December 8, 2016

It Is Time to Review Your Estate Plan

You should review your estate plan anytime something significant changes that could have an impact on your plans. That means that you should be reviewing it now.

Some things do get better with age. However, unlike fine wine and good cheese, estate plans do not improve after aging.

An estate plan can be viewed as a snapshot of a person's financial and life situation at the moment the plan is made. When something changes in a person's financial or life situation the snapshot is no longer an accurate representation. If the change was significant enough, then the estate plan itself could be ineffective.

For this reason, estate planning attorneys suggest that their clients review their estate plans every few years to make sure the plans are still good. Another reason to review estate plans is when there have been legal changes that could affect the plans. There have been recent changes in Maryland law and D.C. law in the past two years that mean residents of those states should review their plans. Maryland has enacted the Maryland Trust Act and D.C. has changed laws regarding wills and trusts as well.

Recent Treasury Department regulatory changes make it likely that your plan needs review as Wealth Management points out in "Remind Clients Importance of Updating Estate Plans."

Take some time to review your estate plan and consult with Profit Law Firm about whether you need to update your estate plan.

Make sure that it still does everything that you want it to do. Ask yourself if there have been any changes to your life and finances that are not reflected in your plan. Then, call your estate planning attorney and ask about any legal changes that have been enacted since you made your estate plan.

Once you are done with that and have an idea what needs to be changed in your estate plan, go to and have the changes made by your attorney.

Reference: Wealth Management (Nov. 21, 2016) "Remind Clients Importance of Updating Estate Plans."

December 2, 2016October 25, 2023

Why People Put off Estate Planning

Roughly half of Americans will pass away without estate plans even if they know they should have one. Why do people not make plans they know they should make?

You have heard time and time again that if you do not have an estate plan, then you do not get to decide what happens to your property after you pass away. Who gets what will be determined by state laws. You also do not get a say in who should look after your minor children. That will be determined at the sole discretion of a court.

Most people are aware of these facts and know that they should do some formal estate planning because of them.

However, only about half of Americans ever bother to do that estate planning. Too many people pass away having constantly thought they could always wait to plan their estates. They ended up waiting until it was too late.

The Sabetha Herald recently discussed why people put estate planning off in “Procrastination Factor — Why we avoid any estate planning.”

The biggest reason is that many people would prefer not to think about their own deaths. To begin the estate planning process you need to contemplate a time when you will no longer be alive and that is an uncomfortable thing to think about. Another big reason is that family members often discourage people from estate planning. They would rather not think about a time when their loved ones will no longer be around.

The problem is that death is unavoidable.

You should not let uncomfortable thoughts stop you from taking the necessary steps to prepare. In fact, if you visit an experienced estate planning attorney, you will probably find that planning for your estate is not nearly as uncomfortable as you imagine it to be. We listen to our clients, and work with them to develop a plan that protects their three biggest treasures, their family, their business and their assets, as harmoniously as possible.

Reference: Sabetha Herald (Nov. 14, 2016) “Procrastination Factor — Why we avoid any estate planning.”

December 1, 2016February 27, 2023

Being Prepared for Death

You are going to die, so it is important to be prepared for it. However, do not be taken in by some common estate planning myths.

At some point in the future, you will pass away. That is an undeniable fact.

You might think that if you live long enough medical science will advance to the point people can live forever. The truth is, however, that current medical science is nowhere close to making that happen and it will not be for a long time, if ever.

So, now that you know the facts, it is important to make sure you are prepared and have an estate plan.

It is also important that you not be taken in by a couple of common estate planning myths as WSBT 22 discusses in “Special Report: Are you properly prepared for death?”

The first myth is that if you do not have an estate plan, then your family is doomed. All of your property will go to the government and your children will end up in foster care.

That simply is not the case.

Your property will go to your closest living relatives and the court will make sure your children receive proper care, which normally means they will live with a suitable relative. However, if you do not have an estate plan, then it is the government and not you who decides what happens to your property and children.

The second big myth is that you can get an effective estate plan by downloading a form from the Internet. Most of the time any money saved by downloading a form is lost due to problems that the form will later cost your estate. Our site provides some information on estate planning fundamentals.

There are no substitutes for an experienced estate planning attorney.

Reference: WSBT 22 (Nov. 14, 2016) “Special Report: Are you properly prepared for death?”

November 30, 2016May 29, 2023

Overlooked Estate Planning Concerns

When people are planning for their estates there are a few often important items that they tend to overlook.

Planning for an estate can be complicated. You need to take stock of all of your assets, figure out what should be done with them, and talk to an estate planning attorney to discuss the best way to make sure those assets are distributed as you desire. When doing that, do not overlook other estate planning issues you might want to address. Otherwise your estate plan may be less effective and comprehensive as it could be. Check out our website for estate planning fundamentals.

