Simply put, no one can predict what the future holds, but it’s preferable to at least plan for likely outcomes. Everyone needs to have a plan for what happens to their assets when they die. Wills and trusts have similar purposes, but each have their own strengths. A skilled estate planning attorney can set up one or both of these documents and have them at the ready something should happen to you or your family.
Benefits of a will:
- Choose Heirs. Preparing a Last Will and Testament ensures that your property passes to your intended beneficiaries. Without a will, the Maryland laws of intestate succession dictate who inherits the property titled in your name alone.
- Choose Fiduciaries. You can decide who your Personal Representative is in charge of handling the distribution of your assets, rather than leaving these decisions to intestacy law.
- Choose Guardians for Minor Children. You may appoint guardians to care for your minor children in your stead, rather than relatives making claims for custody and control of children’s finances.
- Manage Disputes. You can decide how and where you want your remains to be put to rest and choose who serves as your Personal Representative (the person who ensures that your wishes are carried out). Planning ahead reduces disputes among heirs and allows for less stress during traumatic times.
Executing a will with a skilled estate planning attorney gives you peace of mind that everything will be drafted to make the best use of the law to carry out your wishes. After a will is drafted, it must be signed by the testator and witnessed by two individuals to be effective. Assets that pass through an estate are dictated by the terms of your will and handled by the Personal Representative under the supervision of the Orphan’s Court and local Register of Wills.
In some situations, a will does not cover all of your estate planning goals. A trust is a more complex solution that offers extra options. They are more complex to draft, but can be tailored to fulfill certain estate planning needs that a will cannot. Most often, the trust that takes the place of your will is called a Revocable Living Trust.
A Trust can provide all the benefits of a will plus:
- Privacy. A trust is not publicly filed with the court. Your heirs and the assets passing to them remain private. The named Trustee distributes assets in accordance with the wishes you left in the trust.
- Avoidance of the time to Probate. The probate process takes at least 6-9 due to statutory timelines. A trust need not wait for court mandated deadlines.
- More powerful than beneficiaries. Oftentimes, folks receive the advice to ‘put children on an account.’ That can work wonders, but is extremely inflexible. Oftentimes, if a would-be beneficiary dies or experiences a serious health condition, families are left with no good options. A trust mimics the ease of transferring assets, but allows for every reasonable contingency to fully explored and planned for.
If you don’t have a will or Revocable Living Trust you should strongly consider creating one. A skilled estate planning attorney can assist you in making sure your estate plan is done in accordance with Maryland law with minimal headaches. If you need help with your estate plan, get in touch today by calling (410) 848-4444, or to see what others have said about us, please read our client testimonials.
By: Dennis M. Twigg, Esq.
Hoffman, Comfort, Offutt, Scott & Halstad, LLP
With 2014 drawing to a close, it’s important to consider your tax situation. The holiday season brings a commendable impulse to give gifts and be charitable, but it’s important to consider the law to make sure your gifts help everyone they are intended to. Consider this a start, but if you have questions or complex situations be sure to consult an attorney for legal advice.
- The annual gift tax exclusion for 2014 is $14,000.00. This means that you can make cumulative gifts to one person of $14,000.00 without any tax consequences.
- Remember, the gift tax exclusion is per recipient. This means that both you and a spouse are eligible to make gifts to a single person.
- Be careful of making gifts to people with special needs. Many government assistance programs are need-based and recipients can be disqualified for having too many assets.
- If you want to set aside assets for a person with special needs, consider funding a trust for their benefit. A properly crafted trust can be used to financially supplement someone’s life without endangering crucial government assistance and benefits.
- Charitable giving can reduce your tax burden and help a worthy cause. When you donate, make certain that you follow IRS guidelines so that your good deed is justly rewarded. Keep records to prove that your donations went where they were supposed.
Disclaimer – Blog Not Legal Advice – No Attorney-Client Relationship Formed by These Posts or By Any Comments, or By Comments Replying to Comments, on This Blog.
The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information and materials provided may not apply to any specific factual and/or legal set of circumstances. No attorney-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction. Past results are no guarantee of future results.
The Boston Marathon tragedy serves as a reminder that while we can’t control our destiny, we can take steps to prepare ourselves and loved ones for the worst.
Advance directives provide us with an opportunity to state our preferences for health care decisions in the event of our incapacity or pending death. It is a good idea to keep your Maryland Last Will and Testament, Living Trust, and Health Care Directive up to date.
The importance of a Last Will and Testament
- Choice of heirs. Preparing a Last Will and Testament or Living Trust ensures that your property passes to your intended beneficiaries. Without a will, the Maryland laws of intestate succession dictate who inherits the property titled in your name alone.
- Choice of fiduciaries. You can decide who is in charge of handling the distribution of your assets, rather than leaving these decisions to Maryland law.
- Disputes among heirs. You can decide how and where you want your remains to be put to rest and choose who serves as your executor (the person who ensures that your wishes are carried out). Planning ahead reduces disputes among heirs and allows for less stress during traumatic times.
- Guardians for your minor children. You may appoint guardians to care for your minor children in your stead, rather than relatives making claims for custody and control of children’s finances.
The benefits of preparing an Advance Directive for Health Care Decisions
- Choice of life sustaining medical procedures. Preparing an Advanced Directive for health care decisions (also known as a living will) allows you to share your decisions about ending or prolonging your life in different situations.
- Appoint a representative. This valuable document indicates your preference as to who has the power to make medical decisions for you if you are unable to do so.
Estate planning, while not pleasant to think about, is a necessary part of protecting your family. Everyone, even young people, should prepare these documents. Carroll County wills, estates, trusts and elder law attorneys at the law firm of Hoffman, Comfort, Offutt, Scott & Halstad, LLP have years of experience and are ready to guide you through your planning process.
One of the most difficult decisions people face when preparing their Will is who to appoint as executor/executrix – the person responsible for carrying out your wishes and administering your estate upon your death. In Maryland, the executor is known as the Personal Representative.
The job can be simple or complicated. Michael Jackson’s executors, for example, have had to deal with huge family dramas as well as an estate near bankruptcy. Fortunately for the King of Pop’s beneficiaries (his mother and children), the executors have managed to pay off Michael’s debts and have made deals for the estate that are now generating millions of dollars in revenue.
Most estates, however, require far less from their Personal Representative(s). In general, a Personal Representative’s responsibilities include:
- Filing your Will with the court and initiating probate proceedings (if required)
- Rerouting your mail, canceling credit cards, and notifying your bank, Social Security, Medicare and other governmental agencies of your death
- Setting up a bank account for your estate to handle monies received after your death and expenses that need to be paid such as outstanding debts, utility bills, mortgage payments and insurance on your property
- Identifying all of your assets and safeguarding them until it is time to distribute them to your beneficiaries. This includes protecting your personal effects from damage and theft
- Filing your final income tax returns and estate tax returns (if necessary)
- Following the provisions of your will to determine who will inherit your property, and making sure that all distributions are carried out in accordance with your wishes
- File a final report and an accounting of the estate, which must be provided to the beneficiaries and the court
Who should you chose to handle these responsibilities? The choice is yours and yours alone. It could be a relative or a close friend who is particularly well organized and responsible. In most cases, a non-professional executor will require the assistance of a wills, estates and trusts lawyer. If you anticipate a Will contest or conflicts between beneficiaries, you might prefer instead to name an attorney as Personal Representative to handle all aspects of your estate administration from start to finish. The most important thing to consider in making your choice is to find someone who is stable, financially responsible and who will fulfill their fiduciary duty to act with good faith, honesty and diligence.