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

Can a Power of Attorney Withdraw Money from Bank Account? Annapolis and Towson Estate Planning

A power of attorney, or POA, is a legal document giving another person the legal authority to make financial and legal decisions on your behalf. Known as an agent or attorney-in-fact, you should only name someone to be your POA, if you trust them implicitly and believe they will always manage your affairs with your best interest in mind, according to the recent article titled “Can A Power Of Attorney Transfer Money To Themselves?” from Washington Independent.

There are different types of power of attorney and ethical and legal considerations surrounding the transfer of money. The two main types of POA are general POA and durable POA. A general POA gives the agent broad authority to handle financial and other matters on your behalf, and the power ends if you become incapacitated. A durable POA remains in effect, if you become incapacitated and continues until your death or until it is revoked.

The powers given to an agent vary widely depending on the state laws governing the document, and also vary depending on the specific document. In general, an agent can use the POA to handle a wide range of financial matters, including paying bills, managing investments, buying and selling real property and signing legal documents.

Using non-state specific blank forms downloaded from the web leads almost always leads to complicated (read: costly and time-consuming) problems for an agent. The specific powers granted to the agent need to be spelled out in the document. For example, you may wish for your POA to manage paying household bills, but not to sell the house.

There are also ethical considerations. While the POA gives the agent the authority to transfer money on your behalf, they are fiduciaries and are held to a higher standard of ethics. They must act in your best interest at all times.

Transferring money from your account to the agent’s account for their benefit would be a clear violation and could result in legal consequences, including criminal charges. The transfer could be challenged in court and the agent could be held accountable for any damages.

If you are concerned about a person abusing this role, there are steps to take to minimize the risk.

  • Chose a trustworthy and reliable person to serve as your agent.
  • Limit the powers granted by having a customized Power of Attorney drafted by an experienced estate planning attorney. The document could specify that the agent is not permitted to transfer money to themselves or use your funds for their personal benefit.
  • Monitoring the action of the agent. If you are incapacitated, name a person to monitor the agent and provide them with contact information for your estate planning attorney if there are any questions.

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

Reference: Washington Independent (Feb. 7, 2023) “Can A Power Of Attorney Transfer Money To Themselves?”

 

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

Read more about the article What Should I Know About Probate Costs? Annapolis and Towson Estate Planning

What Should I Know About Probate Costs? Annapolis and Towson Estate Planning

The cost of probate depends on several factors. One of the most important is the state where the decedent lived. The cost of probate varies from state to state, depending on the general cost of living in the state and state probate laws. Other factors also impact the cost of probate.

Nasdaq. Com’s recent article entitled “How Much Does Probate Cost?” provides a breakdown of fees associated with probate. The process of probating an estate will settle the estate after the decedent’s death and following their last will and testament. It’s also used for those who die without a will or intestate. Assets owned only by the decedent are usually addressed in the will and are distributed according to the decedent’s wishes. An executor is usually named in the will, and an administrator of the estate is appointed in the case of a decedent dying intestate. The executor takes an inventory of the decedent’s assets, pays the decedent’s outstanding debts and presents the inventoried estate to the court for settlement. If there are no objections to the will, the estate is closed. If there are objections, the probate judge is responsible for settling them. The longer the probate process drags on, the more expensive it will be.

Probate can be a time-consuming process. A modest estate may take six to 24 months to settle. Larger estates can take even longer, if they’re complex.  It also necessary to add in more time if the will’s contested or beneficiaries can’t be found. The longer the process, the more expensive it becomes. Probate costs in 2021 run about 3% to 8% of the value of the estate. Let’s look at the key costs of probate:

Court Costs. This includes filing fees. Some states require the same filing fee for all estates, while others have a graduated scale depending on the size and complexity of the estate. The more complex the estate, the higher the court costs.

Executor Costs. The executor of a will is typically paid at least a nominal fee. Fees are mandated by state law, unless the decedent specifies in his or her will what the executor should be paid. Some states permit a flat and “reasonable” fee which may be determined by the court. Other states require a graduated fee, such as a certain percent of the estate for the first $100,000 and so on. If the Will doesn’t state the executor’s fee or if the decedent dies intestate, the court determines the executor’s fee.

