Read more about the article Integrating Digital Assets for Estate Planning- Annapolis and Towson Estate Planning

Integrating Digital Assets for Estate Planning- Annapolis and Towson Estate Planning

Estate planning for digital assets is an increasingly important aspect of overall estate planning due to the growth of online accounts, cryptocurrencies, and other digital assets. It involves organizing and planning for the management and distribution of your digital assets in the event of your incapacity or passing. Here are key considerations and steps to effectively include digital assets in your estate plan:

  1. Take Inventory of Digital Assets: Start by creating a comprehensive list of your digital assets, including:
    • Financial Accounts: Online banking, investment accounts, PayPal, etc.
    • Social Media and Email Accounts: Facebook, Twitter, Gmail, etc.
    • Digital Media: Music, videos, ebooks, etc.
    • Cryptocurrencies: Bitcoin, Ethereum, etc.
    • Domain Names and Websites: If you own any.
    • Online Storage Accounts: Dropbox, Google Drive, etc.
  1. Organize Documentation and Access Information:
    • Document account information, login credentials, and any two-factor authentication codes.
    • Store this information securely, either in a physical location (like a safe deposit box) or a password manager. Ensure a trusted individual knows how to access this information.
  1. Appoint a Digital Executor:
    • Designate a trusted person as your digital executor in your will or estate plan.
    • Grant them the authority to access, manage, and distribute your digital assets in accordance with your wishes.
  1. Review Terms of Service Agreements:
    • Understand the terms of service for each digital platform or service you use, as they may have specific rules about transferring or accessing accounts after death.
    • Comply with any necessary procedures for handling digital assets outlined in these agreements.
  1. Communicate Your Wishes:
    • Clearly communicate your wishes regarding digital assets to your loved ones, digital executor, and any other relevant parties.
    • Provide guidance on how you want each type of digital asset handled, shared, or preserved.
  1. Regularly Update Your Plan:
    • Regularly review and update your estate plan, especially if you acquire new digital assets or change online account information.
  1. Consult with Professionals:
    • Seek advice from estate planning attorneys or financial advisors who are knowledgeable about digital asset planning to ensure your plan is thorough and legally sound.
  1. Consider Legal Assistance:
    • Depending on the complexity of your digital assets and your overall estate, consult a lawyer specializing in estate planning and digital asset management to ensure your plan is comprehensive and legally binding.

By integrating your digital assets into your estate plan, you can help ensure a smooth transition of your online presence and assets to your chosen beneficiaries and loved ones.

Contact us to schedule a complimentary call with one of our experienced estate planning attorneys!

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

Read more about the article At Long Last, Trial Leads to Final Decision on Aretha Franklin’s Will- Annapolis and Towson Estate Planning

At Long Last, Trial Leads to Final Decision on Aretha Franklin’s Will- Annapolis and Towson Estate Planning

The trial over the Queen of Soul’s estate is over. The jury’s decided that the 2014 will, secreted under a couch cushion, is the valid will. The title of a recent article from CNBC says it all: “Longtime Aretha Franklin estate battle shows the importance of having a proper will.” You need a will and an estate plan, even if you’re not a celebrity.

Aretha Franklin died in 2018; at first, no one even knew she had a will. Two handwritten wills then were found. Franklin was a resident of Michigan, where handwritten or “holographic” wills are legally permissible. The question was, which of the two wills were valid?

Everyone needs a will, a legal document detailing their wishes to distribute assets and property upon death. Parents with minor children use wills to nominate a legal guardian for their children, and the will is also used to name an executor to be in charge of carrying out the directions in the will.

When someone dies without a will, they have passed “intestate.” When this happens, state law dictates how an estate is distributed.

Franklin had two handwritten wills, one in 2010 and the second in 2014. Both were found in her Detroit home months after her death. She had four sons, and the legal dispute was between her sons, who disagreed over which handwritten will should govern her estate. There were significant differences between the documents.

The more recent will generally take precedence over an older one. However, a handwritten will can go wrong in many ways. The lengthy estate battle over Franklin’s will exemplifies why everyone needs a properly prepared will.

