Only “interested parties,” meaning individuals or entities 1) 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, 2) who would have inherited from the decedent if the will that has been admitted to probate is found to be invalid or unenforceable.
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.
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.
Not necessarily. In Maryland and the District of Columbia, probate is relatively inexpensive and efficient. And in Virginia, the matters are typically handled by the Personal Representative/Executor (and not the attorney) at least at the initial stages of probate.
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. See my discussions of Washington D.C. Intestate Succession Laws and Maryland Intestate Succession Laws, which address how assets are distributed in your jurisdiction if you don’t have a Will. It’s not the way you probably imagine it will be!
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 and that process, which is burdensome to say the least, may involve accountants and attorneys in the reviewing of the documentation. One must seek to avoid guardianship if at all possible!
Yes, at least with respect to your financial affairs and assets are owned by / have been transferred to the trust. 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. But it’s important that asset ownership be in the trust, a task that is relatively easy to accomplish.
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.
Yes, in certain circumstances, Medicare will pay for several weeks of nursing home / rehabilitative care after a patient is released from a hospital and needs additional “rehabilitative” 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. One must then assume the cost of the nursing home or rehabilitative care.
No, but there is gift tax at the federal level for gifts in excess of $11,200,000 per person (in 2018). This does not include the annual gift tax exclusion amount which is increased to $15,000 per year. Gifting during life is an EXCELLENT way to reduce the state estate tax exposure of your probate (or trust) estate. Few people today need worry about federal estate taxes in the District, Maryland or Virginia. The District’s estate tax exemption has also increased to match the federal exemption ($11,2000,000 per person for 2018).
It used to be so, but now it is not. As of 2017, Maryland taxes any estate valued in excess of $4 million and the District of Columbia taxes any estate valued above $11.2 million. The federal government imposes an estate tax on estates valued above $11,200,000 too.
I help my clients organize “what they own” in order to 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, but it’s a very important part.
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 since he or she does not sell products or manage assets.
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 your individually owned assets from liability, depending upon the type of business. There also may be some advantages under the new income tax law. The specifics are being worked out.
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. As former general counsel of a New York Stock Exchange company, I am very familiar with employment agreements and the provisions that you should insist upon in such an agreement.
No, absolutely not! It is important to have an experienced attorney review such a document as there are several important changes to the form that will insulate the personal representative / executor from possible liability. The personal representative / executor rarely knows all about the real estate and should not represent or “warrant” anything concerning the property about which that individual is not informed.
Joint titling of property is a good way to avoid probate on jointly titled assets (and also provides some asset protection). But joint titling is not necessarily appropriate in other situations and can often work to complicate estate tax avoidance. I often advise my clients of the options and the consequences.
After death (or if the person who created the trust becomes disabled during life), the trustee of a trust is responsible for “running the trust,” making sure that assets are property invested and/or distributed to the beneficiaries of the trust. The trustee is also responsible for communicating with beneficiaries about his or her needs. The District of Columbia, Maryland and Virginia have adopted the Uniform Trust Act (with differences in each jurisdiction) and this new law governs interpretation and administration of trusts.
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 or other type of financial institution.
Yes, but it is important to include specific language in your last will and testament so that this person’s travel and other incidental expenses will be covered from the probate estate assets.
No, it is important that the insured party NOT initiate nor control any aspect of the life insurance trust, other than retaining an experienced estate planning attorney to navigate the process.
Absolutely not! Estate tax planning can be incorporated into a last will and testament just as it can be incorporated into a revocable trust.
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. Maryland currently has a “statutory” power of attorney form. At a minimum, if you live in Maryland, you should download that form, fill it out and get it witnessed and notarized. It is very important.
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 at that point in time, when the child is often not responsible enough to handle the money. 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. Read more about designating minor children as life insurance beneficiaries.
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.
No, you also should be concerned about disability and the possibility of retirement. Each situation is unique.
No, in fact, these trusts are only appropriate only in certain rare situations and I can quickly tell if your situation calls for the implementation of this vehicle for controlling or paying taxes after death. With the increased estate tax exemption, these trusts will go out of favor (except for the .0001%!).
A trust is a legal document that governs the investment, administration and distribution of assets that are titled in the name of, and thus “owned” by, the trust. 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.