Accounting Fees. Accounting costs can be high with more complex estates. If the decedent has complicated business affairs to sort out or owns many stocks and other securities, the complexity will require higher accounting fees. The accountant will also have to file federal and state taxes in the form of a final return.

Attorney Fees. When the executor believes an attorney is needed, the attorney is paid out of the estate. Attorney’s fees can be state-mandated, determined by the court, or set by the attorney depending on the anticipated workload.

Estate Administration Fees. The executor will often incur significant costs of administering the estate, such as property appraisals, and a real estate agent may have to be hired and paid to dispose of property or businesses. A property may also have to be managed until it’s sold, or the estate is closed.

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

Reference: Nasdaq.com (Feb. 2, 2023) “How Much Does Probate Cost?”

 

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

What are the Big Emotional Issues in Estate Planning? Annapolis and Towson Estate Planning

The largest-ever generational wealth transfer is here: more than $68 trillion is flowing from baby boomers to their adult children.

MarketWatch’s recent article entitled “When it comes to estate planning ‘you have to get to the core emotional issues’” says financial advisers and estate planning attorneys have helped their aging clients shift from wealth accumulation to wealth preservation. The next challenge is legacy planning—and that creates a number of issues.

A significant component of legacy planning is trying to get different generations of a family to accept the patriarch and matriarch’s wishes. If the millennials—the adult kids—can accept their parents’ inheritance plan, there’s less chance for disputes when the money is transferred.

Calm, cool rationality is severely lacking when some families address issues tied to cross-generational wealth. Things can get heated.

Retirees will often ask their financial adviser or estate planning attorney to serve as a buffer to deal with the younger generations. As the children ask for information about their parents’ assets, this professional becomes the point person.

People usually act on emotional reasons, not intellectual reasons. Therefore, you have to get to the core emotional issues, not just give logical arguments when facilitating wealth transfer within families, experts say.

If the family has major dysfunction, bringing in another professional, like a therapist, is usually a good first step to get everybody to the point they can have a polite conversation.

In most cases, however, it’s not that serious. Advisers confront petty squabbles and field calls from family members with clashing interests. Meetings can be concluded by asking permission to share what they’ve said with other family members. That allows gatherings of the entire family can be more productive.

Advisers typically set ground rules when helping families work through intergenerational strife. For example, they might ask everyone to listen for understanding, rather than agreement. That means paraphrasing or asking clarifying questions to confirm they understood what they heard before they rush to make their point. It’s good to caution family members to temper their expectations. If someone is absolutely determined to get their way at all costs, it’s a red flag.

Financial advisers and estate planning attorneys will also ask questions to uncover people’s motivations.

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

Reference: MarketWatch (Dec. 24, 2022) “When it comes to estate planning ‘you have to get to the core emotional issues’”

 

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

Read more about the article What Is an Estate Planning Checkup? Annapolis and Towson Estate Planning

What Is an Estate Planning Checkup? Annapolis and Towson Estate Planning

The start of the year is the time to review and revisit your estate plan. Just like going to the doctor and dentist for regular exams, it’s basic self-care. A recent article from Kiplinger, “Need an Estate Planning Checkup? Now is the Perfect Time,” advises having an annual checkup with your estate planning attorney before anything goes wrong.

Estate planning is about people. It ensures that loved ones will be protected when we are no longer here. It names someone we trust to administer our estate and follow our wishes. It also ensures that no one is left out or no one is wrongfully included.

After the holiday season of family gatherings is a good time to review the family situation. Children have grown into adulthood. Perhaps they’ve married and had children. What we planned to leave for them as minors may be different now. If your family suffered a loss last year, it may be time to reallocate funds or change beneficiaries.

This is the time to evaluate who you have named as an executor or entrusted with powers of attorney. They may have had their own health issues, suffered memory loss, or undergone their own life changes. These should also be reviewed when creating a new will or trust.

Property values have probably changed over the years. Real estate acquired decades ago may have appreciated far more than anticipated. If the intent is to leave equal shares of assets to beneficiaries, the new value of the property needs to be considered.