Some assets don’t pass through the will, such as those with beneficiary designations. If property is owned in “joint tenancy,” where two or more people own property together, the surviving party inherits the property.

How assets are titled governs their distribution. For instance, assets held in a trust are owned by the trust, and the trustee will distribute assets according to the language in the trust.

When someone dies, the executor presents the will to the court as part of a probate proceeding. The will and its contents become a matter of public record. Anyone who wants to see the will can, which is why many people prefer to use trusts, which are private.

If you don’t have a will, meet with an estate planning attorney, and start the process. If your will is over five years old, it’s time for an update.

Reference: CNBC (July 11, 2023) “Longtime Aretha Franklin estate battle shows the importance of having a proper will”

Contact us to schedule a complimentary initial call with one of our experienced estate planning attorneys!

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Read more about the article What if My Executor Dies? – Annapolis and Towson Estate Planning

What if My Executor Dies? – Annapolis and Towson Estate Planning

If the executor dies while the estate is being administered, it can create many complications, says a recent article, “What Happens If the Executor of My Will Dies?” from Yahoo! Finance. One solution is to name a successor executor to avoid some of the problems. Many people fail to do this. It’s a big mistake.

In estate planning, an executor is charged with settling the estate of a deceased person. The executor is named when your will is created. That is when you have the opportunity to name the person you trust to act as an executor. If you die without a will in place or your will fails to name an executor, any interested party can petition the probate court to become the executor.

You probably prefer to select the person to be your executor, rather than hoping the court names someone you trust to follow your wishes.

The executor has a number of tasks to complete, including but not limited to:

  • Creating an inventory of the decedent’s estate
  • Notifying creditors of the decedent’s passing
  • Liquidating estate assets to pay creditors
  • Distributing remaining assets among heirs according to the terms of the will

Executors have a fiduciary duty when settling estates, meaning they must always act in the best interest of the decedent’s heirs. If they fail to do this, they can be removed.

If the executor dies before the person who makes the will, a new one needs to be named. This is yet another reason why last wills need to be updated on a regular basis, especially if the executor is close in age to the testator, the person who created the will.

The court will name an executor if the testator fails to update their will or write a new one. Any interested person can petition the court, which may not be what you had in mind. Someone who is not qualified or doesn’t have the best interest of heirs could be appointed.

What if the executor dies during the probate process? If a successor executor is named in the will, they can step up to finish the estate settlement. However, this only happens if the testator names one or more successor executors. When there is no successor executor named, the court will name one.

The easiest way to avoid complications arising from the death of the executor is to name one or more successor executors. Another is to place most or all of your assets in a trust, which would allow them to bypass probate. For a trust, you’ll need to name a trustee who will manage assets on behalf of beneficiaries.

Placing assets in a trust avoids complications following the death of an executor as the trustee would be responsible for distributing the assets. Instead of waiting for probate to be included, the trust beneficiaries could receive their assets according to the terms of the trust.

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

Reference: Yahoo! Finance (May 15, 2023) “What Happens If the Executor of My Will Dies?”

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

Read more about the article What Happens When There’s No Will? – Annapolis and Towson Estate Planning
Word text Make a will on white paper on office table / business concept

What Happens When There’s No Will? – Annapolis and Towson Estate Planning

According to a recent article, “The Confusing Fallout of Dying Without a Will,” from The Wall Street Journal, despite the consequences for their heirs and loved ones, millions of Americans still don’t have a will. The total wealth of American households has tripled over the past thirty years, according to the Congressional Budget Office. Still, more than half of Americans polled by Gallup said they didn’t have a will in 2021. Another survey showed that one in five Americans with investible assets of $1 million or more don’t have a will.

Dying without a will means the laws of your state will determine who gets your assets. In some cases, loved ones could end up with nothing. They could be evicted from the family home and even hit with massive tax bills.

