Read more about the article What Recourse Is Available if Inheritance Is Stolen? Annapolis and Towson Estate Planning

What Recourse Is Available if Inheritance Is Stolen? Annapolis and Towson Estate Planning

State inheritance theft laws typically cover four distinct aspects, says Yahoo’s recent article entitled “Someone Stole My Inheritance. What Are My Options?”

The four are:

  • Who committed the inheritance theft,
  • When the theft happened,
  • What was taken, and
  • How the theft happened.

As far as the “how” goes, note that inheritance theft can take many different forms. One of the most common examples involves elder financial abuse where someone takes advantage of an elderly person’s weakened physical or mental state to steal from them.

If you think someone’s stolen your inheritance, it’s important to review inheritance theft laws in your state. Again, each state has different guidelines regarding:

  • What constitutes inheritance theft,
  • Who has the standing to bring a civil claim or file a criminal complaint concerning a stolen inheritance,
  • The legal grounds for successfully pursuing an inheritance theft claim, and
  • Penalties and remedies for inheritance theft.

Speaking with an experienced estate planning attorney can help you see if you have standing and grounds to file a claim for inheritance theft. Your attorney may advise you to take certain steps to develop a case, including:

  • Taking an inventory of the estate’s assets,
  • Reviewing estate documents, such as wills or trusts, to look for any potential signs of fraud or forgery, and
  • Verifying the validity of will or trust documents.

With a larger estate, you may need to hire a forensic accountant. They specialize in examining financial documents, which may be helpful if you’re struggling to create a paper trail to support a claim of inheritance theft.

Inheritance theft laws can help to protect your rights to an estate if you think your inheritance was stolen. You can also take actions to preserve your own estate for your heirs by drafting a valid will, creating a trust and choosing trustworthy individuals to act as your executor, trustee and power of attorney.

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

Reference: Yahoo (Jan. 18, 2023) “Someone Stole My Inheritance. What Are My Options?”

 

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

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

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

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 You Need a Completed and Properly Prepared Will – Annapolis and Towson Estate Planning

You Need a Completed and Properly Prepared Will – Annapolis and Towson Estate Planning

The first two essential estate planning documents are the durable power of attorney for legal and financial matters, followed by a healthcare power of attorney. Next is the last will and testament.  However, unlike the first two, the last will is not used until after death, explains the recent article titled “Completing a will ensures wishes are clear to all” from The News-Enterprise.

A last will tells the court what you want to happen to your property and who you want to be in charge of distributing your property and settling your estate after you die. Don’t confuse your last will with a “living will,” a healthcare document used to convey your wishes for end-of-life decision making.

Jointly owned property or payable-on-death property with beneficiary designations generally pass to co-owners or beneficiaries outside of the last will. However, any property owned solely by the decedent with no beneficiary listed on the account must go through court in a probate proceeding.

The court then validates the last will and determines the rightful owner(s) of property after any bills and expenses are paid. Wishes stated in the last will guide the court in making its determination. A last will contains a lot of legal language which can become confusing. However, an estate planning attorney can explain it all.

There are three key roles in a last will: the testator, executor and beneficiary.

The testator is the person signing the last will. The executor is the person (or persons) the testator appoints to be responsible for opening and administering the probate case after death. Beneficiaries are the people who receive something from the estate.

Assets are distributed in several different ways. The testator may have made specific bequests in the last will to leave property or money to a person or a charity. The rest of the estate, called the residuary estate, is distributed among beneficiaries, divided either by fractional shares or percentages. The residuary estate may be left outright or in a testamentary trust. An outright distribution is given directly to a beneficiary, whereas a testamentary trust is held on behalf of the beneficiary and distributed over time.

Beneficiaries can become confusing. Primary beneficiaries—the individuals the testator wanted to receive part of the estate—are the first line of distribution. If the primary beneficiary is unable or unwilling to receive their inheritance, a contingent beneficiary is usually listed in the last will.