Depending on your assets, you may need to engage an expert to provide current valuations for real property, artwork and any other high-value assets. If you expect to see significant changes in the coming year, from selling property or making other adjustments, don’t wait until next year to order a new valuation. The more current your numbers, the better your estate plan.

Tax laws have changed a great deal in recent years. An experienced estate planning attorney will allow you to maximize the estate that you leave. Estate tax and gift taxes have been adjusted for inflation, so you may be able to leave larger gifts to children and grandchildren.

Your estate plan checkup should include a review of recent tax law changes, and a look at the legal environment for the coming year. Discuss how aggressive you want to be with your estate planning. The same goes for life changes which may have legal consequences. All of this needs to be discussed in a candid manner with your estate planning attorney.

You may leave your meeting with a to-do list, or you may find your estate plan still works. Either way, you’ll feel better after your estate plan checkup.

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

Reference: Kiplinger (Jan. 30, 2023) “Need an Estate Planning Checkup? Now is the Perfect Time”

 

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

Read more about the article What are the Components of an Estate Plan? Annapolis and Towson Estate Planning

What are the Components of an Estate Plan? Annapolis and Towson Estate Planning

Estate planning doesn’t have to be challenging. It’s also one of the most thoughtful steps you can take for the people you care about. Estate planning is the process of who will handle your estate and receive possessions after your death, according to a recent article titled “10 Essential Estate Planning Documents You Need” from The Street.

There are important legal documents making up your estate plan, each with different options.

Last will and testament. The will designates who receives specific assets and property after you die.  However, it is only such assets or property subject to probate. This includes tangible assets, like your home and personal belongings, as well as intangible assets, like bank and investment accounts and digital assets. Beneficiaries are those who will receive assets. They may be family members, close friends, or charitable organizations. Your will is also used to specify guardians for your children and choose an executor, the person you trust to carry out the wishes expressed in your will.

Revocable living trust. This is a legal entity created to distribute possessions after you pass away. However, it is different than a will. A revocable living trust is a legal entity that owns the assets placed in the trust, while permitting you, the grantor, to have access to them while living. The revocable living trust spares heirs from having to wait until probate is completed to receive inheritances. The living trust allows for rapid and private transfer of assets after death.

Beneficiary designations. Any asset with a beneficiary designation will pass directly to the beneficiary and is not subject to probate. However, you must designate a beneficiary for each account and keep them current. This is especially important if there has been a divorce and your prior spouse’s name appears as a beneficiary on any assets, such as life insurance policies or deeds.

Advance Healthcare Directive (AHCD)/Living Will. This document is used to specify what medical care you want if you are unable to convey your wishes yourself. AHCD documents typically include a living will and a medical power of attorney. These documents may relate to types of treatments, end-of-life care, artificial respiration etc.

Financial Power of Attorney. A POA allows you to appoint another person to manage funds and property on your behalf. If you need medical attention, the POA can authorize the use of assets to pay for expenses and provide for your family when you are unable to do so.

Insurance policies and financial information. All insurance policy documents, including life, health, auto, long term care and home insurance, should be kept in one location. You should also have a list of all financial accounts, including access information. You could keep this information in a notebook, or on an encrypted document on your personal computer.

Proof of Identity Documents. Discharge papers from the armed forces, Social Security card, Medicare card, birth, marriage, divorce certificates, prenuptial agreements and divorce settlements and passports should all be accessible to your trustee or executor.

Titles and Property Deeds. An inventory of titles and deeds should be done when any type of trust is created to ensure that the properties are correctly placed in the trust. Names on titles or deeds supersede your will. If your spouse is named as a joint owner on the house deed, they legally possess the property, regardless of what is in your will.

Digital assets. Most Americans under age 70 have an estimated 160 digital accounts. Consider using a password manager or secure digital vault to help you manage your login credentials. You’ll also want to name a digital executor in your will, so they can oversee or cancel digital accounts and distribute digital assets.

Funeral instructions. While documents about your funeral and any memorial services aren’t legally binding, it’s better to tell your family what you want to happen at your funeral. If you have purchased a burial plot and paid for your funeral, make sure the family members know where the documents are. Whatever your wishes, write them down and share them with family members.

