Planning for Digital Assets as Part of Estate Planning – Annapolis and Towson Estate Planning

As technology continues to advance and we are increasingly living more of our lives online, it’s time to think about what our digital legacy will be, says The Scotsman in the article The ghost in the machine—what will happen to online you after death? In our increasingly digital world, we’ve shared the news almost immediately when a celebrity dies, grieved when our online friends die and been touched by stories of people online who we have never met in RL — Real Life.

Most of us have digital assets and online accounts. It’s time to think about what will happen to them when we die.

Estate planning attorneys are now talking with clients about their digital assets and leaving specific instructions about what to do with these online accounts and social media after they pass.

There’s a trend of creating video messages to loved ones and posting them online for the family to see after they pass. Facebook has a feature that allows the page owner to set a legacy contact to manage the account after the account owner has died. Other technologies are emerging to allow you to gather your digital assets and assign an individual or individuals to manage them after you die.

It is now just as important to think about what you want to happen to your digital assets as it is to your tangible, earth-bound assets when you die. What’s also important: considering what you want to happen to your data, how accessible and enduring you want it to be and how it will be protected.

People in their older years have seen amazing leaps and changes in technologies. We’ve moved from transistor radios to VHS to DVD to Blu-Ray. We’ve gone from land line home phones to smart phones that have the same computing power or more than a desktop. The first social media site was launched in 1997 and websites like Myspace have come and gone.

Will the current websites and software still be available and commonly used in five, ten, fifty, or one hundred years? It’s impossible to know what the world will look like then. However, unless a plan is made for digital legacies, it’s unlikely that your digital legacy will be accessible to others in the near and far future.

Here’s the problem: even if your executor does succeed in memorializing your Facebook page, will there be things on the page that you don’t want anyone to see after you’ve gone? There’s a wealth of data on social media to sift through, including items you may not want to be part of your digital legacy.

Consider the comparison to people who lived during previous ages. We may not be able to see their lives online, but they have left behind physical artifacts—letters, diaries, photographs—that we can hold in our hands and that tell us their stories. These artifacts will survive through the generations.

A digital estate plan can ensure that your data is managed by someone you trust. Talk with your estate planning attorney to learn how to put such a plan in place, when you are creating your legacy. Your last will and testament is a starting point in today’s digital world.

Reference: The Scotsman (May 16, 2019) The ghost in the machine—what will happen to online you after death?”

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

Will Contests May Be Rare, but They Do Happen – Annapolis and Towson Estate Planning

In an ideal world, wills and estate plans are created when people are of sound mind and body, just as the familiar legal phrase describes. The best way to avoid a will contest is to have a well-written will, prepared by a qualified estate planning attorney who can help avoid legal contest. However, there are times when this is not the case, says The Huntsville Item in the article Legal Corner: Will contests while rare are messy.”

A will is contested, when the person challenging the will believes that it does not represent the true intent of the testator to pass the estate to the people he wanted.

A will must be written in the correct form and executed according to the law in order to be valid. This is why it is necessary to work with an estate planning attorney to create a will. A person may try to do it on their own, typing it out, downloading a form or copying a form, but because the law is very strict about the form and execution, many of these do-it-yourself wills end up being deemed invalid by the courts.

When the will is not valid, the laws of intestacy are applied to the person’s estate. This is rarely in accordance with the person’s wishes, but at this point, it’s too late.

To make a will, the person must have “testamentary capacity.” That means that he or she knows what they are doing, what their estate includes and who the recipients of the estate will be. They also must not have been subject to undue influence. That means that the person making the will is so controlled and dominated by another person, that they were not able to make the will that they wanted.

When the sad day comes that a loved one passes, the family grieves. Each member will deal with the loss in their own way. For some people, the intense level of emotions can bring about conflicts. Sometimes these are the result of old battles that were never resolved. Sibling rivalry that’s been simmering for decades can emerge.

One of the goals of a properly prepared will, is to prevent any family fights after a loved one has passed.

Studies have found that the struggle over mom’s necklace or dad’s watch are not about the material items themselves, but over the symbolic meaning of those items. When families fight over inheritances, it’s rarely because of the actual item or even the money.

As the family’s older member, you want to do anything you can to avoid fracturing the family after you’ve gone.

Unless you take the steps to create a will and a strong estate plan, your loved ones could be entrenched in a long inheritance conflict that lasts years and consumes more resources than anyone can spare.  However, with careful planning, you can avoid inheritance conflicts. After all, estate planning is more for those you love than for you.

Rely on the skill and knowledge of an experienced estate planning attorney and leave your family intact.

