Why Do I Need a Will? Annapolis and Towson Estate Planning

J.P Morgan Wealth Management’s recent article entitled, “Estate planning: Why everyone should have a will,” explains that your Will doesn’t just control who gets your money; it also controls when they get it and who’s in charge of the process. For those with young children, a will is also the only place where you can tell a judge who should be your children’s guardian if something happens to you, and you have no spouse — or if something happens to both of you at the same time.

A will is a legal document that determines what happens to your assets and liabilities after you pass away. This includes your money, real estate, other investments, personal belongings, collectibles, autos and more.

If you have children, it permits you to designate guardians if your children are under 18.

A will can even include funeral arrangements. However, you should note that it may take time for your family to locate your will, so you may want to state the wishes for your funeral in a separate document.

Among other things, with a will, you can:

  • Determine who inherits your assets;
  • Decide under what conditions your heirs can control their inheritance;
  • Designate guardians for your minor children; and
  • Decide who will be in charge of overseeing your estate until your heirs receive their inheritance.

Estate planning is the process of preparing for what happens after you die (and potentially for any incapacity beforehand).

This entails not only drafting your will, but also how you own assets (asset titling), who can make decisions for you if you’re unable to make your own decisions, and what kind of legacy you want to leave.

This may involve the help of an experienced estate planning attorney who can help crystallize the issues you should consider and guide you to a strategy once you’re clear on your goals and objectives.

If you don’t have a will that details the distribution of your assets, state law will do this for you.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: J.P Morgan Wealth Management (Jan. 27, 2023) “Estate planning: Why everyone should have a will”

 

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Read more about the article What Makes Americans Worry about Estate Planning? Annapolis and Towson Estate Planning

What Makes Americans Worry about Estate Planning? Annapolis and Towson Estate Planning

Because of the extreme rate of inflation, which hit 6.5% in 2022, more of us are worried about estate planning than ever before, according to the annual Wills and Estate Planning Survey from Caring.com.

SI Live’s recent article entitled, “More young adults are creating wills because of COVID-19, inflation, survey says,” reports that roughly 20% of survey respondents said they believe an estate plan is now more important because they worry about how inflation will affect their heirs’ financial future. More than one in 10 said inflation changed their view on estate planning because they see their assets, such as real estate, as more valuable than in the past.

However, 9% of survey respondents said they feel inflation reduced the value of their assets, creating less of a need for estate planning; and 7% said they had to sell many of their valuable assets to keep up with the cost of inflation in their day-to-day lives.

Although 64% of Americans think having a will and an estate plan is important, only about a third (34%) of Americans have a will or an estate plan. Caring.com found younger Americans are 63% more likely to have an estate plan in 2023 than compared to 2020 – and more than a third said inflation made them realize the need for an estate plan.

Sixty-three more young adults aged 18- to 34-year-olds have estate planning documents than the same age group did in 2020, because of inflation, according to the results. This makes young adults almost as likely as middle-aged adults to have an estate plan. According to the survey, the coronavirus (COVID-19) pandemic had a significant impact on young adults wanting to create an estate plan, with the number increasing by 69% between 2020 and 2021.

Just 32% of Americans age 55+ said inflation changed their mind about estate planning. However, older adults have an overall higher rate of already having a will. The 2023 Wills and Estate Planning Survey found 3% more Americans have a will in 2023 than last year – from 33% to 34% — and 6% more Americans have a will than in 2020.

A total of 42% of Americans said they haven’t created a will because of procrastination. One in three people said they don’t have an estate plan because they don’t think they have enough wealth to leave behind when they die.

Everyone should consider estate planning. Ask an experienced estate planning attorney for assistance.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: SI Live (March 3, 2023) “More young adults are creating wills because of COVID-19, inflation, survey says”

 

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Key Components of an Estate Plan to Tackle First – Annapolis and Towson Estate Planning

Despite the importance of estate planning, not everyone takes the time to make an appointment with an estate planning attorney and get it done, according to a recent article from Think Advisor, “6 Trust and Will Considerations That Can’t Wait.” Having an estate plan, including a power of attorney for yourself or an older family member is necessary to avoid a more contentious and expensive alternative: guardianship.

If an elderly family member is showing signs of dementia, the power of attorney needs to be done as soon as possible. Capacity doesn’t get better over time, only worse, and once someone is fully incapacitated, the only option is guardianship.

