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 Estate Planning Mistakes to Avoid – Annapolis and Towson Estate Planning

Estate Planning Mistakes to Avoid – Annapolis and Towson Estate Planning

One reason to review your estate plan is to make sure people you’ve assigned roles to, like executor or guardian, are still living and willing to perform these tasks, according to the article “Five common estate planning mistakes to avoid” from the Idaho Press. Another is to be sure your estate plan is not missing out on any advantages created by new tax laws.

Biggest estate planning mistake: not having an estate plan. Each state has its own laws for distributing property when a person dies without an estate plan. These generally involve leaving a percentage of the decedent’s assets to family members, based on kinship. If the decedent and their partner are unmarried, no matter how long they have been together, the partner receives nothing. Spouses and biological children typically receive a share. This may leave the surviving spouse without enough money to live on. If the children are minors, the court will control their inheritance and when they reach the age of majority, the children receive the entire inheritance.

Second worst mistake: failing to name a guardian and giving no guidance for how you would like minor children to be raised. A guardian must be named in a will, or the court will name a guardian. Wise parents also create a letter to the guardian outlining their values, how they would like their children raised and whatever personal information a guardian should know about their children’s personalities, preferences and interests. This is a kindness to the children and the guardian.

Third is relying on joint ownership to avoid probate. This doesn’t work as well as you might think. Many people add an adult child to the title of assets like their home, and it creates more problems than it solves. Jointly owned assets are vulnerable to the co-owner’s creditors, divorce proceedings and even misuse of the assets. The co-owners must agree to all actions concerning the property, so if the parent wants to sell the house and the co-owning offspring does not, the parent may not be able to sell their own home. To make things more problematic, if there’s more than one child and only one is named co-owner, there is no legal requirement for the co-owner to share with their siblings. If the value of an asset fluctuates and the intent was to give all children equal shares, this can be undone as well.

Fourth is failing to plan for incapacity. People think of estate planning as planning for death but planning for incapacity is an equally important part of estate planning. If a person is too sick or injured to manage their personal business, only a court appointee can act on their behalf, unless a Power of Attorney exists. The POA is used to appoint a person to act as your agent when you cannot do so. Don’t rely on standardized forms: a POA can be assigned powers to act on everything from investments to bill paying to selling a home, or it can be limited to specific tasks. Your estate planning attorney can create a POA to reflect your needs.

You’ll also want a Power of Attorney for Health Care, sometimes called a Medical Power of Attorney. This allows your health care agent to speak with your doctors and be actively engaged in your medical care. Your estate planning attorney will prepare a Living Will, used to document your wishes for end-of-life care. You should also have a HIPAA form prepared, so your agent can access your medical records.

The fifth mistake is not keeping an estate plan up to date. Tax laws aren’t the only things to change and impact your estate plan. A friend from two decades ago may not want to serve as your executor or may have died or moved to another country. Your children may have had children of their own or divorced their spouses. Life changes and your estate plan needs to reflect these changes.

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

Reference: Idaho Press (Nov. 26, 2022) “Five common estate planning mistakes to avoid”

 

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Read more about the article What Should Not Be Kept in a Safe Deposit Box? Annapolis and Towson Estate Planning

What Should Not Be Kept in a Safe Deposit Box? Annapolis and Towson Estate Planning

In today’s digital world, almost everything of importance is stored virtually, in the cloud. A physical safe deposit box might seem like a throwback, but still has some good uses, says a recent article from Kiplinger, “Things You’ll Regret Keeping in a Safe Deposit Box.”

Some things belonging in a safe deposit box include prized possessions, like a valued baseball card collection or jewelry inherited from a loved one. Some important documents—but not all—should be kept in a safe deposit box.

There are many items you may regret putting in a safe deposit box, particularly if you need to access them in an emergency, when the bank isn’t open. The bank may also not be open during emergencies, including natural disasters. The COVID lockdown reduced many bank branch hours, or banks required appointments to access safe deposit boxes.

