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”

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Read more about the article What Is Probate?- Annapolis and Towson Estate Planning

What Is Probate?- Annapolis and Towson Estate Planning

Investopedia’s recent article, “What Is Probate Court?” explains that people want to avoid or shorten the probate process because of its length and expense. This can be accomplished by creating a living trust, assigning your assets to it and naming beneficiaries for those assets. A living trust is an estate planning tool that can help you avoid probate’s usually lengthy, sometimes costly, and always public nature.

Some assets, including life insurance and retirement accounts, are not generally subject to probate. You instead designate beneficiaries for them in the account paperwork held by the life insurance company, retirement plan, brokerage, and bank. As a result, these funds will flow directly to the beneficiaries upon your death.

Another way to reduce probate is to give gifts during your lifetime. Anyone can provide individuals with tax-free money in the form of gifts, as defined by the IRS.

At a probate court hearing, the judge will list the responsibilities of the executor of the will, including contacting any beneficiaries and creditors, appraising the deceased’s assets and paying any outstanding creditors and taxes.

At the second court hearing, the judge will ensure that all these tasks have been accomplished and close out the estate, so that the transfers of money and other assets in the estate may start.

Each state has specific probate laws to determine what’s required. Unless someone has no assets or descendants when they die, probate may still be necessary to settle the deceased’s remaining affairs, including debts, assets and paying their final bills and taxes.

While it can be hard to avoid probate court altogether, some ways to avoid probate include creating a living trust, naming beneficiaries clearly on all investment, bank and retirement accounts, and establishing joint ownership for certain assets.

The time for probate varies depending on the deceased person’s assets, the complexity of their will and other factors. For instance, the executor may have to liquidate assets to pay creditors, and selling a home or other property for this purpose can take time. However, the average time it takes to complete is about nine months.

After someone dies, the grief over their loss can be all-consuming for their family and friends.  Unfortunately, the probate process can add to this a financial and administrative burden. Yet, with or without a will, the probate process is essential to ensure that all of one’s affairs are in order before death.

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

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

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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 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

Read more about the article What are Some Best Practices for a Trustee? Annapolis and Towson Estate Planning

What are Some Best Practices for a Trustee? Annapolis and Towson Estate Planning

Forbes’ recent article entitled “How To Be An Effective Trustee” provides some great best practices for those asked to be a trustee.

  1. Make a team. No one person can have all the necessary skills and experience to be an effective trustee. Work with an experienced estate planning attorney, an investment advisor and a tax accountant knowledgeable about the taxation of trusts. It’s a good practice for the trustee to have regular meetings with the team of advisors, both as a team and individually.
  2. Understand the key trust terms. Understand what the trust document says and what the key terms mean. When you are named as trustee, a best practice is to read the entire trust document and go through the document with an attorney and have them explain the key terms. Some of these key terms may involve the following:
  • Distribution standards;
  • Special provisions for investing, particularly direction to sell or not to sell certain assets;
  • Provisions the trustee should act upon, like the power to appoint a successor; and
  • Knowing whether the beneficiary’s age will trigger distributions or any other actions.
  1. Work productively with beneficiaries. Dealing with beneficiaries is frequently the most challenging part of being a trustee. There can be differences of opinion over distribution amounts, investment strategy, or other matters relating to the management of the trust which can lead to disagreement. To avoid potential issues with beneficiaries and facilitate a productive relationship, trustees should try to practice following:
  • Communication
  • Transparency
  • Education
  • Clear Distributions; and
  • Providing Required Information.
  1. Documentation is Crucial. Although trustees can’t guarantee perfect results, they must act with care, skill and impartiality. They must have rational reasons for their decisions and documenting them is critical because it substantiates the trustee’s decision-making. Some examples of decisions that should be thoroughly documented include:
  • Distribution Decisions
  • Decisions That Set Investment Policy
  • Initiation or Termination of Investments and Hiring and Firing Investment Managers/Funds
  • Principal and Income Allocations;
  • Verbal Communications with Beneficiaries; And
  • Decisions to Hire Experts or Agents, like an attorney or an accountant.

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

Reference: Forbes (May 31, 2022) “How To Be An Effective Trustee”

 

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

Read more about the article How Can I Relieve My Family’s Stress when I Die? Annapolis and Towson Estate Planning

How Can I Relieve My Family’s Stress when I Die? Annapolis and Towson Estate Planning

After losing a family member, people experience pain and grief. The situation gets worse if legal issues are involved, resulting in family conflicts. Such challenges are typically the result of a lack of planning when they could have been much easier if a good plan had been in place, says Scubby’s recent article entitled “7 Ways To Ease Your Loved Ones’ Suffering After You Die.” Let’s look at some ways to avoid problems after you pass away.

