Can I Get My Co-Executor Sister to Abide by Father’s Will? – Annapolis and Towson Estate Planning

When both children are beneficiaries and both are executors, it should be a simple result. Sell the house and split the proceeds as the father instructed. However, if one child feels this to be unfair, it can cause issues, especially when no one lives in the house, no one wants to and it just costs the heirs money each month.

Nj.com’s recent article entitled “I’m fighting with my sibling about an inheritance. What can I do?” says that this is an example of the estate planning issue of treating heirs equally rather than equitably.

An executor cannot act in his or her own personal interest. Instead, the executor must act in the best interest of the estate. They have what’s called a “fiduciary duty.” Thus, as joint executors, the two children in this example owe a fiduciary duty to implement the terms laid out in their father’s will, unless the will is successfully contested.

When real estate is left to named heirs, the executor can either sell the property and divide the proceeds as specified in the will, or distribute the house “in kind,” which means that the beneficiaries would become co-owners. If the beneficiaries don’t want to be co-owners, the best solution is to sell the property.

While neither child wants to keep the home, it’s also possible for one of them to buy out the other’s share based on a fair market value of the house. If they can’t resolve the dispute amicably, the courts will need to be involved.

The dissatisfied child could file a lawsuit contesting the will. If the deadline to do this has passed, the will should stand. Even if the child does contest the will within the required time period, it will be hard for her to succeed. The two most common grounds to contest a will are to show that the testator wasn’t competent to sign it, or to show that somebody exerted undue influence over the testator.

If the dissatisfied child doesn’t contest the will — or if she does contest it but fails — she’s legally obligated to put aside her personal desires and comply with her fiduciary duty to implement the will.

If she refuses to do so, the other child can ask the court for help resolving the matter. This would involve filing a complaint seeking to remove the dissatisfied child as co-executor and name the other as the sole executor.

He would ask the court to enter an order, called an “order to show cause.” This order states deadlines for the dissatisfied child to defend her conduct and oppose the relief requested.

While you’re not required to have an attorney for this process, it will be difficult to navigate the process without one. Contact us to work with one of our experienced estate planning attorneys.

Reference: nj.com (Aug. 9, 2022) “I’m fighting with my sibling about an inheritance. What can I do?”

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

How Do I Contest a Will? – Annapolis and Towson Estate Planning

As a beneficiary of a will, if you do not agree with how the assets are being distributed, you may have grounds for contesting the will. MSN’s recent article entitled “Contesting a Will? You Might Not Need a Lawyer” says to do this you must have a legitimate legal reason to challenge the will, such as one of the most common arguments:

  • Lack of mental capacity. If the person making the will (the “testator”) was not “of sound mind,” he or she may not understand their decisions. The testator must be able to understand what they own, who their natural heirs are and what they are giving and to whom.
  • Fraud, undue influence, or forgery. Some people are tricked into signing a will, are forced to create a will under duress, or have their signature forged.
  • Multiple wills. In this situation, the one that was made most recently is often the one that the courts will decide is valid. However, wills created immediately before death may be contested due to undue influence, lack of mental capacity, or other reasons.
  • The state requirements are not met. Every state has specific requirements as to what must be in a will, the way in which it is signed, and the number of witnesses required. If these elements are not met, then the will may not be valid.
  • Location. Some states may not recognize wills created in another state.

To contest the will, you must have legal standing, which means you must meet one of these requirements:

  • A prior will designates you as a beneficiary;
  • The current will designates you as a beneficiary;
  • You are the beneficiary of a more recent will made after the one in question; or
  • You would be an heir if there was no will, and the state’s laws of intestacy were applied.

Your attorney will next file a petition in the state probate court where the estate is under probate. This tells the probate court and the estate that you are contesting the will. If your case is not settled, it goes to court where you will make your argument as to why the will should be changed. The court will decide the outcome of your case.

A way to keep family members from fighting over an estate is add a no-contest clause into the will. This disinherits anyone who challenges a will, if their challenge fails. In order words, if you do not win your challenge, you get nothing from the estate.