Wills aren’t just for wealthy people. Anyone with even a moderate estate needs a will. Young people often claim they don’t need a will because of their age. However, young and old people die unexpectedly.

Putting a will in place is particularly important for people who want to leave assets to their “chosen” family, those who may be outside the traditional nuclear family but who are for all intents and purposes, their family. Without the benefit of marriage or kinship, chosen family members do not have any legal right to inherit and will not be considered in any property distribution.

Having a will saves heirs from pain and confusion. If you don’t have a will, the court will make decisions for property distribution and guardianship for any minor children according to the laws of the state, which may not be what you had in mind.

Planning for incapacity is part of an estate plan. Designating a Medical Power of Attorney, Financial Power of Authority and HIPAA Authorization giving a trusted person access to medical records and treatment decisions are best done before there’s an emergency.

Guardianship is not something most people want to deal with, and planning can avoid it. Guardianship at its essence is a legal process effectively stripping a person of the right to act on their behalf and must be approved by a court.

It is often required when the loved one is unable to act responsibly or is undermining their family’s ability to act in their best interest under the power of attorney. However, there are many legal landmines in guardianship. The legal process can become contentious, especially if family dynamics are toxic.

Advance planning saves time, money and heartache. The Power of Attorney gives the person named as agent the right to take care of legal and financial matters in the event they can no longer do so for themselves. An estate planning attorney can create a power of attorney to meet your specific needs, either as broad or as narrow as desired.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Think Advisor (March 2, 2023) “6 Trust and Will Considerations That Can’t Wait”

 

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Read more about the article Think Strategically when Creating Estate Plan – Annapolis and Towson Estate Planning

Think Strategically when Creating Estate Plan – Annapolis and Towson Estate Planning

Mindful estate planning can create tax and investment efficiencies and help ensure that your wishes are fulfilled, says a recent article titled “Estate planning basics: Tips for strategic preparation” from Atlanta Business Chronicle. Before creating a plan, it may be helpful to understand the components of a comprehensive plan, how assets can be transferred and how to get started.

Thoughtful estate planning starts with key documents. Your last will and testament provide details on wishes about property distribution and assets after death. The will creator names an executor, who oversees and manages the estate until its final distribution, including payment of any outstanding debts or taxes.

The will has no impact on insurance proceeds, retirement assets, or transfer-on-death investment accounts. A will can be amended during the creator’s lifetime and should be reviewed every three years or so to ensure that it still aligns with the testator’s wishes.

Trusts are legal entities allowing a third party—the trustee—to manage assets on behalf of beneficiaries. There are many different kinds of trusts, depending on the family’s needs. The grantor, who is the person creating the trust,  can define how and when assets pass to beneficiaries.  They can be revocable, meaning the grantor can amend the trust as long as they are living, or irrevocable, meaning the grantor cannot amend the trust after its creation.

A letter of intent can accompany a will and is published to the executor, trustees and beneficiaries. This provides detail from the decedent on their wishes but is not legally enforceable.

Power of Attorney is used when the person creating it is physically or mentally disabled due to illness or injury. It allows an agent to manage financial and legal affairs, can be temporary or permanent and is revoked upon the death of the principal.

Advance directives for health care provide detailed guidance to caretakers and medical professionals regarding wishes for healthcare when the person is unable to communicate their own wishes.

Transferring assets to beneficiaries occurs in several different ways, including designations, jointly held accounts and property, probate, or trusts. Beneficiary designations are typically used with life insurance policies, annuity contracts, retirement accounts and investment accounts.

Some assets are owned through Joint Tenancy With Rights Of Survivorship (JTWROS). They pass by title or registration to a surviving co-owner. This type of ownership is usually used with bank and investment accounts, real estate property, vehicles, or boats. The asset automatically transfers to the surviving owner. Be sure to avoid conflicting instructions in wills or trusts when assets are owned with JTWROS.

Probate is the method through which the estate is approved by the court and assets are distributed using the will as guidance. The court also authorizes the executor to manage the estate.

Assets held in trust are maintained by trustees who hold the assets on behalf of beneficiaries. They are passed on based on the trust agreement and don’t go through probate.