The contingent beneficiary is often listed as “per stirpes” or “pro rata” to other individuals. Per stirpes means the children of the deceased beneficiary receive that person’s share. A pro rata distribution means the deceased beneficiary’s share is divided between other beneficiaries in the last will.

Lastly, the “remote contingent” beneficiary receives the inheritance only if all of the primary and contingent beneficiaries have died. They can be extended family members, close friends, or charities.

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

Reference: The News-Enterprise (Jan. 27, 2023) “Completing a will ensures wishes are clear to all”

 

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Read more about the article Why It’s Important to Update Your Estate Plan – Annapolis and Towson Estate Planning

Why It’s Important to Update Your Estate Plan – Annapolis and Towson Estate Planning

When someone dies without having updated their estate plan for many years, the executors often face a difficult task of administering a disorganized and incomplete estate. At best, the executor needs additional time and resources to organize the estate. At worst, says a recent article titled “Estate plans require maintenance” from The Record-Courier, the decedent’s wishes and desired distributions are not followed.

Among several reasons for updating an estate plan are major life events, known as “trigger” events. These include marriage, birth, death, divorce or changed financial circumstances.

The same is true for the death of a beneficiary or changed personal relationships.

If the grantor becomes incapacitated, changes in the estate plan may become necessary if the person needs long-term care or will be receiving any kind of means-tested government benefits.

A revision of the estate plan is warranted if there is a change in one’s assets, from purchasing a new home or business, selling real property or the modification of a business venture. A growing estate may require a revised plan focused on minimizing estate tax liabilities. On the other hand, if the size of the estate has decreased significantly, an estate plan focused on tax planning may need to be revised or simplified.

Most businesses require a succession plan and the designation of a person to take control of the business upon the death of the grantor.

Finally, as assets within the estate change, the property list, often referred to as the “schedule,” should be updated. All newly acquired assets need to be titled properly, especially if the plan is for them to be owned by a trust.

Each state has different estate laws, so a move to a different state definitely requires an estate plan to be revised, as some elements of the estate plan may become invalid. For example, in some states two witnesses are required to execute a last will, while in others one witness is sufficient. If you move from a one-witness state to a two-witness state, the possibility exists for your last will to be deemed invalid.

Any changes to the estate plan desired by the grantors, such as changed distribution of assets on death or a wish to name a different person to inherit, requires a revision.

Changes in the law, especially those regarding estate taxes, also make it necessary to update an estate plan. The general recommendation is to review the estate plan every three to five years, regardless of whether any trigger events have occurred.

Establishing a comprehensive estate plan, which includes a last will, health and financial powers of attorney and any necessary trusts, and maintaining it is the best way to ensure your wishes will be carried out in case of incapacity and death.

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

Reference: The Record-Courier (Jan. 28, 2023) “Estate plans require maintenance”

 

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Read more about the article When Is Life Insurance Taxable to Beneficiaries? Annapolis and Towson Estate Planning

When Is Life Insurance Taxable to Beneficiaries? Annapolis and Towson Estate Planning

When people purchase life insurance policies, they designate a beneficiary who will benefit from the policy’s proceeds. When the life insurance policyholder dies, the policy’s beneficiary then receives a payout known as the death benefit.

Yahoo Finance’s recent article entitled “Will My Beneficiaries Pay Taxes on Life Insurance?” says the big advantage of buying a life insurance policy is that, upon death, your beneficiaries can get a substantial lump sum payment without taxation, unless the amount of the life insurance pushes your estate above the applicable federal estate tax exemption. In that case, your estate will need to pay the tax.

While death benefits are usually tax-free, there are a few situations where the beneficiary of a life insurance policy may have to pay taxes on the lump sum payout. When you earn income from interest, it’s typically taxable. Therefore, if the beneficiary decides to delay the payout instead of receiving it right away, the death benefit may continue to accumulate interest. The death benefit won’t be taxed. However, the beneficiary will typically pay taxes on the additional interest.

If a life insurance policyholder decides to name their estate as the death benefit beneficiary, the estate could be subject to taxation. When you don’t designate a person as your beneficiary, the proceeds from the life insurance policy are subject to Section 2024 of the IRS code. That says if the gross estate incorporates proceeds of a life insurance policy, the value of a life insurance policy must be payable to the estate directly or indirectly or to named beneficiaries (if you had any “incidents of ownership” throughout the policy term).

The proceeds of a life insurance policy may also pass to the estate if the beneficiary dies, and there are no contingent beneficiaries. If you have a will in place, the proceeds will be paid out according to the terms of the will. If there’s no will in place, the probate court decides the way in which to distribute your assets.

The individual insured on a life insurance policy and the policyholder are usually the same person. The policyholder then names a beneficiary. However, a gift tax may apply if the insured, the policyholder and the beneficiary are three different parties. Because the IRS assumes the death benefit was a gift from the policyholder to the beneficiary, you might have to pay gift taxes on the death benefit.

Beneficiaries usually won’t have to pay taxes on life insurance proceeds. However, some situations can result in a taxable event. Be sure that your beneficiary designations are clearly outlined in the policy to avoid taxation.

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

Reference: Yahoo Finance (Jan. 17, 2023) “Will My Beneficiaries Pay Taxes on Life Insurance?”

 

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

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

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

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

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

What happens without a will?

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

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

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

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

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

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

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

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

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

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

 

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

Read more about the article 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”

 

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

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

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

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

Annapolis and Towson Estate Planning

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

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

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

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

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

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

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

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

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

 

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Read more about the article How Does a Trust Work? Sims & Campbell Estate Planning

How Does a Trust Work? Sims & Campbell Estate Planning

You’ve worked hard to accumulate financial assets. You’ll need them to support your retirement. However, what if you also want to pass them on to loved ones? Trusts are used to pass assets to the next generation and have many benefits, says a recent article titled “Passing assets through a trust—What to know” from the Daily Bulldog- Annapolis and Towson Estate Planning.

“Funded” trusts don’t go through probate, which can be time-consuming, costly, and public. Your last will and testament become a public document when it is filed in the courthouse. Anyone can see it, from people wanting to sell your home to thieves looking for victims. Trust documents are not public, so no one outside of the grantor and the trustee knows what is in the trust and when distributions will be made. A trust also gives you the ability to be very specific about who will inherit assets in the trust, and when.

An estate planning attorney will help establish trusts, ensuring they are compliant with state law. There are three key questions to address during the trust creation process.

Who will serve as a trustee? There are several key roles in trusts. The person who creates the trust is the grantor of the trust. They name the trustee—the person or company charged with managing the trust’s assets and carrying out the instructions in the trust. You might choose a loved one. However, if they don’t have the knowledge or experience to manage the responsibilities, you could also name a corporate fiduciary, such as a bank or trust company. These entities charge for their services and usually require a minimum.

When will distributions be made? As the grantor, you get to decide when assets will be distributed and the amount of the distribution. You might want to keep the assets in the trust until the beneficiary reaches legal age. You could also structure the trust to make distributions at specific ages, i.e., at 30, 35 and 40. The trust could even hold the assets for the lifetime of the beneficiary and only distribute earned income. A large part of this decision has to do with how responsible you feel the beneficiaries will be with their inheritance.

What is the purpose of the trust? The grantor also gets to decide how trust assets should be used. The trust could designate broad categories, such as health, education, maintenance and support. The trust can be structured so the beneficiary needs to ask the trustee for a certain amount of assets. Other options are to structure the trust to provide mandatory income, once or twice a year, or tie distributions to incentives, such as finishing a college degree or purchasing a first home.

An estate planning attorney will explain the different types of trusts, and which one is best for your unique situation. There are many different types of trusts. You’ll want to be sure to choose the right one to protect yourself and your loved ones.  Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Daily Bulldog (Dec. 24, 202) “Passing assets through a trust—What to know”

 

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