How Should I Choose a Trustee?

July 18, 2019

Do not put off finalizing and signing your estate planning documents just because you have reached an impasse on who to name as trustee.

What Do I Need to Know About Living Trusts?

July 9, 2019

A trust can be a vital component in an estate plan.

Will My Children Fight Over My Estate?

June 11, 2019

My mom wants to leave her house to me, since I’m the only girl. My brothers may try and contest this in probate court. What can my mom do to be sure I receive ownership of the house upon her death?

What is the Best Way to Leave an Inheritance to a Grandchild?

April 17, 2019

While everyone from brand new parents to great grandparents can benefit from the advice of a competent estate planning lawyer, frequently the individuals making sure that their affairs are in order, are those in their golden years. They have a common concern: what about their grandbabies?

Beverly Hills 90210 Star Luke Perry Had an Estate Plan

April 11, 2019

Fortunately, Perry’s foresight to do proper estate planning, meant that the tragedy was not made worse for his family.

What is the Right Age to Inherit?

March 8, 2019

What is the right age to inherit? You were pretty mature at 18, right? How old should a young person be before they receive a completely uncontrolled distribution of their inheritance? We ask clients that question many times in a given week, as it is an important component to just about every Will or Revocable Living Trust that we draft. The older I get, the older I think someone should be before they are mature enough to handle money. I used to say 25 was the right age. Now its 30 to 35. The concern is that many millennials today are delaying reaching typical milestones for measuring adulthood. Researcher Lydia Anderson of the National Center for Family and Marriage Research at Bowling Green State University compared U.S. Census data from 1980 with the most recent American Community Survey data from 2015. Comparing 25- to 34-year-olds in 1980 with the same age group today, Anderson found that far fewer millennials are married, live away from their parents, have children of their own, or own their own houses than the baby boomers of the same age group the year Ronald Reagan was elected president. See https://www.breitbart.com/politics/2017/04/05/study-millennials-delaying-entry-adulthood/ The delay in reaching these thresholds of adulthood is evident. Maybe they are just smarter than I was about being in a rush to grow up. However, counterbalance that with the human tendency to always think the younger generation is less able than yours to handle the world. “The beardless youth… does not foresee what is useful, squandering his money.” Horace1st Century BC “The free access which many young people have to romances, novels, and plays has poisoned the mind and corrupted the morals of many a promising youth…” Memoirs of the Bloomsgrove Family, Reverend Enos Hitchcock1790 For an interesting collection of more of these, See “The 2,500-Year-Old History of Adults Blaming the Younger Generation” https://qz.com/quartzy/1264118/the-2500-year-old-history-of-adults-blaming-the-younger-generation/ For me, when I reached age 25, I had graduated from law school, paid for my own college and law school (with a few loans), been admitted to practice law in Maryland and the District of Columbia, and was married. I think I was a responsible 25-year-old. However, I had no real experience handling money and had no idea what raising a family would cost. My life experience then was sharing an apartment two roommates, paying for school and making a car payment. That’s why I lean toward older: its not the level of maturity only, but also the financial experience that should be taken into account. What is the right age? In making this or any other estate planning decision, I think it’s important to bear in mind that doing something is always better than doing nothing. You already have an estate plan, even if you haven’t signed a Will. If you die without any planning, uncontrolled use will be made to a minor person when he or she reaches the age of 18. In my life, that would be the worst possible age to pick. Any older choice is

