Estate Planning

Estate Planning

Do you have an Estate Plan? Have you reviewed it recently to make sure it is up to date and does what you hope it will do as far as tax planning and business succession? Does your plan do all it can to take care of your loved ones, preserve your legacy, and protect the inheritance that you hope to leave?

We offer a wide variety of services to help you secure your future and take care of those you care about most.

The following are a few of the more common tools that we can use to assist you in this endeavor.

Wills

The basic foundational document of any estate plan is the Last Will & Testament. The purpose of this document is to codify your intentions and desires for after you are gone. It will help ensure your loved ones are taken care of when you are no longer there to take care of them yourself. The Last Will & Testament guides the court and the Personal Representative (also known as an Executor in other jurisdictions) in doing what you would want done when you are no longer there to tell them. This document allows you to allocate specific gifts or bequeathals and give instructions about who you want to take care of things. It also allows you to direct that certain fees and costs be waived, paid, or accepted on behalf of your estate.

Advanced Directive and Medical Power of Attorney

If you are incapacitated, an Advanced Directive and Medical Power of Attorney give guidance and instruction to your Health Care Power of Attorney or Agent, as well as medical professionals, regarding how you want to be cared for in the event you are not able to make your own health care decisions. The Medical Power of Attorney provides the legal authority for your health care agent, someone you trust and appoint, to act and make healthcare decisions on your behalf based on your Advanced Directive document, your previously communicated desires, and what they think you would want or what they feel is in your best interest. The Health Care Power of Attorney document also allows your agent access to your medical records and allows the doctors and other hospital staff to discuss and share information with your agent that might otherwise be blocked by HIPAA and other privacy laws.

Durable Power of Attorney

A Durable Power of Attorney document is for matters other than health care. This document grants your agent⧿again, someone you trust to act for you in your absence and whom you have appointed⧿to make decisions and act for you if you are unavailable to do so or otherwise indisposed. For instance, if you are in the hospital and unable to pay your bills, this document allows your agent to make those payments on your behalf.

Trusts (Living/Irrevocable)

A little more upfront can go a long way.

A Trust is not just for the rich. At its most basic, a Trust is simply property that you put in the care of one person that is for the use or benefit of another person (although these people can, in fact, all be the same person). There are a few reasons to consider a Trust or Trusts for even a more modest estate: Trusts allow estates and individuals to avoid much of the probate process, keep things private, reduce taxes, and take care of a loved one with special needs, just to name a few benefits. Here is a more in-depth look at the value that a Trust can offer:

• Avoiding Probate. Probate can be long and expensive. If you can plan around it, you may be able to avoid it completely or have most of the assets you own transferred by operation of law⧿that is, go directly to the beneficiaries without the courts getting involved at all. Probate can take a minimum of six months and may drag on for years. During this time, there are strict limits on what your assets and money can be used for, and the distribution to your heirs only happens once all other debts have been paid or funds have been set aside to pay them.
• Reduce or avoid state and federal estate taxes. Although not a concern for most people, estate taxes can be onerous. While the current exemptions are set at over $11 million per person at the federal level and over $5 million at the state level here in Maryland, if your estate does exceed these amounts, then your death-tax bill will likely be extravagant (we are talking hundreds of thousands of dollars). However, these exemptions can and will change, so an amount that is not currently taxable may become so in the future. Certain types of Trusts can be used to pass your estate more efficiently to your heirs and reduce your eventual tax burden.
• Keep your estate private. Whereas Wills are made public during the probate process, Trusts are private. Trusts are an excellent tool for people who don’t want the whole world to know what assets and property they died with and who they gave it to.
• Preserve and Safeguard Assets. A Trust or Trusts can be used to make arrangements to manage your estate and keep it safe for and from your heirs until they are fully ready to take on the responsibility of ownership. This can include keeping assets safe from a child that may struggle with addiction or simply lacks common sense, or preventing the family legacy from being lost in a divorce.
• Make arrangements for children, grandchildren, or other minor heirs. A Trust can be an excellent tool for providing and continuing to provide for a minor heir or beneficiary. You can preclude the costs and inconvenience of a court (and the attending attorneys) having to step in to devise how assets will be administered and cared for for the benefit of the minor.
• Ease the management and transition of property if you are ever disabled. A Trust can be useful in the control of your property and its use for your care in the event that you are ever disabled. The named successor trustee will be able to quickly and efficiently take control of the property in trust and use that for your care and upkeep. This provides a touch more control than simply relying on a Power of Attorney (PoA) in the event of your disability or incapacity, not to mention the cost and inconvenience if you had neither a Trust of a PoA.
• Lastly, minimize the burden on and stress for your loved ones. As noted, the Trust assets do not need to go through the probate process and are readily available for the use of your loved ones in the event of your death. Many people do not consider that if they were to pass today, many of the assets that they own and use for day to day affairs, such as bank accounts or retirement accounts, may no longer be available or accessible to pay bills and purchase groceries, let alone pay for burial costs. With a properly structured Trust, as soon as the successor Trustee takes over, they can immediately make necessary distributions for the benefit (the care and upkeep) of the beneficiaries/heirs and pay for end of life costs without prior approval from a judge. Court approval for distributions for even these basic necessities can take weeks and are limited by statute.

And remember: with revocable Trusts you will still be able to change or revoke the Trust as life events occur.

Transfers by Operation of Law

Depending on your situation, there are many things that are not part of your estate when you pass, or, at least, should not be part of the estate. This includes things like life insurance, bank accounts, and stocks and bonds. All of these items and quite a few others have, or should have, named beneficiaries who will receive the property or payment from the item in the event that you pass away. If you fail to name a beneficiary, then the default is for your estate to become the beneficiary. This can result in additional costs for estate administration and taxes, as well as delays in the availability of funds for your loved ones. We here at Condliffe Law are happy to review your assets with you to either handle them through one of the previously discussed estate planning vehicles or assist in allocating transfer-on-death through beneficiary notices.