This is especially problematic for unmarried couples. One example—after 18 years of living together, a couple had an appointment with an estate lawyer to create wills. However, the woman died in a horseback riding accident just before the appointment. Therefore, her partner had to get the woman’s sons, who lived overseas, to sign off, so he could be appointed her executor. The couple had agreed between themselves to let him have the home and SUV they’d purchased together. However, state law gave her sons her 50% interest. Therefore, he had to buy out her son’s interest to keep his home and car.

Dying without a will, or “intestate,” means you can’t name an executor to administer your estate, name a guardian for minor children, or distribute the property as you want.

Here’s what you need to know about having—or not having—a will:

State law governs property distribution. In some states, where there is a surviving spouse and children, the surviving spouse gets 100% of the estate, and the children get nothing. The surviving spouse gets 50% in other states, and the children divide the estate balance. For example, in Pennsylvania, if there are no children but there is a surviving parent, the surviving spouse gets the first $30,000, and the balance is split 50/50 with the parent. In Tennessee, a surviving spouse with two or more children receives a third of the estate, with the rest split between the children.

Check on all assets for beneficiary designations. Retirement accounts and life insurance policies typically pass to whoever is listed as the beneficiary. However, if you never named a beneficiary, the state’s laws will determine who receives the asset.

If you don’t have a will and want to be sure a partner gets these assets, you’ll need to speak with an experienced estate planning attorney to explore your options. For example, you might be able to use a transfer on death deed or a payable on death account. However, there may be better ways to accomplish this goal.

Contact us to schedule your complimentary initial call with one of our experienced estate planning attorneys.

Reference: The Wall Street Journal (May 2, 2023) “The Confusing Fallout of Dying Without a Will”

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Read more about the article What are the Consequences of Dying Without a Will? – Annapolis and Towson Estate Planning
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What are the Consequences of Dying Without a Will? – Annapolis and Towson Estate Planning

Someone who dies (the “decedent”) with a legal will is known to have a testate inheritance. As such, their assets are distributed according to their will. A person who dies without a legitimate will has an intestate estate. Their assets are distributed according to the laws of inheritance.

Yahoo’s recent article, “What Happens If I Die Without a Valid Will?” says that estate planning is a local area of the law, so specific rules governing estate planning vary greatly from state to state.

When you die, all of your property is called your estate. If you die with a valid and enforceable will, then your estate is distributed in the following way:

  1. First, all attorney’s fees related to managing your estate are set aside for payment;
  2. The person managing your estate (the executor) then pays any debts that you had with the assets in your estate;
  3. Finally, after paying off all debts, your estate is distributed according to the instructions in your will.

Liabilities don’t transfer through an estate, so while you can inherit someone’s property, you can’t inherit their debts. However, debts can affect an inheritance in several ways. The first case is when liabilities transfer with the property. Therefore, if the decedent owed unpaid property taxes or a mortgage on their house and then left you that property if you wanted the house, you’d also have to take responsibility for paying those debts. If you don’t, the executor will sell the house, settle the debts and transfer any remaining money to you.

Second, liabilities can reduce a potential inheritance. Here, if someone leaves you $100,000 in their will but also has $40,000 in unpaid debts, you’d only get $60,000 because that’s what would be left. If the debts exceed the estate’s value, the individual dies insolvent, and their heirs would get nothing.

Other than managing liabilities like debt and taxes, a person can use their will to distribute their assets in almost any way they want. It’s important to understand this because many think family members automatically have a right to inherit money or property. This isn’t so.

Contact us to schedule a complimentary initial call with one of our experienced estate planning attorneys.

Reference: Yahoo (Jan. 27, 2023) “What Happens If I Die Without a Valid Will?”

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

Read more about the article What Is the Purpose of an Executor? – Annapolis and Towson Estate Planning

What Is the Purpose of an Executor? – Annapolis and Towson Estate Planning

It is flattering to be named the executor for a loved one. It demonstrates an extremely high level of trust and respect, as the person considers you capable enough to fulfill their wishes when they have passed. However, just because you have been named executor does not mean you are obliged to serve, says the recent article, “What are the responsibilities of an executor?” from Daily Local News.

