timely correct the issue with only a 10% tax penalty.

Crain & Wooley will continue to update our clients as more information becomes available. Our next client quarterly webinar is coming up in June. Keep your eyes out for the registration invitation.

When you designate someone to be your executor in a will, you are giving them a huge responsibility. This person will be responsible for wrapping up your affairs after you pass away. This can include paying off debts, distributing assets, and handling final arrangements. It is important to make their job as easy as possible by providing them with the necessary information and documents. In this blog, we will discuss some tips on how to do just that.

What Is the Role of an Executor?

An executor of a will is someone who has been chosen to implement a deceased person's last will and testament. The executor's most essential responsibility is to follow the decedent's instructions to administer their assets and desires. If you plan on creating a last will and testament, you will need to determine who should be your executor. You can take proactive steps now to help your executor and loved ones in the event that you pass away.

Tips to Help Your Executor

First and foremost, you should keep all of your important documents in a safe and secure place. This could be a locked filing cabinet, a fire-proof safe, or even a safety deposit box at the bank. Your executor will need access to documents like your will, financial records, insurance policies, and property deeds. By keeping them all in one place, you can make their job much easier.

In addition to keeping physical copies of important documents, you should also create an online login or security measure that gives your executor access to your digital assets. This could include things like social media accounts, email accounts, online banking information, and cryptocurrency wallets. Again, your goal is to make this information easily accessible to your executor.

If you have any questions about estate planning or need help getting started, please contact our team at Crain & Wooley. We can help you create a comprehensive estate plan that will protect your loved ones and your assets.

Get in touch with our team today at (972) 945-1610 to schedule a consultation!