Frequently Asked Questions
- What exactly is “Estate Planning?”
The first thing to note is that Estate Planning is a term that applies to everyone – not just those with a lot of money or property. If you have a home, a bank account, an insurance policy or a retirement account, you need an Estate Plan, regardless of the value of those assets.
Estate Planning is simply the process whereby a person takes the necessary steps to make sure that if they are incapacitated, someone they trust will have the ability to manage their property for them and take care of them and their family and, if they should die, their property will pass to those people they want, the way they want, in the most efficient and economical fashion.
Essentially, estate planning requires that you execute certain legal documents that will express your particular desires. However, estate planning is more than just preparing a will and other legal documents. In many instances, property will pass “outside” of the will – by joint ownership or beneficiary designation. Thus, in order for an estate plan to work the way it is intended, it also requires that you take steps to make sure your assets are titled the proper way, and that the beneficiary designations on your life insurance policies and retirement benefits (IRAs, 401(k)s, etc.) are properly written and filed, and that they are coordinated with your estate planning documents.
- What are the documents that are usually part of a complete estate plan?
A comprehensive estate plan consists of various documents that address all aspects of disability or death. The centerpiece of the plan will be either a Will or a Living Trust. Usually, our first job is to educate the client as to the choice of a Will-centered Plan or a Living Trust Plan.
If you decide that a Living Trust Plan is right for you, we will design and prepare a Living Trust Agreement specifically tailored to your needs and objectives, along with several other documents, including a companion “Pour-Over” Will into the Trust, a Certification of Trust, General Durable Financial Power of Attorney, Maryland Statutory Power of Attorney, Health Care Power of Attorney, Living Will/Advanced Directive and a HIPAA Authorization.
For those of our clients who don’t need or want a Living Trust, the plan documents will include a Last Will and Testament, Maryland Statutory Power of Attorney, Health Care Power of Attorney, Living Will/Advanced Directive and a HIPAA Authorization.
After the essential legal documents are executed, we will assist or advise you with any necessary re-titling of assets and make sure the beneficiary designations for life insurance policies and retirement accounts are coordinated with your planning.
- How do I get started towards doing my estate planning?
We believe that Estate Planning Matters – that it is important enough to do right. There are many aspects of the law that are critically important and many pitfalls that can be avoided with the proper knowledge. Thus, there can be no doubt that sound advice from an experienced lawyer is essential if you want to be sure you and your loved ones are protected.
That is why your first step in the process should be to find an experienced attorney who you can trust and rely on to provide you with the proper counseling you need to prepare your estate plan. For this reason, we are willing to offer to spend an hour with you so that you can get to know us, our philosophy and our process and decide if you want to work with us in designing and implementing your estate plan.
More information about us can be found at About Us.
- How much does it cost to create an estate plan?
Since there is no “one size fits all” estate plan, the expense of creating an estate plan varies. We set our fees in accordance with the Maryland Rules of Professional Conduct, which provide that fees must be reasonable, and based on factors such as “the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly” as well as “the experience, reputation, and ability of the lawyer or lawyers performing the services.” Since we won’t know what will be required to achieve your objectives until we spend some time with you, we are unable to quote fees over the phone. That is the purpose of the Complimentary Consultation – to find out what you need and then tell you what the cost would be to accomplish the desired result.
- Can you provide me with a “simple will”?
Here are a few reasons why we don’t do “simple” wills:
- People are like snowflakes – no two are alike. Many people who contact us seem to think that they only “need” a simple will, as if preparing a will consists only of filling in a one-size-fits-all form. We treat our clients as unique individuals whose families and loved ones also have their unique qualities. Our experience teaches us that by spending only a few minutes with our clients, they quickly see that their family and circumstances and their goals and objectives are not such that can be “pigeon-holed” into a form. Each will or trust we design is specifically tailored to meet the client’s objectives. Certainly, some wills and trusts are less complex than others. We always attempt to make the documents as straightforward and understandable as possible. But there are many potential inheritance pitfalls that can be avoided, and many valuable protections that can be provided by proper planning. And we believe that our clients deserve to be educated about the benefits that a more comprehensive approach can bring.
- Unfortunately, the tax and other laws are not simple, so estate planning documents can’t be either. Like it or not, because the government sees death as an opportunity to collect taxes, there are state and federal estate and inheritance tax laws. By strategically navigating those laws, considerable opportunities exist for minimizing or avoiding such levies. Sometimes, so-called “simple” solutions create enormous negative tax consequences. In our view, neglecting to consider the impact of taxes on the transfer of an estate to your loved ones is irresponsible.
- Simply leaving property outright to your heirs is (usually) not good planning. By definition, a so-called “simple will” is one that just leaves the person’s property outright to named beneficiaries. An alternative to an outright bequest is a bequest to a trust. A trust can be designed to provide the beneficiary with almost total control over the trust property, assuming the beneficiary is a responsible adult. Some of the benefits of a bequest being in a trust are: (1) protection of the beneficiary in the event of a divorce, lawsuit, or bankruptcy; (2) ensuring that the inheritance passes to the beneficiary’s children at the beneficiary’s death, rather than to a spouse or creditor; and (3) protecting the inheritance from the imposition of estate taxes. These advantages cannot be accomplished by a so-called “simple will.”
- Estate Planning Matters! That is, it is important. And we believe it warrants spending some time and attention on it. Like everyone else, we wish our laws were simple, but the fact is that they are not. Life throws lots of things at us, and it pays to be prepared for as many of the bad things as possible. So we prefer thoroughness over simplicity. We don’t attempt to be the cheapest – we want to be the best.
- What is the difference between a will and a living trust?
A will is essentially a set of written instructions to the Probate Court as to who you want to receive your estate. Thus, a will does not avoid probate – it guarantees it. Probate involves court-supervised procedures, including an inventory and appraisals of all real and personal property and required accountings filed with the Court.
A living trust (sometimes also called a revocable trust) is a vehicle for transferring your estate at death to your intended beneficiaries directly and avoiding the probate process. Avoiding probate also requires that the living trust be “funded” during your lifetime – that is, your assets are not held in your own name, but by you as Trustee of your trust. As Trustee, you retain total control over the trust assets during your lifetime, as well as the power to amend or even revoke the trust at any time.
In addition to the advantages of avoiding the expense and delay often associated with probate, a living trust also is the best vehicle for providing for the management of your property in the event you become incapacitated. The trust will have a provision naming a person of your choosing as successor trustee to manage the trust for you if you cannot continue as Trustee because of incapacity. This is similar to naming a power of attorney, but works more efficiently.
- I have had a recent death in the family. Can you help to handle the matters related to their estate?
Yes – if the decedent resided in Maryland at the time of their death. Our office handles all matters related to the administration of an estate. We work with you on probate matters – which are conducted through the Register of Wills – and which involve all assets titled in the decedent’s name alone. If the decedent had a Living Trust, we can help with the administration of the trust and trustee duties. We can also advise you on matters related to joint accounts and beneficiary designated accounts.