Reference: The Huntsville Item (May 26, 2019) “Legal Corner: Will contests while rare are messy”

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

Selling a Parent’s Home after They Pass – Annapolis and Towson Estate Planning

Family members who are overtaken with grief are often unable to move forward and make decisions. If a house was not being well maintained while the parent was ill or aging, it might fall into further disrepair. When siblings have emotional attachments to the family home, says the article “With proper planning, selling a parent’s house can be a relatively painless process,” from The Washington Post, things can get even more complicated.

The difficulty of selling a parent’s home after their passing, depends to a large degree on what kind of advance planning has taken place. Much also depends on the heir’s ability to ask for help and working with the right professionals in handling the sale of the home and managing the estate. The earlier the process begins, the better.

Parents can take steps while they are still living to ward off unnecessary complications. It may be a difficult conversation but having it will make the process easier and allow the family time to focus on their emotions, rather than the sale of property. Here are a few pointers:

Make sure your parents have a will. Many Americans do not. A survey from Caring.com found that only 42% of American adults had a will and other estate planning documents.

Be prepared to spend some money. Before a home is sold, there may be costs associated with maintaining the property and fixing any overdue repairs. Save all receipts and estimates.

Secure the property immediately. That may mean having the locks changed as soon as possible. Once an heir (or someone who believes they are or should be an heir) moves in, getting them out adds another layer of complications.

Get real about the value of the property. Have a real estate agent run a competitive market analysis on the property and consider an appraisal from a licensed appraisal. Avoid any accusations of impropriety—don’t hire a friend or family member. This needs to be all business.

Designate a contact person, usually the executor, to keep the heirs updated on how the sale of the house is progressing.

The biggest roadblock to selling the family house is often the emotional attachment of the children. It’s hard to clean out a family home, with all of the mementos, large and small. The longer the process takes, the harder it is.

This is not the time for any major renovations. There may be some cosmetic repairs that will make the house more marketable, but substantial improvements won’t impact the sale price. Remove all family belongings and show the house either empty or with professional staging to show its possibilities. Clean carpets, paint, if needed and have the landscaping cleaned up.

Keep tax consequences in mind. Depending on where the property is, where the heirs live and how much money is being inherited, there can be estate, inheritance and income taxes.  It is usually best to sell an inherited property, as soon as the rights to it are received. When a property is inherited at death, the property value is “stepped up” to fair market value at the time of the owner’s death. That means that you can sell a property that was purchased in 1970 but not pay taxes on the value gained over those years.

Talk with an experienced estate planning attorney about what will happen when the home needs to be sold. It may be better for parents to create a revocable trust in advance, which will direct the sale, allow a child to continue living in the home for a certain period of time, or instruct the one child who loves the home so much to buy it from the trust. Trusts are typically easier to administer after parents pass away and can be very helpful in preventing family fights.

Reference: The Washington Post (May 16, 2019) “With proper planning, selling a parent’s house can be a relatively painless process”

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

Power of Attorney: Why You’re Never Too Young – Annapolis and Towson Estate Planning

When that time comes, having a power of attorney is a critical document to have. The power of attorney is among a handful of estate planning documents that help with decision making, when a person is too ill, injured or lacks the mental capacity to make their own decisions. The article, “Why you’re never too young for a power of attorney” from Lancaster Online, explains what these documents are, and what purpose they serve.

There are three basic power of attorney documents: financial, limited and health care.

You’re never too young or too old to have a power of attorney (POA). If you don’t, a guardian must be appointed in a court proceeding, and they will make decisions for you. If the guardian who is appointed does not know you or your family, they may make decisions that you would not have wanted. Anyone over the age of 18 should have a power of attorney.

It’s never too early, but it could be too late. If you become incapacitated, you cannot sign a POA. Then your family is faced with needing to pursue a guardianship and will not have the ability to make decisions on your behalf, until that’s in place.

You’ll want to name someone you trust implicitly and who is also going to be available to make decisions when time is an issue.

For a medical or healthcare power of attorney, it is a great help if the person lives nearby and knows you well. For a financial power of attorney, the person may not need to live nearby, but they must be trustworthy and financially competent.

Always have back-up agents, so if your primary agent is unavailable or declines to serve, you have someone who can step in on your behalf.

You should also work with an estate planning attorney to create the power of attorney you need. You may want to assign select powers to a POA, like managing certain bank accounts but not the sale of your home, for instance. An estate planning attorney will be able to tailor the POA to your exact needs. They will also make sure to create a document that gives proper powers to the people you select. You want to ensure that you don’t create a POA that gives someone the ability to exploit you.

