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”

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

Read more about the article Will In-Laws Inherit If I Don’t Have a Will? – Annapolis and Towson Estate Planning

Will In-Laws Inherit If I Don’t Have a Will? – Annapolis and Towson Estate Planning

State inheritance laws prioritize spouses, children and other blood relatives ahead of in-laws. However, how those individuals handle their share of an inherited estate can determine whether an in-law receives any assets.

Yahoo’s recent article, “Can I Leave Inheritance Money to In-Laws?” explains that state inheritance laws say who can be an estate heir. These individuals are typically directly related to the decedent by marriage, blood, or adoption. In order of priority, people who can inherit from someone under state law include spouses, children, siblings, parents, grandchildren, aunts and uncles and cousins.

However, an in-law may get some of an estate if they marry a direct heir.

You can leave assets to your in-laws if you want them to inherit from your estate. The easiest way to do this is to leave instructions in your will as to what assets they should inherit. You could also ask an experienced estate planning attorney about creating a trust to give assets to in-laws.

Some people may want to leave something to a son or daughter-in-law. However, others may seek to exclude them from inheriting altogether. To protect an inheritance from in-laws, you can create a trust that allows you to leave assets to family members. In addition, the trust can state that anyone not a blood relative can be excluded from receiving assets.

A prenuptial agreement for your child is another option. This might have terms that state how assets you pass on to your child should be handled during your lifetime and beyond. You could also raise the prospect of a postnuptial agreement after they’re married. The document would dictate what happens to their assets (and anything they’ve inherited from you) if they are divorced.

Every family situation is unique, and you might have questions about where in-laws fit into your estate plan. Ask an experienced estate planning attorney to discuss this with you.

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

Reference: Yahoo (Jan. 8, 2023) “Can I Leave Inheritance Money to In-Laws?”

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

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

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 

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

Read more about the article Why Change the Executor of Your Will? Annapolis and Towson Estate Planning

Why Change the Executor of Your Will? Annapolis and Towson Estate Planning

Yahoo Finance’s recent article entitled “How to Change the Executor of a Will” explains that you may need to choose a new executor in the following situations:

  • Your original executor dies or becomes seriously ill and can’t fulfill his or her duties;
  • You named your spouse as executor but you’ve divorced;
  • The individual you originally designated as executor decides he or she no longer wants the responsibility;
  • You’ve had a personal falling out with your executor; and
  • You think another person is better equipped to execute your will.

However, you don’t need to give a specific reason to change the executor of a will. When you’re ready to make a change, you can add a codicil to an existing will or draft a new will.

A codicil is a written amendment used to modify the terms of your will without drafting a new one. It can be used to change the executor of a will or revise any other terms as needed.

You must validate the codicil the same way you did your original will, signing and dating the codicil with the same legal formalities required for the original will.

If you’d like to change more than just the executor of your will, you might think about drafting a new will document. The new will would also need to be signed with the same legal formalities required for the original will.

You must also take the added step of destroying all copies of the original will. This is needed to avoid confusion and any possible challenges to the terms of the will after you die.

If you don’t name an executor in your will, the probate court can assign one. After you die, eligible persons can apply to become the executor of your estate. The individual the judge selects would then be able to carry out the terms of your will.

If you don’t have a will at all, then your assets would be distributed by default according to your state’s inheritance laws.  Contact us to review your estate plan with one of our experienced estate planning attorneys

Reference: Yahoo Finance (Dec. 28, 2022) “How to Change the Executor of a Will”

 

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

Read more about the article What Happens When There Is No Will? Annapolis and Towson Estate Planning

What Happens When There Is No Will? Annapolis and Towson Estate Planning

A will ensures that your personal and financial assets are given to the people and organizations you want. It also allows you to choose the person you want to settle your affairs, known as your executor. The time to have a will prepared is typically the same time people have a power of attorney and healthcare proxy forms prepared, according to the article “What Happens if You Die Without a Will?” from The Street.

Your estate plan is the term used to describe having all of these and other tools prepared to work together. It has nothing to do with the size of your estate, which could be modest or major. Regardless of the financial size or complexity of your life, you need a will.

What happens without a will?

A married person with children who dies without a will does the family a great disservice. All property, including real estate, investments and accounts that are jointly owned with the spouse go to the co-owner without needing to go through probate. However, separately owned property and accounts are distributed by the state in the absence of a will. Depending on the state, one-third may be awarded to the surviving spouse, and the remainder may be divided among the children. If the children are minors, the funds will be held in an account only accessible with court approval. The family may find itself without sufficient funds to maintain its lifestyle.

A person who is married but has no children or grandchildren and dies without a will may have their entire estate given to the surviving spouse. However, some states have a cap of $100,000. Other states give a third of to one-half of assets to the surviving spouse and the rest to the deceased’s parents, if they are living, or to the siblings. Jointly owned property, accounts and community property go to the surviving spouse.