Once you have your estate plan together, protect these documents by keeping them in a fire-and waterproof box in your home. Copies of the documents should be distributed to anyone who needs them. For example, a copy of your advance healthcare directive should be sent to your healthcare agent and your primary care doctor. Your executor should have a copy of your will. Review these documents every three to five years, or after any significant life events.

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

Reference: The Street (Jan. 31, 2023) “10 Essential Estate Planning Documents You Need”

 

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

Read more about the article How Does Estate Planning Work for Caregiving Children? Annapolis and Towson Estate Planning

How Does Estate Planning Work for Caregiving Children? Annapolis and Towson Estate Planning

This situation requires considered estate planning to protect the arrangement, both for the parent and child, in the event of the parent’s incapacity and what may happen, if and when the parent needs to move to a care facility and/or passes away.

If the child is caring for the parent at the parent’s home, the parent’s estate planning often gives the child the ability to remain at the parent’s residence. It may also allow the child to access the parent’s bank accounts, if the parent becomes mentally incapacitated. A recent article from Lake County Record-Bee, “Estate planning for parents with caregiver children,” says if the planning is not done correctly, a series of unintended problems may arise, including disagreements with other family members and allegations of elder abuse, especially financial abuse.

Agreed-upon terms of any living arrangement should be included in the parent’s estate planning documents. If the parent has a living trust, the trust may allow the child to remain in the family home, so the document must clearly state the terms of the living arrangement. If the parents live in a rental property, the POA may be used to authorize the child’s continued occupancy and use of the parent’s money to pay household expenses. The rental agreement would need to include the child as a tenant.

What if the parent lives in the child’s home? The child’s estate plan would need to reflect on what terms the parent may remain in the child’s house, if the child were to become incapacitated or die unexpectedly. Consideration would also need to be given to how the parents receive care.

If the parent dies or moves into a nursing home or when the child moves out, the arrangement ends. What happens next? It depends on the situation. The parent may leave the residence to the adult care giver child. The following also to be addressed: how are expenses, including the mortgage, to be paid and is there an expressed transition period before the child moves out?

If the parent intends to leave the family home to the adult care giver, the estate planning documents need to gift the residence to the adult caregiver. This may include lifetime gifting, or it may entail renting the residence to provide income for the parent’s needs.

If there are siblings, or a spouse from a second marriage, the estate planning documents need to say whether and how other family members participate in the residence. The parents may want to gift the residence to all children, subject to an exclusive life estate for the care giver to live in the family home. When the care giver child becomes incapacitated or dies, the family home is usually sold, and the sale proceeds divided between the parent’s living descendants.

Something to be careful about: if the caregiver child is treated more favorably than siblings. While the parents are entitled to make their own decisions about how to distribute assets, a disgruntled sibling may object to how assets are distributed. An estate planning attorney will be able to formally document the parent’s wishes and prepare the estate for any challenges.

Finally, if no advance planning is done, it is possible the parent may end up needing a guardian and conservator to care for their finances and their well-being, respectively, if they become incapacitated. This becomes an expensive situation, and the result of court-supervised administrators may not agree with how the parent wished their affairs to be handled.

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

Reference: Lake County Record-Bee (Feb. 4, 2023) “Estate planning for parents with caregiver children”

 

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

Read more about the article Do You Need a Revocable or an Irrevocable Trust? Annapolis and Towson Estate Planning

Do You Need a Revocable or an Irrevocable Trust? Annapolis and Towson Estate Planning

It’s not always obvious which type of trust is the best for an individual, says a recent article titled “Which is Best for Me: A Revocable or Irrevocable Trust?” from Westchester & Fairfield County Business Journals.

In a revocable living trust (RLT), the creator of the trust, known as the “grantor,” benefits from the trust and can be the sole Trustee. While living, the grantor/trustee has full control of the real estate property, bank accounts or investments placed in the trust. The grantor can also amend, modify and revoke the trust.

The goal of a revocable trust is mainly to avoid probate at death. Probate is the process of admitting your last will and testament in the court in the county where you lived to have your last will deemed legally valid. This is also when the court appoints the executor named in your last will. The executor then has access to the estate’s assets to pay bills and distribute funds to beneficiaries as named in the last will.

Probate can take six months to several years to complete, depending upon the complexity of the estate and the jurisdiction. Once the estate is probated, your estate is part of the public record.