What is Probate and Should you Avoid it? Part V

March 7, 2019

Probate is what’s left over When someone dies, property will be transferred from them to someone else by Title or Contract. One form of trust transfer is a Revocable Living Trust. When I think of a Trust, I picture a “Box” to take the title of the property. Assets transferred into the trust, or “Funded into the Trust”, do not need to be transferred through the probate process, because the death of the Trust creator does not affect the title of the property. The idea is to put the property into the box while you are alive. If you do so, where is the title when you die? It’s in the Trust, just as it was before death. Probate is not needed to help change title. However, a Living Trust is not a magic box. It will only avoid court for assets that are transferred to it. To avoid Court, you must do work: you need to dedicate the time, effort and persistence required to transfer the titles. For most banks, account numbers stay the same. The checks don’t need to say “Trust” on them as long as the statements do. The account will still be in your social security number, as the trust is not separate taxpayer while the Grantor is living. Not all assets get funded into a Trust. Assets such as Life Insurance, retirement plans, deferred compensation accounts, thrift savings plans, and annuities are handled by beneficiary designation and are not transferred into a revocable trust. Automobiles are not usually transferred into a Trust. We estimate that most of our clients spend 20 to 30 hours on the funding process, mostly in filling in new account forms and waiting for bank personnel to figure out how to do what you are asking. You can take consolation in this: if you don’t go through this effort, your chosen loved one who is named executor will be doing so. A large part of the gift a trust represents to the family is that you spend the time and effort, so they don’t have to. It also means revising deeds so that the titled owner is the Trust. When someone dies, we meet with the successor trustee, and are focused on what the titles say, and who are designated beneficiaries on the contracts. That is where the rubber meets the road. What if things are missed. We create a short will, called a “Pour over Will” to catch loose ends which get missed in the funding process. The Will simply says “Put the probate assets into the trust” in legal mumbo jumbo. To use this type Will, you need to go to the probate court and open a probate filing. In Maryland, for estates of under $50,000, the process is relatively simple and is often opened and shut on the same day. A significant added bonus to a living trust is that is works very well to allow management of assets if you are no longer able to do so. But

What is Probate and Should You Avoid It? Part II

February 14, 2019

Probate is what’s left over I draw about ten frying pans a week on a legal pad. This is not due to my great artist ability. Last week I explained that Wills work through a process called Probate. When someone dies, property may be transferred by title, such as the transfer of a house to a spouse when the first spouse dies. It is easy and essentially automatic. If a person dies and the title doesn’t convey ownership, then a contract may do so instead. More about that next week. There are only three ways assets transfer at death: By Title, by Contract, or by Probate. If the title and contract don’t transfer ownership, then a probate estate does. If a decedent as a will, this is activated then: if not, then the law of the state of they lived in writes one for them. Since the dead person is not here to transfer title, that role is given to the Personal Representative. Once appointed, that person can sign contracts, deeds, tax returns, etc. All this is done with the oversight of the probate Court. Probate is not bad: it serves a necessary function. Many year ago, I was part of a bar association discussion years ago about probate and its avoidance. I was advocating the use of Revocable Living Trusts as reasonable alternatives to Court supervised transfers. I felt like a baby harp seal hunter at a PETA meeting. The outrage and venom directed at me for suggesting that Probate was to be avoided” were palpable. Most of the lawyers present, and the then Register of Wills, insisted as a strong refrain that “Probate is not that bad…” The only people I have heard insist that this is true are attorneys and Probate Court personnel. I pointed out the hypocrisy of this by position by asking “How many of you have your life insurance policies and/or retirement plans payable to their probate estates?” Of course, no one did so, because naming a beneficiary was simple and the probate Court could be avoided. If probate isn’t so bad, then why no? Maybe because of administrative fees, Court costs, Attorney fees, Personal Representative Commissions, which in Maryland can be 3.6% to 4%. Maybe because the court process can cause long delays before funds are available: from seven months to several years is not unusual. Finally Probate records are public, meaning that your neighbor can go to the Court, read your will, find out who is getting what, when they get it, and who is in control. For some of my clients, keeping this private is preferable. Is short, probate is time consuming, expensive and is completely public. The Court process provides supervision, which is some cases is badly needed. Most of my clients name people that they trust and don’t want supervised. To weigh out your options, its best to seek the advice of an estate planning attorney. Note: This is the Second of a Series of Five to be published

Don’t Fall for Estate Planning Myths!

