|
Estate Planning
|
|
Tax and Business Succession
Planning
|
|
Trust Creation and Implementation
|
|
Life Insurance Trusts
|
|
Trust and Estate Administration
|
|
Real Estate
|
|
Business
Law
|
|
Retirement
Planning
|
|
Estate and
Gift Taxation
|
|
Elder Law
|
|
Guardianships
|
|
Wills
|
|
Probate
|
|
Contested
Wills
|
|
|
Estate Planning
Do I need a
revocable (living) trust in order to avoid
estate taxes?
Absolutely not! Estate tax
planning can be incorporated into a last will
and testament just as it can be incorporated
into a revocable trust.
What is
the purpose of a durable power of attorney?
If you are incapacitated in
any way and unable to handle your financial
affairs, the durable power of attorney document
appoints someone to handle your financial
affairs for you. You should choose someone whom
you trust completely.
Why is
it not advisable to name my minor children as
beneficiaries on my life insurance?
Minor children cannot own or
manage assets. If a minor is named as a
beneficiary of life insurance, the life
insurance company often holds the assets until
the child reaches the age of 18 and then
distributes the proceeds to the beneficiary.
When this happens, the minor child is often
denied the benefits of the assets when the child
most needs the money. This is not what the
insured party wants to occur.
|
|
Tax and Business Succession
Planning
How are
buy-sell agreements funded?
Frequently life insurance is used
to fund the possible buy out of a partner
although if the parties are sufficiently
wealthy, life insurance may not be necessary.
Each situation is unique.
Do I need
to be concerned only about the death of a
partner?
No, you should be concerned about
disability and the possibility of retirement.
Each situation is unique.
|
|
Trust Creation and Implementation
What is trust implementation?
A trust is a legal document that
governs the investment, administration and
distribution of assets. The document can be
customized to fit a person’s situation and
wishes. A trustee is the person or institution
responsible for following the directions set
forth in the trust document.
What
are the advantages and disadvantages of having a
revocable trust?
Advantages:
 |
You retain control over your
assets. |
|
If you are not your own
trustee, you observe the trustee in action
handling your assets. |
|
You avoid probate and the
trust can be used to avoid an ancillary
probate of property in another state. |
|
You avoid the attendant
publicity of probate. |
|
You will probably save your
probate estate a substantial amount of fees
and court costs. |
|
You can provide for
uninterrupted management of your assets in
case of your incapacity. |
|
You can avoid interruption of
asset management when disability occurs or
at death. |
|
It’s a good way to pass
property to charity and save taxes at death. |
|
You can change your mind at
any time.
|
Disadvantages:
|
Initial cost and trouble of
set up or “funding” of the trust. Property
must be transferred to the trust. |
|
It slightly complicates
subsequent dealings with the property (but
only slightly). |
|
It may require payment of an
annual trustee’s fee if someone besides you
is the trustee. |
|
At the time of termination,
there may be fees to the trustee or for
property recordation and transfer. |
|
There are no immediate tax
advantages. Tax planning can be done in a
Will or in a trust. |
|
|
Life Insurance Trusts
Does
everyone need a life insurance trust?
No, these trusts are only
appropriate in certain situations and I can
quickly tell if your situation calls for the
implementation of this vehicle for controlling
or paying taxes after death.
Can I handle such a trust
on my own?
No, it is important that the
insured party NOT control any aspect of the life
insurance trust, other than retaining an
experienced estate planning attorney to navigate
the process.
|
|
Trust and Estate Administration
Can I have
an out of town person serve as personal
representative (executor) of my estate?
Yes, but it is important to
include specific language in your last will and
testament so that this person’s expenses will be
covered from the probate estate assets.
What are the key
characteristics I should consider in choosing a
trustee?
This depends upon the type of
trust involved and its purpose. The possible
players are a family member, a friend, your
accountant, your business partner or the trust
department of an institution like a bank.
What does a trustee do?
After death, the trustee of a
trust is responsible for “running the trust”,
making sure that assets are property invested
and/or distributed to the beneficiaries. The
trustee is also responsible for communicating
with beneficiaries about his or her needs.
|
|
Real Estate
Should married
couples always own their real property as joint
tenants with right of survivorship (called
“tenants by the entireties”)?
Joint titling of property is a
good way to avoid probate on jointly titled
assets. This is also an excellent method for
asset protection. But joint titling is not
necessarily appropriate in other situations and
can often work to complicate estate tax
avoidance.