Here are some things that don’t belong in your safe deposit box:

Cash. If you need cash in an emergency and the bank is closed, you’ll have to wait. Idle money also loses buying power over time when inflation is high. A better place for the money if you don’t need it: an interest-bearing account or a certificate of deposit. Many banks also forbid storing cash in a safe deposit box. The cash has no protection from the Federal Deposit Insurance Corporation (FDIC), which insures up to $250,000 per deposit per bank. However, it is only if your money is in a checking account, savings account, or certificate of deposit.

Passport. Unless you travel internationally frequently, you probably don’t use your passport often. However, what if you score a great deal on a trip with a Monday departure—and the bank is closed until Monday morning? Or a college student on a semester abroad has an emergency and you need to jump on a plane? It’s best to have a passport at home in a secure, waterproof and fireproof safe.

Your will and other estate planning documents. Keeping copies of your will, your spouse’s will and any will in which you’re named the executor in a safe deposit box makes good sense. However, your original will does not belong there, especially if you are the sole owner of the safe deposit box. After your death, the bank will seal the safe deposit box until the executor can prove they have the legal right to access it. Settling your estate will be delayed until this is resolved.

Keep the original copy of your will either with your estate planning attorney, if they provide the service, or keep it where your executor or spouse can easily access it. Copies are fine in the safe deposit box. However, originals need to be accessible.

Final letters of instruction. Writing a letter of instruction to go along with your estate plan is smart. The letter can convey your wishes for medical care, if want to be buried or cremated and what kind of memorial service you want. However, if the letter is sealed up in a safe deposit box, your wishes will never be granted. Keep a letter of instruction with your original will and consider sending dated copies of the letter to anyone who you want to take action on your behalf or who is designed to receive a specific bequest.

Powers of Attorney. A POA gives authority to a third party to act on your behalf should you become incapacitated. If it’s locked in a safe deposit box and only you have access to the box, the person you want to protect you when you are incapacitated will not be able to help. Keep the original POA with the original copy of your will. Copies are fine for anyone who will need them. However, the original stays with your will.

Advance Directives. Much like the POA, your advance directives—living will and health care proxy—will be needed if you become seriously ill or injured or incapacitated. Without quick access to these advance directives, no one will know your wishes. Make sure that medical providers and family members have copies on hand.

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

Reference: Kiplinger (Jan. 4, 2023) “Things You’ll Regret Keeping in a Safe Deposit Box”

 

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Read more about the article What Is Needed in Estate Plan Besides a Will? Annapolis and Towson Estate Planning

What Is Needed in Estate Plan Besides a Will? Annapolis and Towson Estate Planning

Having a will is especially important if you have young children, says Fed Week’s recent article entitled “Estate Planning Doesn’t Stop with Making a Will.”  In your will, you can nominate guardians, who would raise your children in the event neither you nor your spouse is able to do so.

When designating a guardian, try to be practical.

Remember, your closest relatives—like your brother and his wife—may not necessarily be the best choice.

And keep in mind that you’re acting in the best interests of your children.

Be sure to obtain the consent of your guardians before nominating them in your will.

Also make sure there’s sufficient life insurance in place, so the guardians can comfortably afford to raise your children.

Your estate planning isn’t complete at this point. Here are some of the other components to consider:

  • Placing assets in trust will help your heirs avoid the hassle and expense of probate.
  • Power of Attorney. This lets a person you name act on your behalf. A “durable” power will remain in effect, even if you become incompetent.
  • Life insurance, retirement accounts and payable-on-death bank accounts will pass to the people you designate on beneficiary forms and won’t pass through probate.
  • Health care proxy. This authorizes a designated agent to make medical decisions for you, if you can’t make them yourself.
  • Living will. This document says whether you want life-sustaining efforts at life’s end.

Be sure to review all of these documents every few years to make certain they’re up to date and reflect your current wishes.  Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Fed Week (Dec. 28, 2022) “Estate Planning Doesn’t Stop with Making a Will”

 

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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?”