Reference: MSN (May 30, 2022) “Contesting a Will? You Might Not Need a Lawyer”

 

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

When Should I Hire an Estate Planning Attorney? – Annapolis and Towson Estate Planning

Kiplinger’s recent article entitled “Should I Hire an Estate Planning Attorney Now That I Am a Widow?” describes some situations where an experienced estate planning attorney is really required:

Estates with many types of complicated assets. Hiring an experienced estate planning attorney is a must for more complicated estates. These are estates with multiple investments, numerous assets, cryptocurrency, hedge funds, private equity, or a business. Some estates also include significant real estate, including vacation homes, commercial properties and timeshares. Managing, appraising and selling a business, real estate and complex investments are all jobs that require some expertise and experience. In addition, valuing private equity investments and certain hedge funds is also not straightforward and can require the services of an expert.

The estate might owe federal or state estate tax. In some estates, there are time-sensitive decisions that require somewhat immediate attention. Even if all assets were held jointly and court involvement is unnecessary, hiring a knowledgeable trust and estate lawyer may have real tax benefits. There are many planning strategies from which testators and their heirs can benefit. For example, the will or an estate tax return may need to be filed to transfer the deceased spouse’s unused Federal Estate Unified Tax Credit to the surviving spouse. The decision whether to transfer to an unused unified tax credit to the surviving spouse is not obvious and requires guidance from an experienced estate planning attorney.

Many states also impose their own estate taxes, and many of these states impose taxes on an estate valued at $1 million or more. Therefore, when you add the value of a home, investments and life insurance proceeds, many Americans will find themselves on the wrong side of the state exemption and owe estate taxes.

The family is fighting. Family disputes often emerge after the death of a parent. It is stressful, and emotions run high. No one is really operating at their best. If unhappy family members want to contest the will or are threatening a lawsuit, you will also need guidance from an experienced estate planning attorney. These fights can result in time-intensive and costly lawsuits. The sooner you get legal advice from a probate attorney, the better chance you have of avoiding this.

Complicated beneficiary plans. Some wills have tricky beneficiary designations that leave assets to one child but nothing to another. Others could include charitable bequests or leave assets to many beneficiaries.

Talk to an experienced attorney, whose primary focus is estate and trust law.

Reference: Kiplinger (July 5, 2022) “Should I Hire an Estate Planning Attorney Now That I Am a Widow?”

 

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

What’s the Best Way to Mess Up Estate Plan? – Annapolis and Towson Estate Planning

Forbes’ recent article entitled “5 Ways People Mess Up Their Estate Plan” describes the most common mistakes people make that wreak havoc with their estate plans.

Giving money to an individual during life, but not changing their will. Cash gifts in a will are common. However, the will often is not changed. When the will gets probated, the individual named still gets the gift (or an additional gift). No one—including the probate court knows the gift was satisfied during life. As a result, a person may get double.

Not enough assets to fund their trust. If you created a trust years ago, and your overall assets have decreased in value, you should be certain there are sufficient assets going into your trust to pay all the gifts. Some people create elaborate estate plans to give cash gifts to friends and family and create trusts for others. However, if you do not have enough money in your trust to pay for all of these gifts, some people will get short changed, or get nothing at all.

Assuming all assets pass under the will. Some people think they have enough money to satisfy all the gifts in their will because they total up all their assets and arrive at a large enough amount. However, not all the assets will come into the will. Probate assets pass from the deceased person’s name to their estate and get distributed according to the will. However, non-probate assets pass outside the will to someone else, often by beneficiary designation or joint ownership. Understand the difference so you know how much money will actually be in the estate to be distributed in accordance with the will.  Do not forget to deduct debts, expenses and taxes.

Adding a joint owner. If you want someone to have an asset when you die, like real estate, you can add them as a joint owner. However, if your will is dependent on that asset coming into your estate to pay other people (or to pay debts, expenses or taxes), there could be an issue after you die. Adding joint owners often leads to will contests and prolonged court battles. Talk to an experienced estate planning attorney.

Changing beneficiary designations. Changing your beneficiary on a life insurance policy could present another issue. The policy may have been payable to your trust to pay bequests, shelter monies from estate taxes, or pay estate taxes. If it is paid to someone else, your planning could be down the drain. Likewise, if you have a retirement account that was supposed to be payable to an individual and you change the beneficiary to your trust, there could be adverse income tax consequences.

Talk to your estate planning attorney and review your estate plan, your assets and your beneficiary designations. Do not make these common mistakes!