Any of the POAs you have created should be updated on a fairly regular basis. Over time, laws change, or your personal situation may change. Review the documents at least annually to be sure that the people you have selected are still the people you want taking care of matters for you.

Most important of all, don’t wait to have a POA created. It’s an essential part of your estate plan, along with your last will and testament.

Reference: Lancaster Online (May 15, 2019) “Why you’re never too young for a power of attorney”

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

End of Life Planning to Care for Loved Ones During Grief – Annapolis and Towson Estate Planning

It’s definitely an uncomfortable thing to do. However, making funeral arrangements for yourself eliminates a lot of stress and anxiety for the family members, who are left to guess what you may have wanted. This, says the Leesville Daily Leader in the article Planning for the end of your life lets you make the decisions.

Here are some of the things to consider:

  • Do you want to be buried or cremated?
  • Do you want a funeral or a memorial service?
  • What music do you want played?
  • Do you want flowers, or would you prefer donations to a charity?
  • Do you want people to speak or prefer that only a religious leader speak?
  • What clothing do you want to be buried in?
  • Have you purchased a plot? A gravestone?
  • Who should be notified about your death?
  • Do you want an obituary published in the newspaper?

There are also estate matters that need to be attended to before you pass. Do you have a will, power of attorney, healthcare power of attorney, or a living will? Make sure that your family members or your executor know where these documents can be found.

If you do not have an estate plan in place, now is the time to meet with an estate planning attorney and have a plan created.

Your family will also need to be able to access information about your accounts: investment accounts, credit cards, utility bills, Social Security, pension, retirement funds and other assets and property. A list of the professionals, including your estate planning attorney, CPA and financial advisor, along with the names of your healthcare providers, will be needed.

If you are a veteran, you’ll need to have a copy of your DD-214 in your documents or let family members know where this is located. They will need it, or the funeral home will need it, when applying for burial benefits from the Department of Veterans Affairs and the National Cemetery Administration.

If you wish to be buried in a national cemetery, you’ll need VA Form 40-10007, Application for Pre-Need Determination of Eligibility for Burial in a VA National Cemetery. This must be completed and sent to the National Cemetery Scheduling Office. Include a copy of the DD-214 with the application.

Your family may find discussing these details difficult, but when the time comes, they will appreciate the care that you took, one last time, to take care of them.

Reference: Leesville Daily Leader (May 1, 2019) “Planning for the end of your life”

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

What If Your Executor Doesn’t Want to Serve? – Annapolis and Towson Estate Planning

When you’ve finally come to determine who you trust enough to serve as your executor, you’ll need to take the next step. It involves having a conversation with the person about what you are asking them to do. You’ll need to ask if they are willing, says the Pocono Record in the article Don’t assume person is willing to be your executor.” People are often flattered at first when they are asked about this role, but if they don’t fully understand the responsibilities, they may decide not to serve just when you need them the most.

Once your executor has agreed to act on your behalf and you have a last will and testament prepared by an estate attorney, tell your executor where your will is stored. Remember that they need to have access, in addition to knowing where the document is. If the will is kept at home in a fire-proof box or a document box that is locked, make sure to tell them where the key is located.

If you feel that the will would be safer in a bank’s safe deposit vault, you have a few additional tasks to complete. One is to make sure that your executor will be able to access the safe deposit box. That may mean adding them to the list of people who have access. They may be technically permitted to enter the box with a bank representative solely for the purpose of obtaining the last will and testament.  However, you should check with your branch first.

Once they have the last will and testament and it is filed for probate, the Register of Wills issues Letters Testamentary, which says that the executor has the authority to open the safe deposit box to inventory its contents, after proper notice is given to the state’s authorities. The executor must complete an inventory form for the authorities and any personal property in the safe deposit box must be appraised for fair market value as of the date of death. Inheritance tax will need to be paid on the value, if there is any due.

Communication is very important in the executor’s role. You may or may not want to allow them to see the will before you pass, but they will need to know where the original document can be found.

To make the next part of the executor’s job easier, create an inventory of your assets and include information they will need to complete their task. They’ll also need to know contact information and account numbers for homeowners and car insurance, veterans’ benefits, credit cards, mortgage, pensions, retirement accounts and any other assets.

Some people store their information on their computer. However, if the executor cannot access your computer or cannot get into the computer because they don’t have your password, you may want to create a hard copy document, as well as keeping information on your computer.

Taking on the role of an executor is a big job. You can show your appreciation, even after you are gone, by making all preparations for the information needed.