What about a single person with children? With no will, the state law gives the decedent’s assets to surviving children in equal shares. If an adult child is deceased, their share is split among their own children (the decedent’s grandchildren). However, if the children are minors, the money is subject to court control and supervision.

If someone who is single and has no children dies, the state usually gives their assets to surviving parents. If the parents are not living, the assets will be distributed to the decedent’s siblings, or nephews and nieces, if the siblings have also passed. The state will reference a consanguinity chart—a chart used to help identify relationships of people showing degrees of family relationships by blood or marriage. Assets may pass to distant cousins who have never met or even known of the existence of the decedent.

If there are no living family members, the estate typically goes to the state itself.

When a member of an unmarried couple dies without a will, the surviving partner has no legal rights at all. Only spouses and relatives are recognized by state law. The partner will not inherit anything; assets will pass as if the person was single.

Domestic partners are treated differently in different states. In some states, they have inheritance rights, but this is state-dependent.

An experienced estate planning attorney can create a will and related documents to ensure your wishes are carried out upon your death. Otherwise, your estate will be distributed according to the laws of your state. You can protect yourself and your loved ones with a will.

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

Reference: The Street (Jan. 2, 2023) “What Happens if You Die Without a Will?”

 

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

Read more about the article Is Estate Planning and Writing Will the Same Thing? – Annapolis and Towson Planning

Is Estate Planning and Writing Will the Same Thing? – Annapolis and Towson Planning

An estate plan is a broader plan for your assets that may apply during your life as well as after your death. A will states where your assets will pass after you die, who will be the guardian of your minor children and other directions. A will is often part of an estate plan, but an estate plan covers much more.

Annapolis and Towson Estate Planning

Yahoo’s recent article entitled “How Is Estate Planning Different From Will Planning?” says that if you’re thinking about writing your will or creating an estate plan, it can be a good idea to speak with an experienced estate planning attorney.

A will is a legal document that describes the way you want your assets transferred after your death. It can also state your wishes when it comes to how your minor children will be cared after your death. Wills also nominate an executor who’s in charge of carrying out the actions in your will.

Without a will, your heirs may spend significant time, money and energy trying to determine how to divide up your assets through the probate court. When you die intestate, the succession laws where you reside determine how your property is divided.

Estate planning is much broader and more complex than writing a will.  A will is a single tool, and an estate plan involves multiple tools, such as powers of attorney, advance directives and trusts.

Estate planning may include thinking through topics even beyond legal documents, like deciding who has the power to make healthcare decisions on your behalf while you’re alive, in addition to deciding how your assets will be distributed after your death.

Therefore, wills are part of an estate plan. However, an estate plan is more than just a will.

A will is just a first step when it comes to creating an estate plan. To leave your family in the best position after your death, create a comprehensive estate plan, so your assets can end up where you want them.

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

Reference: Yahoo (Oct. 20, 2022) “How Is Estate Planning Different From Will Planning?”

 

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

Ask Mom if She has a Will – Annapolis and Towson Estate Planning

The family was baffled. Not only was the will out of date, but it was also unsigned, and the person named as executor had died a decade before their mother died. Grandchildren born after the will was created were not mentioned and personal possessions left to some people in the will had been given away years ago.

This scenario, as described in the article “Mom, Do You Have a Will?” from Next Avenue, is not unusual because many older adults and their children are equally reticent to discuss death. It’s a hard topic to address, but without these conversations, how can you make sure the transition after they pass is smooth?

Who needs a will? Pretty much everyone does. If your parents don’t have a will, here are some talking points to remind them of why it matters:

  • If you are part of a blended family, estate planning avoids either a full or partial disinheritance of a surviving spouse or their children.
  • If there are minor children or adult children with special needs, a will is used to appoint guardians. With no will, the court makes decisions about who raises children or cares for a special needs individual.
  • If yours is a fighting family (you know who you are), and if you want certain things to go to certain people, there needs to be an updated will.

Single people need a plan for their assets, especially if they are in a committed relationship but not married. Many state inheritance laws make no provision for a domestic partner. If a relationship is recognized before a loved one dies the remaining partner can access their right to property or benefits.

When someone dies without a will or a living trust, known as intestate succession, assets may be distributed according to rules set out in state law, which vary state to state and may not be what they would have wanted.

When asked if there is a will, some may say they are prepared. However, as in the example, this may or may not be true. Their will may be old, no longer relevant to their situation or may not have been signed.

Clarifying the status of an older adult’s will is important to a smoother transition of assets and needs to be addressed when they are of sound mind and able to make their own decision about their estate.

When preparing to have a discussion with someone who is active and healthy, the conversation is easier. Ask if they have a will and what their wishes are after they have passed. You can explain how these steps are essential to creating their legacy and protect their family from estate taxes and expensive court oversight.