Reference: Forbes (Oct. 26, 2021) “5 Ways People Mess Up Their Estate Plan”

 

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

Can My Power of Attorney Change My Will? – Annapolis and Towson Estate Planning

A power of attorney cannot change a properly written will. But note that an agent can make many changes to the assets in the estate, says Yahoo Finance’s recent article entitled “Can a Power of Attorney Change a Will?”

A power of attorney is a document that grants a person, known as the attorney in fact or agent, the authority to make legally binding decisions on your behalf. This can mean managing financial assets, making choices regarding medical care, signing contracts and other commitments.

Your attorney in fact can access confidential materials and their decisions are as binding as if you had made them yourself. In some instances, you may want your power of attorney to be broad and at other times you may want to limit the authority under your power of attorney by time, scope, or both.

Provided a will is valid, an attorney in fact under a power of attorney cannot modify or rewrite it. It is not within their scope of authority, even if it specifically says otherwise in their power of attorney assignment.

A will written by a power of attorney is invalid on its face.

The authority of a power of attorney typically ends once the principal (the person granting authority) dies. At that point, the principal’s legal rights transfer to their estate. The executor of the estate takes over and manages all of the deceased’s affairs from that point forward.

Thus, an attorney in fact appointed under a power of attorney cannot change a will while the principal is alive because they do not have the authority to do so. In addition, they cannot change an estate once the principal dies because their role as attorney in fact under the power of attorney ends with his or her death.

It is important to understand that a person with a general power of attorney can still change the circumstances surrounding a will. He or she can make changes to your estate—essentially, before it becomes your estate. For example, an attorney in fact can make significant financial decisions on your behalf. As a result, they may be able to restructure your personal finances according to their own best judgment. The effect is that it may invalidate sections of your will if the power of attorney dissolves or changes assets that you had assigned to various heirs. This does not always require bad faith and unfair dealing, but that can also occur.

If you include a general power of attorney as part of your elder care plan, you should discuss your estate wishes with your attorney in fact in advance. Remember that issues such as power of attorney and estate law are highly specific to each state. Talk to an experienced estate planning attorney about a power of attorney.

Reference: Yahoo Finance (Sep. 17, 2021) “Can a Power of Attorney Change a Will?”

 

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

What Do I Do with Estate Plan after Divorce? – Annapolis and Towson Estate Planning

If you forget to update your will after a divorce, you risk your assets being distributed to your ex-spouse when you pass away.

Investopedia’s recent article “Here’s what you need to remove and add to your will when your marriage is over,” says that many states have laws that, after a divorce, automatically revoke gifts to a former spouse listed in a will. There are states that also revoke gifts to family members of a former spouse. If you are in a state that has such a law, gifts to former stepchildren would also be revoked after your divorce.

Most married people leave everything in their will to their surviving spouse. If that is the way that your will currently reads, be certain that you change your ex as a beneficiary and add a new beneficiary. Remember that many types of assets are passed outside of a will, such as life insurance, 401k’s and other investments. Therefore, you must change the beneficiary designation on those documents.

Property Transfers. Update your will for any property gained or lost during the divorce. If you have assets that are specifically identified in your will, be sure to update them for any changes that may have happened because of the divorce.

The Executor of your Will. If your ex-spouse is named in your will as your executor, you should change this.

A Guardian for Minor Children. If you have children with your ex-spouse, you will want to update your will to appoint a guardian, if you and your ex-spouse pass expectantly at the same time. If you die, your children will likely be raised by your ex-spouse.

The Best Way to Change Your Will After Divorce. It is easy: tear up your old will (literally) and begin again because you probably left everything or almost everything to your spouse in your original will. Just because you are legally married until a judge signs a divorce decree, you can still modify your will or estate plan at any time. Ask an estate planning attorney because there are some actions you cannot take until the divorce is final.

Can an Ex Challenge Your Will? An ex-spouse or even ex-de facto partner can challenge the will of a former spouse or partner. Whether the challenge will be successful will depend on the court’s interpretation of a number of factors.

