How Can Generation X Find a Money-Life Balance?

May 15, 2019

You can achieve your money-life balance with savings strategies.

Estate Planning Lesson: Fame Doesn’t Prevent Battles

May 10, 2019

Wicked stepmothers are the stuff of Grimm’s fairy tales. Widowed stepmothers are the root of real-life inheritance wars.

Intestate Succession and its Fallout

April 16, 2019

Truly, nearly every legal question depends on a host of facts and circumstances that make it impossible to guarantee a particular outcome … except in the case of my favorite question: ‘Do I need a will?’

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.

Scams at Death Include Stealing This House

April 10, 2019

Complaints about stolen homes have shot up from 44 in 2013 to 136 in 2018, according to the city Department of Records. The department is making changes to its security system in the aftermath of the Inquirer stories, but it declined to detail the upgrades, fearing it would tip off scammers.

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

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

Passing on Assets? Perhaps Some Can Be Given Away

January 28, 2019

Want to make a big impact? Consider passing on some of your assets through charitable giving. While many people transfer their assets to the next generation, there are many who want to give some, or even all, of their assets away through charitable giving. That can make a big impact, according to MarketWatch in “Giving your money away when you die: 10 questions to ask.” If you haven’t thought about charitable giving or estate planning, these 10 questions should prompt some thought and discussion with family members: Should you give money away now? Don’t give away money or assets you’ll need to pay your living expenses, unless you have what you need for retirement and any bumps that may come up along the way. There are no limits to the gifts you can make to a charity. Do you have the right beneficiaries listed on retirement accounts and life insurance policies? If you want these assets to go to the right person or place, make sure the beneficiary names are correct. Note that there are rules, usually from the financial institution, about who can be a beneficiary—some require it be a person and do not permit the beneficiary to be an organization. Who do you want making end-of-life decisions, and how much intervention do you want to prolong your life? A health care power of attorney and living will are used to express these wishes. Without these documents, your family may not know what you want. Healthcare providers won’t know and will have to make decisions based on law, and not your wishes. Do you have a will? Many Americans do not, and it creates stress, adds costs and creates real problems for their family members. Make an appointment with an estate planning attorney to put your wishes into a will. Are you worried about federal estate taxes? Unless you are in the 1%, your chances of having to pay federal taxes are slim to none. However, if your will was created to address federal estate taxes from back in the days when it was a problem, you may have a strategy that no longer works. This is another reason to meet with your estate planning attorney. Does your state have estate or inheritance taxes? This is more likely to be where your heirs need to come up with the money to pay taxes on your estate. Maryland has a 10% tax for gifts to people who are not close relatives. This would include nieces and nephews. There is no such tax on life insurance proceeds. Your decisions of “Who gets what” can include significant tax consequences. A local estate planning attorney will be able to help you make a plan so that your heirs will have the resources to pay these costs. Should you keep your Roth IRA for an heir? Leaving a Roth IRA for an heir, could be a generous bequest. You may also want to encourage your heirs to start and fund Roth IRAs of their

What Happens if I die without a will?

January 7, 2019

Estate problems can sometimes lead to a fractured family. We speak to many people who believe that if they die without a will, everything goes to the State. This is almost never the case. “Dying intestate” is the term used to describe the legal status of someone who has died without a will. The laws of your state law will then dictate what happens to your assets. Most of your tangible possessions will be distributed following probate. If your estate is complex, for example, and you own property in more than one state, the process will take a long time and the costs can be high. With a will, you can control who gets what, when they get it, and who is in control of the process. Without a will (or possibly a Revocable Living Trust), you have a plan, drafted by your legislature, but forfeit the right to decide these things. Some of your assets do not pass to heirs through a will. Jointly titled assets pass by title regardless of what your will might say. Other assets usually transfer at death by the contract that controls the asset, such as retirement accounts, life insurance policies and annuities. All accounts that have named beneficiaries go directly to the people who are named. If they predecease you, then the contingent beneficiary receives the asset. The companies do not care what your will instructs. Reconsidering your joint ownership decisions and beneficiary designations are important parts of reviewing your entire estate plan. If you name only your son as the beneficiary for your insurance policy, then later welcome a daughter into your family by birth or adoption, you’ll want to add her as a named beneficiary as well. Otherwise, when you die, only your son will receive the proceeds. Anytime a life event occurs—births, deaths, divorces, marriages—is the right time to review your beneficiary designations. You can make these changes when you are living. When you die, the designation is irrevocable. A will—and an estate plan that is updated regularly—can prevent surprises and ensure that your choices are honored. Family members can end up feeling mistreated by the distribution of an estate. However, a good estate plan can help prevent those hard feelings from developing, according to the Observer-Reporter in “Improper estate planning can lead to familial conflict.” Keeping that plan current can lessen the trauma of something happening by oversight instead of intention. Here’s a celebrity story that serves as a perfect example. A famous father made his third wife his executor and gave her total control over his business, despite the fact that his son was equally famous and the top executive in that business, as well as its public face. The son was baffled when he learned that the third wife now controlled the business, including the rights to his own name. When the father died, a long, expensive and unpleasant estate battle began. The son was Dale Earnhardt Jr. An estate planning attorney can advise you in creating

Reviewing Your Estate Plan in January

January 2, 2019

Put away the estate plan when it is completed. However, take a good look at it frequently. There are many reasons why an estate plan needs changing, because your life changes as do your goals, according to the Times Herald-Record in “5 steps to securing your elder estate plan.” What might be some of those changes? It could include your divorce, your marriage or even the marriage or divorce of your children. It can also be that your financial situation has changed, and you need to make changes. A ten-minute review at the beginning of a New Year will be an annual reminder, and can verify that you are still on the right course. The process of review may seem challenging but here are some steps to consider: Step One: gather up all your documents, which may take some time. This includes your will, powers of attorney, health care proxies, living wills, any trusts and any other documents. For clarity, here are some definitions. A will is the document that states where you want your assets to go when you die. It is reviewed by the court in a proceeding called probate, but only after your death. Assets in a living trust (or other types of trusts, depending on your situation) do not go through this process. Creating a trust results in a legal entity that owns the assets it contains. The trust assets go to beneficiaries upon death, as directed by you to the trustee. In many instances, trusts save time, money and avoid litigation over inheritances. Powers of attorney name the person you appoint to make any legal, business or financial decisions for you, should you become incapacitated. A health-care proxy names the person to make your medical decisions, if you are unable to do so. Living wills are used to express your wishes for end-of-life care. Step Two: review your documents. Make sure that everything is signed. You would be surprised how many important documents aren’t signed. Read the documents to see who was named as the executor of your will and who is the trustee of your trusts. Are those people still able to undertake these responsibilities? Do you still want them making decisions for you? Step Three: make a list of all of your assets. Note how they are titled—what names are on the accounts—and what are the values of each. Include retirement accounts like IRAs, 401(k)s, insurance policies and annuities and check to see if you named a beneficiary. Do you still want that person to be the recipient of the asset? Make sure that you have also named a contingent beneficiary. Step Four: what information would your loved ones need should you become unable to communicate? They’ll need information about your medications, the name and contact information for your primary care physician, your estate planning attorney, your CPA and your financial advisor. You may want to arrange for a “family meeting” with your healthcare team and your legal and financial team (two separate

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