Once you have created an inventory of all assets and properties, meet with an experienced estate planning attorney to draft the documents needed to carry out the plan. The attorney will help refine goals and clarify key issues. Assets may need to be retitled and trusts may need to be funded. Executors, trustees and beneficiaries should be notified, so they understand their role in your estate plan.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Atlanta Business Chronicle (March 1, 2023) “Estate planning basics: Tips for strategic preparation”

 

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Read more about the article What Is a Beneficiary? Annapolis and Towson Estate Planning

What Is a Beneficiary? Annapolis and Towson Estate Planning

A beneficiary can be designated by the owner or automatically assigned through the policy or contract. It’s essential to understand who these beneficiaries are and how they will be affected by the annuity payments to best plan for retirement income needs, says The Salisbury Post’s recent article entitled “What exactly is a beneficiary?” Let’s look at the different types:

  • Primary Beneficiary: This is typically designated by the owner when they buy the account who will receive any remaining funds from the annuity after the owner’s death. If there are multiple primary beneficiaries on an account, each may get a proportional portion of any remaining funds at death based on their age and relationship to the owner. Depending on individual circumstances, this may be taxable.
  • Secondary Beneficiaries: This is another individual who might benefit from an annuity upon the death of both owners (if it’s owned jointly). If a secondary beneficiary isn’t named, any remaining funds will pass directly through the owner’s estate according to state laws of intestate succession, if applicable.
  • Contingent Beneficiaries: In some instances, an owner may want to name a contingent beneficiary in the event that the primary and secondary beneficiaries predecease him or her before taking ownership of the annuity.

Annuity owners should keep their beneficiaries up to date by making sure they’re aware of changes in their lives such as marriages, divorces, the births or adoptions of children, the deaths of a loved ones, or any other relevant life events that may impact the ownership and/or distribution of the annuity policy.

It’s also important to think about the tax implications for everyone involved and how the funds should be allocated should something unexpected happen.

By understanding annuity beneficiaries and taking the time to name them correctly, an annuity owner can be sure his or her beneficiaries receive the funds from the annuity in accordance with their wishes.

Speak to an experienced estate planning attorney for more information about annuities and how naming the correct beneficiaries may help protect both you and those closest to you in the future.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Salisbury Post (Feb. 26, 2023) “What exactly is a beneficiary?”

 

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Read more about the article Do I Need an Estate Planning Attorney? Annapolis and Towson Estate Planning

Do I Need an Estate Planning Attorney? Annapolis and Towson Estate Planning

Sound estate planning can help minimize taxes and expenses associated with transferring your assets and property after your death, says Urban Asia’s recent article entitled “Why Is It Important To Hire An Estate Planning Attorney.”

An experienced estate planning attorney can help you with your estate planning goals efficiently, avoiding legal processes that can be time-consuming and costly. Estate planning through an attorney can help you, and your loved ones avoid legal complications or unwanted delays.

What are the benefits of hiring an experienced estate planning attorney?

  • Legal expertise: They have specialized knowledge of the laws and regulations governing probate and estates. They can advise you on the best plan to suit the utilization of your assets and needs, and make sure that your estate planning complies with all applicable laws.
  • Tax implications: Estates can have tax implications. An experienced estate planning attorney can advise you on how to structure your estate plan to minimize taxes and maximize the benefits for your beneficiaries.
  • Customization: They can help customize your estate plan to suit your individual needs and goals.
  • Protection of beneficiaries: Estate planning attorneys can help protect your heirs’ interests by ensuring that your will and trust are administered correctly. They can help assure that all your assets are protected from creditors and other legal claims.
  • Charitable giving: An estate planning attorney can advise you on how to make philanthropic gifts, either during your lifetime or at death, through charitable trusts or other charitable giving vehicles.
  • Incapacity planning: They can help you plan for incapacity by creating a power of attorney or living will to let you specify how your assets and property should be managed, if you are unable to decide for yourself.

Finding the right attorney for estate planning can be a challenging task. Estate planning can be complex, and selecting an attorney with experience and expertise in this discipline is essential. Therefore, look for an attorney with plenty of experience in estate planning.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Urban Asia (Jan. 22, 2023) “Why Is It Important To Hire An Estate Planning Attorney”

 

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Read more about the article What Should I Ask a Prospective Estate Planning Attorney? Annapolis and Towson Estate Planning

What Should I Ask a Prospective Estate Planning Attorney? Annapolis and Towson Estate Planning

Estate planning has many important advantages like providing for your immediate family, making certain your assets are distributed the way you want, supporting charitable causes, and more.

The Baltimore Post-Examiner’s recent article entitled “5 Questions to Ask an Estate Planning Attorney” provides some questions to help you find the right person to help you with this essential task.