Reference: Pocono Record (May 1, 2019) “Don’t assume person is willing to be your executor”

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

What Are Some Advantages of Making Lifetime Gifts? – Annapolis and Towson Estate Planning

There are several non-tax advantages of making lifetime gifts. One is that you’re able to see the recipient or “donee” enjoy your gift. It might give you satisfaction to help your children achieve financial independence or have fewer financial concerns.

WMUR’s recent article, Money Matters: Lifetime non-charitable giving,” explains that lifetime giving means you dictate who gets your property. Remember, if you die without a will, the intestacy laws of the state will dictate who gets what. With a will, you can decide how you want your property distributed after your death. However, it’s true that even with a will, you won’t really know how the property is distributed because a beneficiary could disclaim an inheritance. With lifetime giving, you have more control over how your assets are distributed.

At your death, your property may go through probate. Lifetime giving will help reduce probate and administration costs, since lifetime gifts are typically not included in your probate estate at death.  Unlike probate, lifetime gifts are private.

Let’s discuss some of the tax advantages. First, a properly structured gifting program can save income and estate taxes. A gift isn’t taxable income to the donee, but any income earned by the gift property or capital gain subsequent to the gift usually is taxable. The donor must pay state and/or federal transfer taxes on the gift. There may be state gift tax, state generation-skipping transfer tax, federal gift and estate taxes, as well as federal generation-skipping transfer (GST) tax.

A big reason for lifetime giving is to remove appreciating assets from your estate (i.e., one that’s expected to increase in value over time). If you give the asset away, any future appreciation in value is removed from your estate. The taxes today may be significantly less than what they would be in the future after the asset’s value has increased. Note that lifetime giving results in the carryover of your basis in the property to the donee. If the asset is left to the donee at your death, it will usually receive a step-up in value to a new basis (usually the fair market value at the date of your death). Therefore, if the donee plans to sell the asset, she may have a smaller gain by inheriting it at your death, rather than as a gift during your life.

You can also give by paying tuition to an education institution or medical expenses to a medical care provider directly on behalf of the donee. These transfers are exempt from any federal gift and estate tax.

Remember that the federal annual gift tax exclusion lets you to give $15,000 (for the 2019 year) per donee to an unlimited number of donees without any federal gift and estate tax or federal GST tax (it applies only to gifts of present interest).

Prior to making a gift, discuss your strategy with an estate planning attorney to be sure that it matches your estate plan goals.

Reference: WMUR (April 18, 2019) “Money Matters: Lifetime non-charitable giving”

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

Are Your Company Benefit Plan Designations Up-to-Date? – Annapolis and Towson Estate Planning

On the first day of your new job, you probably talked to the Human Resources Director, who had you complete a huge stack of forms. You needed to sign off that you understood all the corporate policies and received the company handbook. You probably took a stab at how many exemptions to claim for payroll tax withholding and also completed Form I-9 affirming your eligibility to work. In the stack was most likely a form to choose a medical plan, as well as a form to designate your beneficiaries for employee benefit plans. This might include life insurance, stock purchase plans and your company’s 401(k) plan.

Forbes’s recent article, “Company Benefit Plan Designations Can Lead To A Huge Estate Planning Blunder,” says that now, you should fast-forward to when you met with your estate planning attorney to sign your estate documents. After a few meetings, you probably felt good that this was checked off your to do list.

However, assets that have a form of joint or survivor ownership, or have named beneficiaries, pass on to heirs by law and aren’t part of your probated estate. This usually applies to homes, bank and investment accounts, life insurance, retirement plans and corporate asset accumulation plans. In other words, these are all the plans and accounts where you originally named beneficiaries, but probably haven’t changed those beneficiaries since your first day of work.

When you started your job, you probably named your spouse as your primary beneficiary. If you named a contingency beneficiary, it was probably your children. The secondary designation is probably not something to which you gave a lot of thought. However, if your spouse predeceases you and if your plans designated your children as contingent beneficiaries, they would inherit all your company benefit plans at once, or upon reaching majority of age 18 or 21.

If that’s not what you want to happen, you need to review your work beneficiary designations. Chances are, you’d prefer to pass assets to your children in stages at, say, ages 25, 30, and 35. If you don’t make any changes, one of your largest bequests derived from employee stock plans and life insurance may not pass the way you want.

Talk to a qualified estate planning attorney for help concerning how your company’s benefits should be titled. The process of revising your beneficiary designations only takes a few minutes.