If the attorney does not know about certain issues important to you, then the attorney cannot help you plan for them.

Recently, the Lake County News listed some commonly overlooked issues in “Estate Planning: Important but sometimes unaddressed estate planning issues,” including:

It is important to decide what should happen with any digital assets you have. State laws differ about how digital accounts should be handled and who can have access to them. Make sure your attorney knows what digital accounts you have.
If you want to make sure your pets are taken care of after you pass away, then you need to let your estate planning attorney know that.
If you have any dependent adult children still living at home, then you might need to make special plans for them if they are not able to care for themselves.
You need to make sure that any life insurance policies and retirement accounts have alternate beneficiaries listed in case the first beneficiary predeceases you.

Schedule a consultation with Profit Law Firm to create an estate plan that covers the basics.

Reference: Lake County News (Nov. 12, 2016) “Estate Planning: Important but sometimes unaddressed estate planning issues.”

November 25, 2016February 27, 2023

What You Should Have in Your Estate Plan

There are a few things that every single estate plan needs to have regardless of the exact legal instruments that you end up using as your primary estate planning tools.

Estate plans can take a variety of shapes. Some estate plans are small and simple. Other estate plans are large and contain many complex legal instruments. However, there are a few things every single estate plan needs to have.

Recently, the Catholic Register discussed what is necessary for all Canadian estate plans in “The must-haves of estate planning.” In the U.S. most of the same things are also necessary. They include:

Someone needs to be appointed as the executor of your will. Even if the primary instrument to distribute your property is a trust, your plan should still include a pour-over will for which you need to appoint someone trustworthy as an executor.
Your estate plan needs to include some basic tax planning, especially if you live in a state that has an estate tax of its own. Both Maryland and the District of Columbia do, so you need some basic tax planning in both these states.
If you have any dependents, then your estate plan needs to provide for their care. While you have some flexibility in your estate, you cannot simply disinherit a spouse or a minor child. Maryland and the District of Columbia, like other states, allow disinherited spouses to claim an elective share of the estate, regardless of an intent to disinherit.
Your estate plan should also include powers of attorney so you can appoint someone to look after your interests if you become incapacitated.

If you have an experienced estate planning attorney create your estate plan, then it will contain all of these things and much more that will make your estate plan as effective as it can possibly be. Schedule a consultation with Profit Law Firm to get the peace of mind that comes with proper estate planning.

Reference: Catholic Register (Nov. 6, 2016) “The must-haves of estate planning.”

November 23, 2016August 27, 2023

A Bypass Trust Might Still Be Your Best Option

Relatively recent changes to federal estate tax law have made bypass trusts less popular than they used to be. However, they are still good in many circumstances.

It used to be a complicated process for a married couple to get the most out of the estate tax exemption. When one spouse passed away his or her estate tax exemption could be useless if all of the assets went to the other spouse directly. When the second spouse passed away all of the couple’s assets would be considered part of his or her estate and the individual estate tax exemption would be applied.

To get around this couples had to get a “bypass” trust of which there were many types. Essentially, the surviving spouse was bypassed in the estate plan.

The relatively new federal law of spousal “portability” changed this and made bypass trusts less necessary. Now, if the paperwork is properly filled out, a surviving spouse can elect to carry over the deceased spouse’s estate tax exemption and use it along with his or her own later.

This move essentially doubles the estate tax exemption.

However, there are some situations where a bypass trust is still a good idea as discussed by the Poughkeepsie Journal in “Bypass trust works better for many families.”

Many states have estate taxes of their own and they do not all allow spousal portability. For instance, Maryland has a state estate tax and the District of Columbia has a state estate tax. Thus, in Maryland and the District of Columbia a bypass trust is still necessary to take full advantage of estate tax exemptions. A bypass trust can also be used to protect against a surviving spouse getting remarried and having all of the couple’s property eventually ending up in the new spouse’s family. As a result, bypass trusts are a useful estate tool for blended families, learn more here. They can also be used as a great way to include other family members in the estate plan, especially grandchildren.

If all this sounds a bit confusing, do not worry. That is why there are estate planning attorneys and firms like us.

Tell the attorney what you want done with your possessions after you pass away and let the attorney worry about the best way to accomplish that while minimizing the estate tax burden on your estate.

Reference: Poughkeepsie Journal (Nov. 4, 2016) “Bypass trust works better for many families.”

November 21, 2016April 27, 2024

Two Basic Types of Estate Planning Documents

Estate planning can sometimes seem like it requires a long, complicated list of different documents. It can be helpful to break those documents down into two basic categories.

Once you start planning for your estate you can quickly get bogged down trying to figure out what all of the different estate planning documents are. There are all sorts of different legal documents that are not familiar to most non-attorneys. This often confuses people enough that they give up and delay getting an estate plan.

However, it does not have to be that complicated.

