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.

For Grandparents raising Grandchildren, What Do You Need?

April 4, 2019

While there are differing reasons for this, ranging from drug use or inability to care for the child, various legal issues arise when grandparents are the primary caretakers.

How a Will Lawyer Plans for Parents with Young Children

April 3, 2019

What would happen with your kids, should something happen to you? It’s a question that most parents don’t like to think about.

What Do Parents Need to Know About Writing a Will?

March 14, 2019

Preparing a will is one of the most important steps a parent can take to protect their family.

What Can You Do If Your Dad Leaves You Out of His Will?

March 13, 2019

There are limited actions you can take, if you’re disinherited.

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 IV

February 28, 2019

Probate is what’s left over At the end of the day, there may be some things left over to go through probate, meaning they didn’t avoid the process by title or contract. What’s so bad about that? I don’t know that there’s anything so terrible about probate. It is a necessary process to transfer title of property if no other options have been exercised. People who I have worked with in the Probate Court are generally helpful and dedicated. The Court imposes deadlines which make the case move through the system. However, the two main reasons people want to avoid the probate court, or any other court process are money and time. I often here attorneys say that probate is not that bad in Maryland. Actually, I only hear attorneys say that. In Maryland there are various court costs, bonding fees, probate fees, and attorney’s fees as well as Personal Representative’s commissions. The highest of these fees are often attorney’s fees. What’s so bad about that? The allowable fees for attorneys and Personal Representatives are combined is about 3.6% of the assets. For example, suppose the deceased person has a house worth $300,000 and a mortgage of $250,000, which figure is used to calculate the allowable fees and commissions? The formula is based on the gross assets, not the net assets. The allowable commissions and fees for a $300,000 probate are $11,880. In this example, the allowable fees are 24% of the net value ($11,880/$50,000). I generally estimate 2% to 4% as the administrative expenses for most families in probate. Additionally, probates ordinarily take somewhere between 9 months and 18 months to complete. If assets are complicated in nature, the time could be much longer. For small Estates, meaning under $50,000, the process can be much shorter. An additional reason some of my clients want to avoid probate is that your Last Will and Testament is a public record. Someone going to the Courthouse can read your Will, see the values of all the assets passing through the court system, learn the timing of distributions, and find out who gets what and when to they get it. This is more information than some many of my clients want to share with the public.

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

How to not pick a guardian

January 29, 2019

Waiting for the perfect answer often leads to no answer at all Picking a Guardian for your children is no picnic. I am an estate planning attorney and have three children. They are now thankfully adults, and I am very proud of them. I am also one of eight children. My wife is one of 10 children. When our children were young, we had a great deal of difficulty trying to figure out who would be the best choice for guardian if we both died. We had many candidates to choose from in our siblings alone. In my 36 years of advising young parents on this topic, I find it is often an emotionally charged “Bone of contention.” I carried a draft will in my briefcase for longer than I care to admit because we could not resolve this problem. Every time the topic came up it was an unpleasant conversation, one that was best left unresolved. That is a good way to not pick a guardian: Avoid the touchy subject altogether. Eventually, we finally figured out that although we couldn’t agree on who should be named the guardian, we could easily agree on who shouldn’t be, which left a short list. I find that this is almost always the case. A couple may not agree on who should be first and who should be second as guardian, but they can usually agree on who should be on the list and who shouldn’t. Making sure that the right people only are involved in the conversation is an important parental act. Imagine for a moment that you have died, and are now a spirit in the room, watching all the people who think that they are supposed to be guardian vying to be appointed. Exactly how would that go? Wouldn’t it be better to have only the people on the short list be in the conversation? We were able to compromise once we got there. It also often helpful to have a third party, such as an estate planning attorney, put in their two cents. Complex issues of ego and family pride that burden the parents are not baggage of the lawyer, at least not for your family. What if your child was at school and needed a ride home, but neither parent was available? Having no one handle the pick up would not seem a viable option, right? What if you were never going to be there? You need an answer to the critical question of “Who raises your child?”: it’s a paramount parental duty. An imperfect plan would be far better than none at all. Waiting for an answer to arrive which “rings true” is another problem. The only answer that rings true is that you are there to see your child grow to adulthood, as I have had the good fortune to experience. Anything short of that won’t seem right. Deciding is great, but not enough. Reducing your choice of a guardian to writing in your Last Will

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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