February 6, 2019

Your work isn’t done just because you have a will. There are many myths floating around about wills, trusts and estate planning. Those myths can easily confuse people who haven’t taken the time to bust them, before getting on to the real work … taking care of the family, according to the Cleveland Jewish News in “Estate planning myths common, but debunkable.” One common myth is that a trust is completely creditor protected. While there are some trusts that achieve this goal, there are many that don’t. It is easier to provide that to your beneficiaries that to yourself. Another myth is that once an estate plan is completed, there’s no need to revisit or make changes. We look at the planning you put in place as essentially an ongoing rough draft. Perhaps the biggest myth around estate plans is that they are only needed by wealthy people. Actually, everyone needs a will. A property power of attorney can save your loved ones thousands of dollars and massive aggravation. People chat with their friends and neighbors and pick up snippets of information, which is usually incorrect. As with any kind of story, once a piece of information has moved through a few different people, it becomes confusing, even if it started out accurate. The value of such “Street lawyers” is usually what you pay for it. Unless it comes from an estate planning attorney, don’t get any legal advice at a neighborhood or family gathering. The results can be disastrous. If you think having a trust alone is enough to prevent your heirs from having to pay any taxes, your kids will be in for a big and expensive mistake. If you don’t set up guardianship for your minor children, then the court will appoint a guardian. It’s entirely possible that it may be a person you would never have wanted to raise your children. If a separate financial trustee is not named, there won’t be any checks and balances on how the money left for your children is spent. If you don’t have an estate plan in place, and especially if your family includes minor children, make an appointment to speak with an estate planning attorney who can advise you on an estate plan that fits your unique circumstances. Reference: Cleveland Jewish News (Sep. 20, 2018) “Estate planning myths common, but debunkable”

A Revocable Living Trust Might Be a Good Fit

January 24, 2019

There are many kinds of trusts. They aren’t just for the wealthy. Our practice has featured the preparation of wills and trusts exclusively since 1995. In the intervening years, we have prepared thousands of each such plans, and now work extensively implementing them after a client has died. Our caseload is now about 45% administration of wills and/or trust. We are often asked by clients which is better. That depends on many factors. But Trusts seem like a much better choice often, after the time comes to use the planning. If maintained and funded, a trust can be more cost effective, private and easier to administer. On the other hand, I know many attorneys who scoff at the notion of using a trust for people who are not millionaires. Probate, they often assure, is not so bad. And is a trust necessary? Everyone needs an estate plan. However, everyone should also at least consider a trust, according to The New York Times in “Life After Death? Here’s Why You Should Have a Trust.”It turns out that many people who are not wealthy, can also benefit from having a trust. There are many different kinds of trusts which serve different purposes. One is a revocable trust, which the owner can change. They are considered by many to be the “work horse” of modern estate planning. A revocable trust can avoid the need for a public probate court proceeding after the person dies, saving time and keeping money from being immediately available to heirs and executors alike. Trusts are also useful for times when people become incapacitated and need someone else to take care of their finances. Because many more people are living longer and the number of people with dementia is increasing, there are more situations where trusts are useful to the family and caregivers. A will is different than a trust and is a public document. The probate process requires a disclosure of assets, bank and other financial accounts and the names of beneficiaries. That information remains private with a revocable trust. Other considerations regarding trusts: You should have any type of trust set up by an estate and trust attorney. A house, real property, bank or investment accounts can be placed into a trust. A revocable trust does not always end at the death of the original owner. However, just how long it may last, depends upon the laws of your state. People also use trusts to protect their assets from others or to assure the long-term care of someone who is disabled. You can have a professional manager, family member or friend as a trustee or co-trustee of a trust. Sometimes having a licensed professional who has federal reporting requirements can provide an extra layer of protection. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include taking a close look at trusts. Reference: The New York Times (March 22, 2018) “Life After Death? Here’s Why You Should

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