A good way to think about the different documents is to put them into two basic categories, as the Motley Fool discusses in “The Estate-Planning Documents Everyone Needs.”

The first type of estate planning document determines what happens to your belongings after you pass away. This category includes wills, most trusts and even things like a retirement account that has a beneficiary designation.

The second type of estate planning document determines who takes care of your affairs if you are not able to do so. This category includes powers of attorney and advanced health care directives.

Who do you want to have your possessions after you pass away and who would you like to take care of your affairs if you cannot? Answer these questions, and then go to an experienced estate planning attorney. Schedule a consultation with Profit Law Firm, LLC. Tell the attorney your answers, and let the attorney figure out the documents you need to give your answers legal effect.

Reference: Motley Fool (Nov. 7, 2016) “The Estate-Planning Documents Everyone Needs.”

November 15, 2016February 15, 2024

Convincing Parents to Create Estate Plan

Many children with aging parents know that their parents should do estate planning, but convincing their parents of that can be difficult.

Many elderly people in the U.S. believe estate planning is something only the very wealthy need. If they only have a few major assets and modest back accounts, then they believe estate planning is unnecessary for them.

Many of their adult children know better, however.

The children know estate planning is an important responsibility for everyone regardless of wealth. While those children would like to talk their parents into estate planning they may find it difficult. In the Washington Metropolitan area, estate planning is very important. Maryland estate planning is critical because Maryland has both a state estate tax and a state inheritance tax. The District of Columbia also has a state estate tax.

This topic was addressed by NJ 101.5 in “Talking to your parents about a will.”

If you find yourself having this problem with your aging parents, there are some steps you can take.

First, explain to your parents that without an estate plan their estates will have to go through probate and everything will be distributed according to state law and not your parents’ wishes. That means if they would like to leave something directly to their grandchildren, they will not be able to do so in most cases. It also means that they might be subject to Maryland or D.C estate planning axes.

You can also talk to your parents about how costly and time-consuming probate can be and how it could be a burden on the family.

If all else fails and you can afford it, you might offer to pay for your parents to visit an estate planning attorney. They do not have to commit to anything before seeing the attorney, but the attorney can discuss the benefits of estate planning with your parents and give them some options. At Profit Law Firm, we also conduct two generation family planning sessions. Contact us for a consultation with Maryland estate planning attorneys and DC estate planning attorneys.

Reference: NJ 101.5 (Nov. 1, 2016) “Talking to your parents about a will.”

October 31, 2016

To Leave an Inheritance or Not

Many people struggle with the question whether it is better to leave their children an inheritance or not. It is not an easy question to answer.

Recently, FOX Business reported on a survey that found some 23% of retired Americans would prefer to spend all of their money and not leave their children an inheritance in "Should You Leave Your Kids an Inheritance?"

They asked Dave Ramsey for his opinion on the subject. Ramsey suggested that if you have bad kids, then, leaving an inheritance for them just rewards their misbehavior. He went on to say that if you have good kids, then not leaving them an inheritance teaches them money is evil. However, that is not the entire story.

It is understandable why a parent would not want to leave an inheritance to a child who has an unhealthy lifestyle. No parent wants to give a child money that would just fuel a drug habit, for example.

With good estate planning, however, a parent can actually leave an inheritance that encourages the misbehaving child to straighten up and does not give the child funds for bad behavior.

Another possibility is to skip the child with bad habits or behaviors and instead give the inheritance to grandchildren or other relatives.

There are several options for estate planning around a misbehaving adult child.

Visit an estate planning attorney to learn more about them and how you can use them.

Reference: FOX Business (Oct. 12, 2016) "Should You Leave Your Kids an Inheritance?"

October 21, 2016

Estate Planning Awareness Week

If you are one of the millions of Americans who do not have an estate plan, then the upcoming National Estate Planning Awareness Week is a great time for you to get one.

More than half of American adults do not have a current estate plan. The benefits of having a plan should be obvious.

With an estate plan you can say who gets your property after you pass away. An estate plan is the best way to make sure your family is taken care of after you pass away. An estate plan can help ensure your family is not unnecessarily burdened by estate taxes. And, an estate plan can make sure your end of life care is as you want it.

The Wills, Trusts & Estates Prof Blog reports that National Estate Planning Awareness Week is upon us. The article is appropriately titled "National Estate Planning Awareness Week: October 17-23."

If you are one of the people who does not have an estate plan, then why not get one during estate planning awareness week?

An even better idea would be not to wait for a special week.

Call an estate planning attorney in your area today and schedule an appointment. Getting an estate plan is not a difficult task for most people. You just need to tell the attorney what you want, listen to the options your attorney provides to accomplish your goals and let the attorney do the work of drafting the plan.

There is no reason to wait.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 3, 2016) "National Estate Planning Awareness Week: October 17-23."

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Category: Maryland Estate Planning