Should an executor of a
probate estate sign the standard real estate
contract presented by a real estate agent?
No, it is advisable to have an
experienced attorney review such a document as
there are several important changes to the form.
|
|
Business Law
If I am a
sole proprietor, is there any reason for me to
create a business entity?
Absolutely! If you run your business in your own
name, you are exposing all your assets to
liability. If you run your business in the name
of an entity, you may be able to shelter those
assets from liability, depending upon the type
of business.
If a company wants to hire
me, do I need an attorney to review the proposed
employment agreement?
Absolutely! I cannot tell you how many
individuals have come to me after signing an
employment agreement, the terms of which the
person did not understand. Even if the company
says that it will not entertain any changes to
the document, you owe it to yourself to find out
exactly what that proposed agreement says.
|
Retirement
Planning
Do you do financial
planning?
No, but I know people who are
first rate performers in this field, who do not
sell any products. You can trust the advice
rendered because the person has no bias or
conflict of interest.
What is your role in
retirement planning?
I help my clients organize their materials and
obtain a complete understanding of what is out
there for them when they retire. Often this
brings them peace of mind and sometimes it
causes them to retain a financial planner to
better assist them in investing their assets
wisely. Understanding your retirement situation
is just part of the estate planning process.
|
|
Estate and Gift
Taxation
Is the level for estate tax
the same at the state and federal level?
It used to be so, but now it is not. As of
today, Maryland and the District of Columbia tax
any estate valued above $1 million. The federal
government imposes an estate tax on estates
valued above $2 million.
Is there gift tax in
Maryland or D.C.?
No, but there is gift tax at the federal level
for gifts in excess of $1 million. This does not
include the annual gift tax exclusion amount
which is currently $12,000 per year.
|
|
Elder Law
Does
Medicare pay for nursing home care?
Yes, in certain
circumstances, Medicare will pay for several
weeks of nursing home care. The rules governing
Medicare coverage are strictly construed,
however, and if the resident is not perceived as
“improving”, then Medicare can cut off any
coverage.
Can I be penniless and still not qualify for
Medicaid?
Unfortunately, with
the new Medicaid rules, individuals may be
without any financial resources whatsoever and
still not be eligible for Medicaid. Many elder
lawyers are working with the legislature to fix
this situation.
|
|
Guardianships
Does a
revocable trust serve to avoid the need for a
guardian?
Yes, at least with
respect to your financial affairs. If you are
elderly, it often makes sense to create a
revocable trust and have title to your assets in
your name as trustee of the trust. This assists
in the management of your assets if you become
too ill to handle the assets yourself. This also
avoids the need for a guardianship through the
court and avoids the necessity of your successor
trustee filing any reports with a court. The
cost and time savings are enormous.
Why
is a guardianship so expensive?
First, the person
seeking to be appointed guardian needs to hire
and pay an attorney. Second, the judicial
process requires that numerous individuals and
agencies are sent certified letters with copies
of the pleadings. Third, the court appoints an
attorney to represent the prospective ward, and
the fees to this attorney are paid from the
prospective ward’s assets. Next, the court
almost always orders a hearing at which both the
attorney for the guardian and the attorney for
the prospective ward must appear. Finally, the
guardian must file annual accountings each year
which may involve accountants and attorneys in
the reviewing of the documentation.
|
|
Wills
Does everyone need a will?
If you do not have a will, then the state
“creates” a will for you because of the laws of
intestacy. So, in my opinion, everyone who has
any assets that will be distributed through
probate should have a will.
|
|
Probate
Isn’t probate something I
should avoid?
Not necessarily. In Maryland and the District,
probate is relatively inexpensive and efficient.
Is there any disadvantage
to probate?
Yes, it is easier for a disgruntled party to
challenge the validity of a will than for such a
person to challenge a trust. Also, probate is a
public forum whereas trust administration is
more private.
|
Contested Wills
What is the time limit for
contesting a Will in Maryland and the District
of Columbia?
With some exceptions, a challenge to a will must
be filed within six months of the appointment of
a personal representative (the same as the
executor) in the probate matter.
Who is authorized to file
a challenge to a will?
Only “interested parties”, meaning individuals
or entities who are beneficiaries of the will
that was admitted to probate (and this includes
creditors who may file a claim against the
probate estate) or who would have inherited from
the decedent if the will that has been admitted
to probate is found to be invalid or
unenforceable. |