  1. Do You Practice Only in Estate Planning? Specialization is critical, so find a lawyer whose practice focuses on estate planning. This person will be up to date on any law or regulation changes that impact estate planning.
  2. How Long Have You Been an Estate Planning Lawyer? It’s essential to find a lawyer specializing in estate planning. However, it’s also important to work with an experienced estate planning attorney who’s been doing this for some time. A lawyer who has practiced in the field for many years will have experience dealing with challenges to estate planning, such as will contests and disinheriting relatives.
  3. Do You Provide Periodic Reviews? Make sure you can come in and have periodic reviews to make possible changes when there are changes in your life.
  4. Are You Able to Help Me Create a Comprehensive Estate Plan? Make sure that you find an attorney who can help you develop an estate plan that include trusts, wills, powers of attorney and life insurance policies. An experienced estate planning attorney will be in the best position to assist you.
  5. What Do You Charge? Understand the pricing. Some attorneys charge a flat fee, some charge by the hour and others charge flat fees for some tasks and by the hour for other tasks. Look for an estate planning attorney who’s upfront and transparent with pricing.

Find a reputable estate planning attorney who can explain the process, help you make the right plans and then walk you through regular reviews.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Baltimore Post-Examiner (Jan. 24, 2023) “5 Questions to Ask an Estate Planning Attorney”

 

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Read more about the article Do I Need a Will If I’m Leaving Insurance Policy to a Beneficiary? Annapolis and Towson Estate Planning

Do I Need a Will If I’m Leaving Insurance Policy to a Beneficiary? Annapolis and Towson Estate Planning

If you aren’t thorough with your estate planning, you could create conflict, even with the best of intentions, says a recent article from Yahoo Entertainment titled “Life Insurance Beneficiary vs. Will: Do I Need Both?”

Your life insurance beneficiary designation supersedes your will, so you’ll need to have your life insurance policy and your will aligned to save heirs from stress, confusion, and possible litigation. You can use both life insurance beneficiaries and wills to bequeath assets to others when you die. However, they can work together or against each other, so meticulous planning is key.

Here’s how they work, and which takes precedence.

A life insurance beneficiary is the person or entity, like a charity, named to receive proceeds from your life insurance policy when you die. Your beneficiary will receive payment from the life insurance policy according to the terms of the policy. Who you designate as a beneficiary doesn’t have anything to do with who receives other assets from your estate, such as property or financial accounts.

A will is a legal document declaring who should receive your possessions after death. The will does not define the destination of one specific asset, like a life insurance beneficiary. Instead, it contains a list of the beneficiaries who you wish to receive your assets.

If you have minor children, a will is also used to assign legal guardians, the people who you wish to raise your children in your absence.

Your will needs to go through probate court before beneficiaries receive anything. The probate process confirms your will’s authenticity, interprets the language in the will and authorizes the named executor to carry out your intentions. Your life insurance policy goes directly to your beneficiary without probate review.

Does a life insurance policy override a will? If you designate one person to receive your life insurance policy proceeds and then name a different person in the will to receive the proceeds, the person named in the life insurance policy will win. Any intentions in the Will don’t influence or have any legal power over what’s in the will.

Your beneficiary designation in the policy is the sole determining factor, with one exception. If the beneficiary passes away before you and there is no contingent beneficiary named, the life insurance proceeds will go to your estate. Your executor will then disburse assets from the estate according to the beneficiaries named in your will.

Do you need a will? While a will has no influence over your life insurance, it’s a critical part of your estate plan. Probate court uses the will to determine who receives assets and name an executor. Just be sure that your will, any trusts and named beneficiaries on life insurance and other accounts are aligned to avoid creating friction between loved ones. It’s best to have a will to bring cohesion to your estate plan, instead of relying on separate beneficiary designations.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Yahoo entertainment (Feb. 6, 2023) “Life Insurance Beneficiary vs. Will: Do I Need Both?”

 

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Read more about the article Three Ways to Making Trusts Millennial Friendly – Annapolis and Towson Estate Planning

Three Ways to Making Trusts Millennial Friendly – Annapolis and Towson Estate Planning

If your named beneficiaries are Millennials—born between 1981-1996—you may want to consider three essential points about your trusts, as explained in the recent article “Trusts for Your Millennial Beneficiaries” from The Street. They’re different from their parents and grandparents, and disregarding these differences is a missed opportunity.