Suppose you decide the responsibilities of being an executor are more than you’re willing or able to handle. In that case, you can renounce your position as executor, and a successor executor named in the will becomes the executor. If the person who named you executor did not name a successor, the court will select a person for the role.

If you have any doubts about this role, please tell the person who asks you to serve, so they can make other arrangements.

If you choose to serve, you’ll want to understand what the job entails. Each estate is unique, and its administration depends upon the assets owned by the deceased, what debts they had and their wishes for distribution.

Some duties are the same regardless of the complexity or simplicity of the estate. For example, the executor often makes arrangements with the funeral home and provides information for the death certificate. Once the death certificate is issued, the executor probates the will with the local court in the county where the decedent last lived. Most people retain an estate planning attorney to guide them through probate and estate administration.

Once the petition for probate has been filed and the court issues Letters Testamentary empowering you to serve as the executor, the administration begins. Some, but not all, of the tasks, include:

  • Gathering assets
  • Notifying beneficiaries named in the will
  • Obtaining an EIN federal tax number for the estate
  • Opening an estate checking account
  • Verifying and paying the debts of the decedent
  • Liquidating and transferring estate assets into the estate checking account
  • Filing a final personal income tax return
  • Providing an accounting to beneficiaries and distributing the estate in accordance with the decedent’s will
  • Filing an estate tax return.

The executor also handles other tasks, such as selling the contents of the person’s residence and home.

The executor is entitled to reasonable compensation for their services. The amount is treated as taxable income. Determining the fee depends on the value and complexity of the estate and the amount of time it took to settle the estate. Some family members waive a fee, while others feel their time deserves compensation.

An estate planning attorney can provide invaluable assistance and prevent expensive mistakes from occurring. If the estate involves businesses, complex ownership structures, trusts, or other sophisticated assets, it is worthwhile to have the help of an experienced professional.

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

Reference: Daily Local News (March 22, 2023) “What are an executor’s responsibilities?”

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

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?”

 

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

What Recourse Is Available if Inheritance Is Stolen? Annapolis and Towson Estate Planning

State inheritance theft laws typically cover four distinct aspects, says Yahoo’s recent article entitled “Someone Stole My Inheritance. What Are My Options?”

The four are:

  • Who committed the inheritance theft,
  • When the theft happened,
  • What was taken, and
  • How the theft happened.

As far as the “how” goes, note that inheritance theft can take many different forms. One of the most common examples involves elder financial abuse where someone takes advantage of an elderly person’s weakened physical or mental state to steal from them.

If you think someone’s stolen your inheritance, it’s important to review inheritance theft laws in your state. Again, each state has different guidelines regarding:

  • What constitutes inheritance theft,
  • Who has the standing to bring a civil claim or file a criminal complaint concerning a stolen inheritance,
  • The legal grounds for successfully pursuing an inheritance theft claim, and
  • Penalties and remedies for inheritance theft.

Speaking with an experienced estate planning attorney can help you see if you have standing and grounds to file a claim for inheritance theft. Your attorney may advise you to take certain steps to develop a case, including:

  • Taking an inventory of the estate’s assets,
  • Reviewing estate documents, such as wills or trusts, to look for any potential signs of fraud or forgery, and
  • Verifying the validity of will or trust documents.

With a larger estate, you may need to hire a forensic accountant. They specialize in examining financial documents, which may be helpful if you’re struggling to create a paper trail to support a claim of inheritance theft.

Inheritance theft laws can help to protect your rights to an estate if you think your inheritance was stolen. You can also take actions to preserve your own estate for your heirs by drafting a valid will, creating a trust and choosing trustworthy individuals to act as your executor, trustee and power of attorney.

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

Reference: Yahoo (Jan. 18, 2023) “Someone Stole My Inheritance. What Are My Options?”