Reference: Investopedia (Sep. 14, 2021) “Here’s what you need to remove and add to your will when your marriage is over”

 

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

What Exactly Is a Trust? – Annapolis and Towson Estate Planning

MSN Money’s recent article entitled “What is a trust?” explains that many people create trusts to minimize issues and costs for their families or to create a legacy of charitable giving. Trusts can be used in conjunction with a last will to instruct where your assets should go after you die. However, trusts offer several great estate planning benefits that you do not get in a last will, like letting your heirs to see a relatively speedy conclusion to settling your estate.

Working with an experienced estate planning attorney, you can create a trust to minimize taxes, protect assets and spare your family from going through the lengthy probate process to divide up your assets after you pass away. A trust can also let you control to whom your assets will be disbursed, as well as how the money will be paid out. That is a major point if the beneficiary is a child or a family member who does not have the ability to handle money wisely. You can name a trustee to execute your wishes stated in the trust document. When you draft a trust, you can:

  • Say where your assets go and when your beneficiaries have access to them
  • Save your beneficiaries from paying estate taxes and court fees
  • Shield your assets from your beneficiaries’ creditors or from loss through divorce settlements
  • Instruct where your remaining assets should go if a beneficiary dies, which can be helpful in a family that includes second marriages and stepchildren; and
  • Avoid a long probate court process.

One of the most common trusts is called a living or revocable trust, which lets you put assets in a trust while you are alive. The control of the trust is transferred after you die to beneficiaries that you named. You might want to ask an experienced estate planning attorney about creating a living trust for several reasons, such as:

  • If you would like someone else to take on the management responsibilities for some or all of your property
  • If you have a business and want to be certain that it operates smoothly with no interruption of income flow, if you die or become disabled
  • If you want to shield assets from the incompetency or incapacity of yourself or your beneficiaries; or
  • If you want to decrease the chances that your will may be contested.

A living trust can be a smart move for those with even relatively modest estates. The downside is that while a revocable trust will usually keep your assets out of probate if you were to die, there still will be estate taxes if you hit the threshold.

By contrast, an irrevocable trust cannot be changed once it has been created. You also relinquish control of the assets you put into the trust. However, an irrevocable trust has a key advantage in that it can protect beneficiaries from probate and estate taxes.

In addition, there are many types of specialty trusts you can create. Each is structured to accomplish different goals. Ask an experienced estate planning attorney about these.

Reference: MSN Money (July 9, 2021) “What is a trust?

 

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

How Do I Disinherit My Child? – Annapolis and Towson Estate Planning

Disinheriting a child or any person trying to gain access to your assets after you have died requires skilled estate planning. The things that can be done before you die to protect your estate are the subjects of a recent article “Disinheriting a child” from Westfair Online. It should be noted that if you anticipate a challenge to your will, or if you suspect claims will emerge after you pass, it will be wise to prepare your estate and family members for the legal, financial and emotional aspects of an estate battle.

Here are some of the steps to consider.

Avoiding probate. The probate estate includes assets that are controlled by your Last Will and Testament on the day you die. It does not include assets where there are named beneficiaries. Such assets pass directly to beneficiaries.

Before a will can be executed, it must go through probate. Part of the probate process is the notification of any individuals who may be entitled to receive assets. If you pass away without a will, the estate still needs to be probated and those individuals must still be provided with a notice of your passing and the distribution of your assets. If you had intended to disinherit someone and did not take the necessary steps, it is as if you have issued an invitation to them.

Using a revocable trust. Trusts are used to remove assets from probate estates. A revocable trust is a trust that allows you to maintain complete control over the assets in the trust, while you are living. When you die, the trust does not go through probate and no one needs to be notified of the trust’s existence or its terms, if you so specify and state law permits. Your wishes and assets may remain private. This is especially useful, if you want to disinherit someone.

The revocable trust is not immune from contest, but it makes the challenging more difficult.

Changing titles to joint ownership and naming beneficiaries. Changing your bank, investment and real estate property ownership to joint ownership is a way to avoid probate and have assets pass directly to your intended beneficiaries. However, there are complications to this strategy. If the person you add to an account has money problems, your assets are now available to their creditors. If the person on the account goes through a divorce, your assets are legally available to their spouse. And if the joint owner should die before you, any protection you may have obtained is gone. A trust may be a better solution.

Review your retirement plans and any other assets that allow you to name a beneficiary to ensure that the person who will receive these assets is still the person you want.

What about a no-contest clause? It seems like a simple solution—by including a no-contest clause, often referred to as an “in terrorem” clause, anyone who seeks to contest the will immediately forfeits any distribution to that person, if they are not successful in the will contest. However, what if they are successful in the will contest?

Talk with an experienced estate planning attorney about these and other strategies to defuse a disinherited person’s potential claims. Disinheriting a child sparks many estate battles, so preparations need to be made to protect the family and the estate.

Reference: Westfair Online (Jan. 26, 2021) “Disinheriting a child”

 

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

What Happens When a Will Is Challenged? – Annapolis and Towson Estate Planning

What happens when estate planning does not go according to plan? A last will and testament is a legally binding contract that determines who will get a person’s assets. However, according to the article “Can you prevent someone from challenging your will?” in the Augusta Free Press, it is possible for someone to bring a legal challenge.

Most will contests are centered around five key reasons:

  • The deceased had a more recent will.
  • The will was not signed voluntarily.
  • The deceased was incapacitated, when she signed the will.
  • The will was not signed in front of the right number of witnesses.
  • The will was signed under some kind of duress or mental impairment.

What is the best way to lessen the chances of someone challenging your will? Take certain steps when the will is created, including:

Be sure your will is created by an estate planning attorney. Just writing your wishes on a piece of paper and signing and dating the paper is not the way to go. Certain qualifications must be met, which they vary by state. In some states, one witness is enough for a will to be properly executed. In others, there must be two and they can’t be beneficiaries.

The will must state the names of the intended beneficiaries. If you want someone specific to be excluded, you will have to state their name and that you want them to be excluded. A will should also name a guardian, if your children are minors.  It should also contain the name of an alternate executor, in case the primary executor predeceases you or cannot serve.

What about video wills? First, make a proper paper will. If you feel the need to be creative, make a video. In many states, a video will is not considered to be valid. A video can also become confusing, especially if what you say in the paper will is not exactly the same as what is in the video. Discrepancies can lead to will contests.

Do not count on those free templates. Downloading a form from a website seems like a simple solution, but some of the templates online are not up to date. They also might not reflect the laws in your state. If you own property, or your estate is complex, a downloaded form could create confusion and lead to family battles.

Tell your executor where your will is kept. If no one can find your will, people you may have wanted to exclude from your estate will have a better chance of succeeding in a will challenge. You should also tell your executor about any trusts, insurance policies and any assets that are not listed in the will.

Don’t expect that everything will go as you planned. Prepare for things to go sideways, to protect your loved ones. It is costly, time-consuming and stressful to bring an estate challenge, but the same is true on the receiving end. If you want your beneficiaries to receive the assets you intend for them, a good estate planning attorney is the right way to go.

Reference: Augusta Free Press (July 12, 2020) “Can you prevent someone from challenging your will?”

 

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

Should I Create a Trust? – Annapolis and Towson Estate Planning

Just 40% of adults in the United States have any kind of estate planning documents in place. That leaves 60% of adults who don’t have their property and other assets protected in the event of death.

Without planning, their family and loved ones will have trouble trying to determine what to do next.

Frequently, when thinking of estate planning, we think of a will. However, there are other options. Creating a living trust may be a better option for you and your family, advises kake.com’s recent article entitled “What Are the Advantages of Creating a Living Trust for My Family?”

The article provides some of the major benefits of a living trust.

It can save your family money. When a person with a living trust passes, the trustee takes possession and control over the trust property, according to the instructions provided by the trustor. It can be less expensive, because there are no fees that may be incurred in probate. Everything also moves faster.

Protection of your privacy. A living trust is much more private, because it does not have to go through the probate court and will not become public record. In contrast, a will becomes public record, that anyone can request to view as a court record.

A trust is for more than death. A living trust can be invoked at other times before death. The creator can add specific stipulations and conditions to the living trust to designate when the trustee can take over the management of property and finances.

More difficult to challenge. A will can be contested in court, if a family member thinks that he or she is entitled to more of your assets than was outlined in the will. A judge can rule that your will is not valid, and the contesting family member can possibly get more than you intended. With a living trust, there is much less chance that this will happen.

Creating a living trust takes legal expertise, so work with an experienced estate planning attorney. You can then discuss an entire estate planning strategy.

Reference: kake.com (April 20, 2020) “What Are the Advantages of Creating a Living Trust for My Family?”

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