This generation’s distinguishing characteristics and traits include:

  • Valuing relations with superiors with a passion for learning and growth.
  • Desire to live a life with meaning and make a positive impact on the world and causes.
  • Creative and free thinking, looking for outside-the-box solutions and opportunities.

If your estate plan benefits Gen Y, some trust features recommended for Millennials may not be optimal for them. They’re different than their older Millennial counterparts.

Have your beneficiary serve as a co-trustee of their trust alongside an experienced advisor. Millennials appreciate the opportunity to ask for advice from a trusted advisor, secure positive reinforcement and get constructive feedback. Many heirs set to come into money are likely to work with an advisor once they inherit. For them, a co-trustee arrangement could be perfect. Consider naming a family member or friend with a background in finance as their co-trustee or naming a corporate trustee.

Consider giving your beneficiary a limited testamentary power of appointment to support their favorite charity. Millennials want to make a positive impact on the world, and there’s a trust feature you can build into a trust to support this goal: a limited testamentary power of appointment. In broad strokes, this gives the trust beneficiary the power to redirect where assets go upon their death. If the scope of power permits, they could redirect assets to charitable organizations of their choice.

Most people design trusts to last for the beneficiary’s lifetime and then structure the trust so assets remaining at their death will pass in trust to their children in equal shares. Trusts can also be created to change the distribution percentages between recipients. For instance, instead of a 50-50 split, the trust can redirect shares of 70-30 to better accomplish their personal objectives. You can also provide for new beneficiaries, like charities, if they weren’t part of the original trust.

Powers of appointment can be complicated and making them overly broad can have serious and adverse tax consequences. Therefore, speak with your estate planning attorney to make sure the scope of power is clear and properly designed.

Broadly define the standards for which distributions can be made to your beneficiary. Millennials think differently, so the commonly used trust distribution standards of health, education, maintenance and support (“HEMS”) may stop them from being able to tap into trust funds for philanthropic or entrepreneurial efforts. The HEMS standard only allows for distributions generally for purposes to align with the beneficiary’s current standard of living. If you want beneficiaries to be able to do more, they need to be given the ability to do so.

Another way to accomplish this is to allow a disinterested trustee (someone who is not a beneficiary) an expansive distribution authority. Having the ability to make a distribution of trust funds to your beneficiary for any purpose can be a little unsettling. However, naming a disinterested trustee you trust will ensure that funds are distributed responsibly.

Leaving assets in trust for beneficiaries can be part of an effective estate plan supporting planning goals and your loved one’s future. However, if the trust’s structure doesn’t meet their unique needs and talents, then their potential may be dimmed.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: The Street (Feb. 24, 2023) “Trusts for Your Millennial Beneficiaries”

 

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Read more about the article What Does an Elder Law Attorney Do? Annapolis and Towson Estate Planning

What Does an Elder Law Attorney Do? Annapolis and Towson Estate Planning

Seniors are some of the most vulnerable members of our society. They can fall victim to a range of scams, abuse and misconduct. Seniors may also lack the ability to speak out and be heard. As a result, the combination of these factors can lead to tragic outcomes.

With a law firm that specializes in elder care law at your side, you can provide seniors with the advocacy they need to ensure that their rights are protected.

Seasons’ recent article entitled “Finding an elder care lawyer” reports that according to the WHO, one in six people over the age of 60 saw some type of abuse from 2021 to 2022. Two-thirds of staff members at nursing homes and long-term-care facilities admitted they committed abuse during that same period. Unfortunately, these issues are only getting worse with time, and elder abuse only increased during the COVID-19 pandemic.

Connecting with qualified, experienced elder law attorneys can be simple if you understand how they can help.

Elder law encompasses all aspects of legal representation and advocacy that involve the elderly and include the following:

  • Estate planning
  • Medicaid planning
  • Disability
  • Social Security benefits
  • Guardianship and Conservatorship
  • Elder abuse
  • Fraud
  • Neglect
  • Consumer protection
  • End-of-life planning
  • Retirement planning
  • Long-term-care planning
  • Discrimination
  • Nursing homes
  • Landlord/tenant disputes
  • Powers of attorney
  • Medical care option directives; and
  • Tax issues.

Elder care law deals with legal issues concerning a senior’s well-being in nursing homes and long-term-care facilities. These are areas where neglect, abuse and misconduct are quite common. Therefore, it might be a good idea to contact an elder care attorney as soon as you suspect abuse is occurring.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Seasons (Aug. 30, 2022) “Finding an elder care lawyer”

 

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys