Avoid These Common Texas Probate Mistakes
A very helpful article in the Wall Street Journal (Survivors’ Biggest Mistakes: Widows and Widowers Often Lose Money Needlessly; the IRA Rollover Penalty) discusses some mistakes that surviving spouses make during probate and estate administration. I think the most important thing the article points out is that estate administration ought to involve more than just a probate attorney. Before a surviving spouse transfers investments, it’s worth contacting a financial advisor and tax professional to make sure that any transfer will not have adverse tax consequences.
To summarize the article, the Wall Street Journal discusses three financial tips for surviving spouses during estate administration. The first tip is to avoid IRA penalties. For example, instead of transferring the decedent’s IRA directly into a bank account or into another IRA, the surviving spouse may consider a “inheritance IRA.”
Another tip is to evaluate the investments in the decedent’s investment accounts. Estate administration may be a good opportunity to evaluate poorly performing stocks, funds or other investments. The surviving spouse may be able to convert those weak investments into something that will do a better job providing income for the surviving spouse.
The final tip discussed in the article involves a fairly technical tip about avoiding estate tax. Current federal law does include an estate tax (sometimes called a “death tax”). However, most surviving spouses will not be affected by the estate tax because there is currently an estate tax exemption of around $11 million per spouse (as of 2018). Basically, the surviving spouse can inherit that first $11 million without estate tax. However, sometimes the surviving spouse doesn’t need the full $11 million exemption but would be able to make use of the unused portion of the exemption for his/her own estate. Under current law, the estate tax exemption of the first spouse to die is “portable” and can be used in the second spouse’s estate. Special elections must be made to take advantage of this estate tax exemption “portability.” The surviving spouse’s financial advisor, accountant, and attorney can assist with this.
Again, the overarching theme of this article is that surviving spouses should consider contacting a probate attorney AND the financial advisor during estate administration. The attorney and investment professionals can help the spouse save money and hassle.
Shutt Law Firm provides probate law, probate alternatives, and estate administration legal advice. If your husband died or wife died in Dallas (or Richardson, Plano, McKinney, or surrounding vicinity) consider contacting probate lawyer Isaac Shutt for a consultation.
Visit www.ShuttLawFirm.com for more information on Wills, avoiding probate, Texas trusts, estate planning, probate, alternatives to probate, and guardianship–or email ishutt@shuttlawfirm.com. You can also call Mr. Shutt at (214) 302-8197 for more information on the topic discussed in this blog or to discuss a different legal matter. Phone-calls and quick e-mails are always free at Shutt Law Firm PLLC. Please consider the Shutt Law Firm if you’re looking for a Richardson lawyer for probate, Richardson wills lawyer, estate planning attorney in Richardson, power of attorney in Richarson, or guardianship attorney in Richardson area.
DISCLAIMER: Nothing in this blog post constitutes legal advice. The information provided herein is merely provided in the spirit of education. If you have a legal question, you should consult an attorney for your specific legal situation. Further, nothing in this blog shall be construed to have started an attorney-client relationship. No such relationship exists until you sign an engagement letter with the Firm.
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