A revocable living trust and the transfer of assets into the trust can accomplish everything a last will can. However, distribution of assets at the time of death remains private and the court is not involved. Distribution of assets takes place according to the instructions in the trust.

By comparison, irrevocable trusts are not easily revoked or changed. Most irrevocable trusts are used as a planning tool to transfer assets for the benefit of another person without making an outright gift, or for purposes of Medicaid or estate tax planning. An Irrevocable Medicaid Asset Protection Trust is used to allow an individual to protect their life savings and home from the cost of long-term care, while allowing the trust’s creator to continue to live in their home and benefit from income generated by assets transferred into the irrevocable trust.

The grantor may not be a trustee of an irrevocable trust and the transfer of assets to a Medicaid Asset Protection trust starts a five-year penalty period for Nursing Home Medicaid and a two-and-a-half-year penalty period for Home Care Medicaid for applications filed after March 1, 2024. After the penalty (or “look back”) periods expire, the funds held by the trust are protected and are not considered countable assets for Medicaid.

An irrevocable trust can also be used to transfer assets for the benefit of a loved one, friend, child, or grandchild. Assets are not controlled by the beneficiaries but can be used by the trustee for the beneficiary’s health, education, maintenance and support.

Trusts are used to reduce the size of the taxable estate, to plan for the well-being of loved ones, and to protect the individual and couple if long-term care is needed. Speak with an estate planning attorney about which trust is best for your unique situation.

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

Reference: Westchester & Fairfield County Business Journals (Jan. 26, 2023) “Which is Best for Me: A Revocable or Irrevocable Trust?”

 

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

Read more about the article Top Benefits of Estate Planning – Annapolis and Towson Estate Planning

Top Benefits of Estate Planning – Annapolis and Towson Estate Planning

Despite the hard lessons learned during the COVID pandemic, surveys repeatedly show most Americans still don’t have an estate plan in place. According to the article “Five benefits of estate planning” from The Aspen Times, a comprehensive estate plan ensures your assets are distributed according to your wishes when you die, minimizes taxes on your estate and protects your loved ones, especially those who depend on you financially. In addition, estate planning protects you while you are living and ensures that your wishes are followed, if you become incapacitated.

Protect Yourself and Your Assets During Your Lifetime. No one likes to consider themselves at risk of incapacity. However, this happens. If you become mentally or physically incapacitated during your lifetime, you might not be able to earn income, or make decisions for yourself. Part of an estate plan includes documents to address these risks to protect yourself, your family and your assets.

Designating a health care proxy and a power of attorney gives people you choose the ability to make decisions on your behalf. Otherwise, the responsibility for your medical, legal and financial decisions may go to someone you don’t even know.

Asset Distribution. Without a last will, your home state’s laws govern the distribution of your assets. Your intentions to care for certain individuals won’t be relevant, as the law itself decides who gets what. A last will is used to state exactly how you want assets to be distributed. Your last will should be updated as your financial situation and/or family dynamics change. You should also review designated beneficiaries on investment accounts and insurance policies regularly and especially after any major life changes.

Minimize Transfer Taxes. While there’s no way to predict what taxes will take effect in the future, it’s safe to assume there will be taxes on your estate. If you hope to leave wealth of any size to your family, proper estate planning is crucial. There are many different strategies to minimize taxes on inherited wealth, including life insurance, Roth IRA conversions, lifetime giving and trusts. Your estate planning attorney will be able to create a plan suited for your unique situation.

Protect Family Wealth. As people accumulate wealth, they often become the targets of frivolous lawsuits. For this reason, placing assets in certain types of trusts can ensure efficient wealth transfer, as well as protecting assets from predators and creditors.

Create and Continue a Legacy. Legacy planning is part of the estate planning process. Many people donate money or assets on their death to causes they supported during their lifetime. These goals can be achieved by contributing to a donor advised fund, creating a family foundation or setting up a philanthropic trust.

Creating an estate plan is also a useful tool for having candid discussions with the family about the future, avoiding future conflicts and making your estate administration easier for loved ones.

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

Reference: The Aspen Times (Jan. 24, 2023) “Five benefits of estate planning”

 

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