 

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Read more about the article Can I Protect My Family after Death? Annapolis and Towson Estate Planning

Can I Protect My Family after Death? Annapolis and Towson Estate Planning

Estate planning involves a close look at personal and financial goals while you are living and after you have died, as explained in a recent article titled “Professional Advice: Secure your future with estate planning” from Northwest Indiana Business Magazine. Having a comprehensive estate plan ensures that your wishes will be carried out and loved ones protected.

Your last will and testament identify the people who should receive an inheritance—heirs—who will manage your estate—executor—and who will take care of your minor children—guardian. Without a valid will, the state will rely on its own laws to distribute assets and assign a guardian to minor children. The state laws may not follow your wishes. However, there won’t be anything your family can do if you didn’t prepare a will.

Assets with beneficiary designations can be passed to heirs without going through probate. Certain assets, like life insurance policies and retirement accounts, allow a primary and secondary beneficiary to be named. These assets can be transferred to the intended beneficiaries swiftly and efficiently.

Many people use trusts to pass assets for a variety of reasons. For example, a trust can be created for a family member with special needs, protecting their eligibility to receive government benefits. Depending on the type of trust you create, you might be able to eliminate estate taxes. Certain trusts are also useful in protecting assets from creditors and lawsuits and ensure that assets are distributed according to your wishes.

Revocable living trusts provide protection in case of incapacity, avoid probate and ancillary probate and may provide asset protection for beneficiaries. If you are the creator of a trust—grantor—you will need to appoint a successor trustee to manage the trust if you are the original trustee and become incapacitated. Upon death, a revocable trust usually becomes irrevocable. Assets placed in the trust avoid probate, the court proceeding used to settle an estate, which can be both time-consuming and costly.

A Power of Attorney allows you to name a person who will handle your financial affairs and protect assets in the event of incapacity. That person—your agent—may pay bills, sell assets and work with an elder law estate planning attorney on Medicaid planning. The POA should be customized to your personal situation. you may give the agent broad or narrow powers.

Everyone should also have a Health Care Proxy, which gives the person named the legal right to make health care decisions on your behalf if you are unable to. You’ll also want to have a HIPAA Release Form (Health Insurance Portability and Accountability Act), so your agent can speak with all health care providers, access medical records and speak with the health insurance company on your behalf.

A Living Will is the document used to convey your wishes regarding end-of-life care if you are unable to do so yourself. It is certainly not pleasant to contemplate. However, it should be thought of as a kindness to your loved ones. Without knowing your wishes, they may be forced to make a decision and will never know if it was what you wanted. A Living Will also avoids conflicts between health care providers and family members and makes a stressful time a little less so.

Having a comprehensive estate plan provides protection for the individual and their family members. It avoids costly and stressful problems arising from the complex events accompanying illness and death. Every three to five years (or when life or financial circumstances warrant), meet with an estate planning attorney to keep your estate plan on track.

Reference: Northwest Indiana Business Magazine (Dec. 27, 2022) “Professional Advice: Secure your future with estate planning”

 

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

Read more about the article How Does Guardianship Work? – Annapolis and Towson Planning

How Does Guardianship Work? – Annapolis and Towson Planning

For family members of the estimated 6.5 million dementia patients in the U.S., it is crucial to understand whether guardianship may be an option for their loved one. A recent article from Next Avenue titled “Thinking of Becoming a Guardian?” explains how the guardianship process works and what factors go into the decision-making process.

Annapolis and Towson Estate Planning

Guardianship is the position of being responsible for someone else. State courts usually appoint a guardian to make decisions for a person, if the court finds that person to be incapacitated or unable to make safe and reasonable decisions for themselves. People who are placed under guardianship, known as “wards,” often lose their independence in making financial, legal and health care decisions.

If full guardianship is awarded, the person cannot make decisions about whether they may vote, marry, where they live, or make their own end-of-life decisions.

Two tasks that are evaluated when considering guardianship are a person’s ability to manage personal finances and to take medications as prescribed.

The court may call on a geriatrician or psychiatrist to evaluate the person’s functional behavior, cognitive function, disabling conditions and ability to meet their essential needs.