When a person is seriously ill, this is admittedly a harder conversation. Acknowledge the difficulty and let them know they can stop the discussion if necessary. It may take more than a few conversations to get to everything. Discuss these issues with respect and empathy. Offer ideas and options and steer clear of any ultimatums.

Contact us to talk with one of our experienced estate planning attorneys who will explain what you need for your specific family.

Reference: Next Avenue (Sep. 14, 2022) “Mom, Do You Have a Will?”

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

How Can I Minimize My Probate Estate? – Annapolis and Towson Estate Planning

Having a properly prepared estate plan is especially important if you have minor children who would need a guardian, are part of a blended family, are unmarried in a committed relationship or have complicated family dynamics—especially those with drama. There are things you can do to protect yourself and your loved ones, as described in the article “Try these steps to minimize your probate estate” from the Indianapolis Business Journal.

Probate is the process through which debts are paid and assets are divided after a person passes away. There will be probate of an estate whether or not a will and estate plan was done, but with no careful planning, there will be added emotional strain, costs and challenges left to your family.

Dying with no will, known as “intestacy,” means the state’s laws will determine who inherits your possessions subject to probate. Depending on where you live, your spouse could inherit everything, or half of everything, with the rest equally divided among your children. If you have no children and no spouse, your parents may inherit everything. If you have no children, spouse or living parents, the next of kin might be your heir. An estate planning attorney can make sure your will directs the distribution of your property.

Probate is the process of giving someone you designate in your will—the executor—the authority to inventory your assets, pay debts and taxes and eventually transfer assets to heirs. In an estate, there are two types of assets—probate and non-probate. Only assets subject to the probate process need go through probate. All other assets pass directly to new owners, without involvement of the court or becoming part of the public record.

Many people embark on estate planning to avoid having their assets pass through probate. This may be because they don’t want anyone to know what they own, they don’t want creditors or estranged family members to know what they own, or they simply want to enhance their privacy. An estate plan is used to take assets out of the estate and place them under ownership to retain privacy.

Some of the ways to remove assets from the probate process are:

Living trusts. Assets are moved into the trust, which means the title of ownership must change. There are pros and cons to using a living trust, which your estate planning attorney can review with you.

Beneficiary designations. Retirement accounts, investment accounts and insurance policies are among the assets with a named beneficiary. These assets can go directly to beneficiaries upon your death. Make sure your named beneficiaries are current.

Payable on Death (POD) or Transferable on Death (TOD) accounts. It sounds like a simple solution to own many accounts and assets jointly. However, it has its own challenges. If you wished any of the assets in a POD or TOD account to go to anyone else but the co-owner, there’s no way to enforce your wishes.

Contact us to speak with one of our experienced estate planning attorneys.  An experienced, local estate planning attorney will be the best resource to prepare your estate for probate. If there is no estate plan, an administrator may be appointed by the court and the entire distribution of your assets will be done under court supervision. This takes longer and will include higher court costs.

Reference: Indianapolis Business Journal (Aug. 26,2022) “Try these steps to minimize your probate estate”

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

Do Single People Need Estate Planning? – Annapolis and Towson Estate Planning

In evaluating your needs for estate planning, look at what might happen if you die intestate – that is, without a last will and testament. Your assets will likely have to go through the probate process, which means they will be distributed by the court according to the state intestate succession laws, says Hood County News’ recent article entitled “Even ‘singles’ need estate plans.”

Even if you do not have children, you may have a few nephews or nieces—or children of cousins or friends— to whom you would like to leave some of your assets. This can include automobiles, collectibles and family memorabilia. However, if everything you own goes through probate, there is no guarantee that these individuals will end up with what you wanted them to have.

If you want to leave something to family members or close friends, you will need to say this in your will. However, you also may want to provide support to one or more charitable organizations. You can just name these charities in your will. However, there may be options that could provide you with more benefits.

One option is a charitable remainder trust. With this option, you would transfer appreciated assets – such as stocks, mutual funds or other securities – into an irrevocable trust. The trustee, whom you have named (note that you could serve as trustee yourself) can then sell the assets at full market value, avoiding the capital gains taxes you would have to pay if you sold them yourself, outside a trust. If you itemize, you may be able to claim a charitable deduction on your taxes. The trust can purchase income-producing assets with the proceeds and provide you with an income stream for the rest of your life. At your death, the remaining trust assets will pass to the charities you have named.

There is also a third entity that is part of your estate plans: you. Everyone should make arrangements to protect their interests. However, without an immediate family, you need to be especially mindful of your financial and health care decisions. That is why, as part of your estate planning, you may want to include these two documents: durable power of attorney and a health care proxy.

A durable power of attorney allows you to name a person to manage your finances, if you become incapacitated. This is especially important for anyone who does not have a spouse. If you become incapacitated, your health care proxy (health care surrogate or medical power of attorney) lets you name another person to legally make health care decisions for you, if you cannot do so yourself.

Reference: Hood County News (Dec. 17, 2021) “Even ‘singles’ need estate plans”

 

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