 

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Read more about the article What Documents are in an Estate Plan? Annapolis and Towson Estate Planning

What Documents are in an Estate Plan? Annapolis and Towson Estate Planning

Understanding how estate planning documents work is central to creating an estate plan for each individual’s unique situation. An estate planning attorney needs to know the details of your life, not because they’re nosy. It is because this is how they can create a plan tailored to protect you during your lifetime, plan for long-term care and distribute assets upon your death. A recent article, “Understanding estate planning documents” from Lake Country Record-Bee, explains in broad strokes what each estate plan needs to include.

The will nominates an executor to administer the decedent’s estate, including the distribution of specific gifts and other assets. Depending on your state of residence, the will must be witnessed by one or two people who have no interest in the outcome of your will. At death, the distribution of assets only applies to those in the estate and not to those who receive property transferred under a trust, through a designation of death beneficiary form or a joint tenancy title.

A trust controls and manages assets placed in the trust during life and after death. Assets held in a living trust are used to avoid conservatorships, should become incapacitated during life. Assets in trusts do not go through probate.

Assets transferred into a living trust must belong to the person to establishes the trust, known as the settlor. A married couple may establish a joint trust to receive community property, if they live in a community property state. Each spouse may choose to transfer his or her own separate property assets into a joint trust or keep their separate property assets in separate trusts.

Trust assets are titled for ownership and control to the trustee. The trustee is a fiduciary, meaning they are the legal representative of the trust and administer the provisions of the trust as directed in the trust documents.

You should always have a successor trustee for a trust, who takes office when the last initial trustee resigns, becomes incapacitated, or dies. How and when the transfer to the successor trustee takes place is included in the trust documents. Some trusts include a specific method to fill a trustee vacancy, if no nominated successor trustee accepts the role.

Living trusts can be changed by the settlor. The incapacity or death of the settler makes a living trust an irrevocable trust. A joint trust, however, sometimes allows either settlor acting alone to amend the living trust. Your estate planning attorney will help you determine whether a joint trust makes sense for your family.

Powers of attorney (POA) allows a person (the principal) to authorize another person (the agent) to act as a representative over some or all of the principal’s own legal and financial affairs. The POA does not have any power over a trust; the trustee is in charge of the trust. A POA can be effective on signing or effective upon incapacity of the principal. POA forms do not always reflect specific individual wishes, so it’s best to have one created by an estate planning attorney.

The Advance Health Care Directive (AHCD) delegates authority to an agent to make decisions and act on the principal’s needs in health care. The AHCD must be created and be in place before incapacity occurs. An incapacitated person cannot sign legal documents.

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

Reference: Lake County Record-Bee (Feb. 18, 2023) “Understanding estate planning documents”

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

What Is Probate Court? Annapolis and Towson Estate Planning

Probate court is a part of the court system that oversees the execution of wills, as well as the handling of estates, conservatorships and guardianships. This court also is responsible for the commitment of a person with psychiatric disabilities to institutions designed to help them.

Investopedia’s recent article entitled “What Is Probate Court?” also explains that the probate court makes sure all debts owed are paid and that assets are distributed properly. The court oversees and usually must approve the actions of the executor appointed to handle these matters. If a will is contested, the probate court is responsible for ruling on the authenticity of the document and the cognitive stability of the person who signed it. If no will exist, the court also decides who receives the decedent’s assets, based on the laws of the state.

Each state has rules for probate and probate courts. Some states use the term “surrogate’s court”, “orphan’s court”, or “chancery court.”

Probate is usually required for property titled only in the name of the person who passes away. For example, this might include a family home that was owned jointly by a married couple after the surviving spouse dies. However, there are assets that don’t require probate.

Here are some of the assets that don’t need to be probated:

  • IRA or 401(k) retirement accounts with designated beneficiaries
  • Life insurance policies with designated beneficiaries
  • Pension plan distributions
  • Living trust assets
  • Payable-on-death (POD) bank account funds
  • Transfer-on-death (TOD) assets
  • Wages, salary, or commissions owed to the deceased (up to allowable limit)
  • Vehicles intended for immediate family (under state law); and
  • Household goods and other items intended for immediate family (under state law).

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

Investopedia (Sep. 21, 2022) “What Is Probate Court?”

 

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