There are benefits to guardianship for someone who is not able to care for themselves. It ideally creates a safety net for a person who cannot make informed decisions for themselves.

this, of course, assumes that the guardian is honest and accountable, which is not always the case. The inconsistencies plaguing the guardianship system include minimum standards for guardians, lack of regular independent reviews of the need for guardianship and lack of educational requirements for guardians.

Once guardianship is assigned, there is a tendency for the person to become lost when no follow-up is done. The very same person who lacks capacity to care for themselves is not going to be able to advocate for themselves, contact an attorney or access funds for court proceedings.

There is also a tendency to assign full guardianship for a person, rather than less restrictive alternatives.

There are alternatives, but they require planning and discussion. More than 40% of Americans have not discussed their wishes for end-of-life care with their loved ones, according to an article in the Journal of the American Geriatrics Society. Families should have a conversation at the first sign of memory loss or when preparing for retirement regarding wishes for end-of-life care and write them down as part of an Advanced Directive—also known as a Living Will and Health Care Power of Attorney—when preparing their estate plan.

Another important document, although not legally binding, is a “Value History,” where you share your values and beliefs as they may impact care choices.

Designate a Power of Attorney and list two or even three back-up candidates. This person will be responsible for financial, legal and personal matters, avoiding the need for guardianship.

Appointing a family member or friend as a guardian is the ideal solution. However, there are instances when the best person to be a guardian is not a family member, but a court-appointed outsider. This relieves the family of being the ones who need to inform a person suffering from dementia with the news of having to move into a nursing home facility or sifting through financial records to learn that the family home is in foreclosure. The family can focus on being supportive and loving, while the guardian deals with the sometimes harsh realities of the person’s life.

Speak with your estate planning attorney to learn about how guardianship works, and whether it may be the right move for your family.

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

Reference: Next Avenue (Dec. 23, 2022) “Thinking of Becoming a Guardian?”

 

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Read more about the article Why Do I Need an Estate Plan? – Annapolis and Towson Estate Planning

Why Do I Need an Estate Plan? – Annapolis and Towson Estate Planning

Money Talks News’ recent article entitled “Why Everyone Needs an Estate Plan” reminds us that estate plans aren’t just for the wealthy. People of all ages and income levels can benefit from drafting an estate plan. An estate plan provides instructions about how your assets will be distributed, as well as how you’ll pay for your debts, final arrangements and even your medical care if you become incapacitated.

With everything stated explicitly in an estate plan, your family can work through their grief after your death instead of battling each other about who gets what.

An estate plan describes your wishes regarding how assets such as your house, vehicle bank accounts, investments and valuables will be transferred to your beneficiaries after you die. Most of this is included in your will. You’ll also name the executor of your estate in your will, as well as a guardian for your minor children, and even someone to take care of your pets when you’re no longer here.

Many people will confuse an estate plan with a will. However, that’s just a part of a comprehensive estate plan. There is much more involved in an estate plan than just who gets what after you die. An estate plan can also include your wishes, if you’re medically unable to manage your own affairs. Your plan can designate your durable power of attorney (DPA), who can make medical and financial decisions in your stead, along with medical directives on what medical procedures you do or don’t want to prolong your life.

One of the most compelling reasons to have an estate plan is that it can help avoid probate and prevent your family from winding up in court to access the assets you’ve left behind for them. Another reason to have an estate plan is to help reduce any estate or inheritance taxes imposed on your estate when your assets are transferred to your beneficiaries.

Federal estate taxes typically only apply to the very wealthy. In 2022, the threshold, or estate tax exemption, is $12.06 million, for 2023 that number is $12.93 million.

Unless your assets are valued over the applicable exemption in the year of death, you’re exempt from federal estate taxes. However, while you may be exempt from federal-level estate taxes, the state you live in may impose its own estate taxes. Some states also levy inheritance taxes on beneficiaries who receive assets from your estate.