  1. Create an Estate Plan. This is the first step you can take in making your family’s life easier. Your heirs will inherit your estate after you die. If you don’t have a written estate plan, it can be more difficult.
  2. Maintain a Binder for Documents. Store all of your important documents and information in a master document binder or some other system. Include important documents and information about your bank accounts, credit cards, investment accounts and information about your digital assets, such as emails, online banking, social media accounts and any other digital assets that you own. You should also give information that your family will need to access these documents and information.
  3. Buy Life Insurance. It’s smart to purchase life insurance as part of your basic estate plan. The loss of a family member can result in confusion, worry and anxiety regarding finances. Those left behind can sometimes wonder how to pay for necessities after a family member dies, so an insurance policy can solve that problem. This will give your family a financial cushion that will provide them with some breathing room.
  4. Write An Instruction Letter. A last letter of instructions for your family is smart, in addition to your estate plan. This gives you the chance to express your love and affection to each of your family members. You can also state where you want to be buried or if you’d like to be cremated, and what kind of memorial service you would like. Your testament doesn’t appear in this document. It only lets you state your final wishes about each of these matters. It has no real legal significance.
  5. Prepare Them Emotionally. It’s hard to comprehend the truth of death for you and your family. They’ll go through the grieving period without you, and to help them emotionally, you can honor the people in your life who matter most; offer an apology to those you have hurt; and/or forgive your loved ones, if they have hurt you.
  6. Pre-plan Your Funeral. To ease the burden on your family at your death, pre-plan your funeral. This means you’ve made your funeral arrangements and chosen what you want as part of your funeral services.
  7. Collect Important Documents and Contact Information. Organize important documents in a folder. This should include info on bank accounts, mortgages, insurance policies, employer contact information, estate planning, safe combinations and Social Security information. Make a list of close friends and family members, including their contact info, for your loved ones to contact in the event of your death.

This list of things you can do to ease the burden on your family isn’t exhaustive. However, it’s certainly helpful.

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

Reference: Scubby “7 Ways To Ease Your Loved Ones’ Suffering After You Die”

 

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

What are the Advantages of Putting Your Home in a Trust? Annapolis and Towson Estate Planning

Property trusts allow you to place your personal residence or any property you own into a trust to be given to a beneficiary, explains a recent article, “When Should I Put My Home in a Trust,” from yahoo!life.com. Placing your home in a property trust makes it far more likely your home will go to its intended beneficiary.

The property trust can be a revocable or irrevocable trust. Which one you use depends on your unique circumstances. If it’s a revocable trust, you can change the terms of the trust up until your death. However, because you maintain control of the asset in a revocable trust, it’s not protected from creditors.

If the main reason you’ve put the house into a trust is to protect it from creditors, a court could reclaim the asset if it were determined the sole reason for the transfer into the trust was to elude creditors.

Generally speaking, people have three basic reasons to place their homes into property trusts—to avoid probate, to keep their transaction private and to keep the transfer simple.

Avoiding probate. People who put their homes in a property trust often do so to avoid having their home going through the probate process. When the owner dies, their estate goes through this court process and any debts or taxes owed on the property are paid. If there is no will giving direction to how the property should be distributed, then it is distributed according to the state’s laws.

If the home is not in a trust and not mentioned in a will, the property will usually go to a spouse or child, although there’s no guarantee this will happen. If there is no spouse and no offspring, the property will go to the next closest living relative, such as a parent, sibling, niece, or nephew. If no living relative can be found, the state inherits the property.

Chances are you don’t want the state getting your family home. Having a will, even if you don’t put your property into a trust, is a better alternative.

The cost and time of probate is another reason why people put their homes in trusts. Probate costs are borne by the estate and thus the beneficiaries. Probate also takes time and while probate is in process, homes need maintenance, taxes need to be paid and costs add up. If the house is sitting empty, it can become a target for thieves and property scammers.

Another benefit of a property trust is to keep the transfer of the home private. If it goes through probate, the transfer of property becomes part of the court record, and anyone will be able to see who inherited the home. When family dynamics are complicated, this can create long-lasting family battles.

A property trust is also far simpler for your executor, especially if the home is in another state. If you have a vacation home in Arizona but live in Michigan, your executor will have to navigate probate in both states.

Speak with an estate planning attorney about whether a property trust is right for you. They will create a property trust and transfer the property into the trust. This is a straightforward process. However, without the guidance of an experienced professional, mistakes can easily be made.

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

Reference: yahoo!life.com (Jan. 31, 2023) “When Should I Put My Home in a Trust”

 

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