Reference: Forbes (April 22, 2019) “Company Benefit Plan Designations Can Lead To A Huge Estate Planning Blunder”

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

Figuring Out A Parent’s Financial Life, When They Cannot – Annapolis and Towson Estate Planning

Imagine that your parent has had a minor stroke and is no longer able to manage their financial or legal affairs. For years your parent has been living independently, waiving off offers of help or having someone come in to clean. It seemed as if it would go on that way forever. What happens, asks the Daily Times, when you are confronted with this scenario in the aptly-titled article “Senior Life: What a nightmare! Untangling a loved one’s finances”?

After the health crisis is over, it’s time to get busy. Open the door to the home and start looking. Where’s the will, where are the bank statements and where’s the information about Social Security benefits? When you start making calls or going online, you run into a bigger problem than figuring out where the papers are kept, because no one will talk with you. You are not legally authorized, even though you are a direct descendant.

This happens all the time.

Statistically speaking, it is extremely likely that your parent will end up, at some point, in a nursing home or a rehabilitation center for an extended period of time. Most people have no idea what their parent’s financial situation is, where and how they keep their financial and legal records and what they would need to do in an emergency.

It’s not that difficult to fix, but you and your hopefully healthy parent or parents need to start by planning for the future. That means sitting down with an estate planning attorney and making sure to have some key documents, most importantly, a Power of Attorney.

A Power of Attorney (POA) is a legal document that gives you permission to act on another person’s behalf as their agent. It must be properly prepared for your state’s laws.  It allows you to pay bills and make decisions on behalf of a loved one while they are alive. Without it, you’ll need to go to court to be appointed as legal guardian. That takes time and is much more expensive than having a POA created and properly executed.

If you have downloaded a Power of Attorney and are hoping it works, be warned: chances are good it won’t. Many financial institutions insist that the only POA they will accept are the ones that they issue.

Once you have a POA in place, it’s time to get organized. You’ll need to go through all the important papers, and set up a system so you can see what bills need to be paid, how many bank accounts or investment accounts exist and review her financial status.

Next, it’s time to consolidate. If your parent was a child of the Depression, chances are they have money in many different places. This gave them a sense of security but will give you a headache. Consolidate four different checking accounts into one. The same should be done for any CDs, investment accounts and credit cards. Have Social Security payments and any pension checks deposited into one account.

If you need help, and you might, don’t hesitate to ask for it. The stress of organizing decades of a loved one’s home, plus caring for them and managing the winding down of a home can be overwhelming. Your estate planning attorney will be able to connect you with a number of resources in your area.

Reference: Daily Times (April 9, 2019) “Senior Life: What a nightmare! Untangling a loved one’s finances”

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

For Immediate Release

Contact: Jane Frankel Sims

410-828-7775

Contact: Frank Campbell

410-263-1667

Sims & Campbell Estates and Trusts

Frankel Sims Law and Holden & Campbell
Merge to Form Sims & Campbell

Firm will offer comprehensive Trusts & Estates services through offices in Towson and Annapolis

TOWSON, Md. (April 26,2019)  Frankel Sims Law and Holden & Campbell have jointly announced the merger of their firms to create a boutique Trusts & Estates law firm providing comprehensive services in the fields of Estate Planning, Estate Administration, Trust Administration and Charitable Giving. The combined firm will be named Sims & Campbell and have offices in Towson, Md. and Annapolis, Md.  Jane Frankel Sims and Frank Campbell will lead and hold equal ownership stakes in the firm.

Sims & Campbell will have 9 attorneys and 15 legal professionals that handle every facet of estate and wealth transfer planning, including wills, revocable living trusts, irrevocable trusts, estate and gift tax advice, and charitable giving strategies.  The firm will focus solely on Trusts & Estates but will serve a wide range of clients, from young families with modest resources to ultra-high net worth individuals.  This allows clients to remain with the firm as their level of wealth and the complexity of related estate and tax implications change over time. 

“By joining forces, we have expanded our footprint to conveniently serve clients in Maryland, D.C. and Virginia” said Jane Frankel Sims.  We are seeing some of the greatest wealth transfer in our country’s history, and we want to continue to be on the leading edge of helping our clients maintain and enhance their family’s wealth.  In addition, we aim to serve our clients for years to come, and the new firm structure will allow Sims & Campbell to thrive even after Frank and I have retired.”    

“Jane and I have always admired each other’s firms and recognized the need to provide even greater depth and breadth of focused expertise to help families amass and protect their wealth from generation to generation,” said Frank Campbell.  “Now we have even greater capabilities to make a real difference for our clients.” 

The Sims & Campbell Towson office is located at 500 York Road, on the corner of York Road and Pennsylvania Avenue in the heart of Towson.  The Annapolis office is currently located at 716 Melvin Avenue, and is moving to 181 Truman Parkway in August, 2019.  For more information, visit www.simscampbell.law.