If you are interested in designing your estate plan, contact us to speak with one of our experienced estate planning attorneys.

Reference: Money Talks News (Oct. 21, 2022) “Why Everyone Needs an Estate Plan”

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

The Basics of Estate Planning – Annapolis and Towson Estate Planning

No matter how BIG or small your net worth is, estate planning is a process that ensures your assets are handed down the way you want after you die.

Forbes’ recent article entitled “Estate Planning Basics” explains that everybody has an estate.

An estate is nothing more or less than the sum total of your assets and possessions of value. This includes:

  • Your car
  • Your home
  • Financial accounts
  • Investments; and
  • Personal property.

Estate planning is the process of deciding which people or organizations are to get your possessions or assets after you’ve died.

It’s also how you leave directions for managing your care and assets if you are incapacitated and unable to make financial or medical decisions. That is done with powers of attorney, a healthcare directive and a living will.

Your estate plan details who gets your assets. It also designates who can make critical healthcare and financial decisions on your behalf should you become incapacitated. If you have minor children, your estate plan also lets you designate their legal guardians, in case you die before they reach 18. It also allows you to name adults to safeguard their financial interests.

Your estate plan directs assets to specific entities or people in a legally binding manner. If you want your daughter to have your coin collection or your favorite animal rescue organization to get $500, it’s all mapped out in your estate plan.

You can also create a trust to safeguard a minor child’s assets until they reach a certain age. You can also keep assets out of probate. That way, your beneficiaries can easily access things like your home or bank accounts.

All estate plans should include documents that cover three main areas: asset transfer, medical needs and financial decisions. Ask an experienced estate planning attorney to help you create your estate plan.

Reference: Forbes (Nov. 16, 2022) “Estate Planning Basics”

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Read more about the article What Documents are Needed in an Emergency? – Annapolis and Towson Estate Planning Attorneys

What Documents are Needed in an Emergency? – Annapolis and Towson Estate Planning Attorneys

Most people don’t have any idea where to start when it comes to their emergency documents.  This often keeps them from going anywhere near their estate planning. This is a big mistake, says a recent article, “3 tasks your family needs to complete to ease any anxiety over unexpected emergencies,” from MarketWatch.

Estate planning is not just about wealthy people putting assets into trusts to avoid paying taxes. Estate planning includes preparing for life as well as death. This includes a parent preparing for surgery, for instance, who needs to have the right documents in place so family members can make emergency medical or financial decisions on their behalf. Estate planning also means being prepared for the unexpected.

Power of Attorney. Everyone over age 18 should have a POA, so a trusted person can take over their financial decisions. The POA can be as specific or broad as desired and must follow the laws of the person’s state of residence.

Medical Directives. This includes a Medical Power of Attorney, HIPAA authorization and a Living Will. The Medical POA allows you to appoint an agent to make health care decisions on your behalf. A HIPAA authorization allows someone else to gain access to medical records—you need this so your agent can talk with all medical and health insurance personnel. A living will is used to convey your wishes concerning end of life care. It’s a serious document, and many people prefer to avoid it, which is a mistake.

All of these documents are part of an estate plan. They answer the hard questions in advance, rather than putting family members in the terrible situation of having to guess what a loved one wanted.

An estate plan includes a will, and it might also include a trust. The will covers the distribution of property upon death, names an executor to be in charge of the estate and, if there are minor children, is used to name a guardian who will raise them.

A list of important information is not required by law. However, it should be created when you are working on your estate plan. This includes the important contacts from doctors to CPAs and financial advisors. Even more helpful would be to include a complete health profile with dates of previous surgeries, current medications with dosage information and pharmacy information.

Don’t overlook information about your digital life. Names of financial institutions, account numbers, usernames and passwords are all needed if your agent needs to access funds. Do not place any of this information in your will, as you’ll be handing the keys to the vault to thieves. Create a separate document with this information and tell your agent where to find the information if they need it.

Reference: MarketWatch (Nov. 19, 2022) “3 tasks your family needs to complete to ease any anxiety over unexpected emergencies”

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