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Tag: Revocable Living Trust Maryland

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Harper Lee’s Will Unveiled

Harper Lee valued her privacy while she was alive. Her will suggests that she also values it in death. MP900398819[1]

After writing To Kill a Mockingbird, Harper Lee mostly kept out of the public eye. She did not release another book for decades and made very few appearances.

She died in 2016. Journalists and literary historians have been attempting to piece together details of the author's life, but they have met with little success. She was a private person and those who knew her have not been willing to talk very much.

Lee’s will has been unsealed but it does not reveal very much either, as Al.com reports in "Harper Lee's will is unsealed but questions about the legend of American literature remain."

Lee's will directs that all of her assets, including literary property, be put into a previously created trust. Details about the trust are not publicly known. There does not appear to be a way to make them public. The trust's beneficiaries and trustee are not known.

What Lee created is known as a pour-over will. It is a simple way to have assets transferred to a trust, after someone passes away. Since trusts do not have to go through probate and are private, this is a great method to use for people who do not want the details of their estates known to the public, as Lee apparently did not.

Reference: Al.com (Feb. 27, 2018) "Harper Lee's will is unsealed but questions about the legend of American literature remain."

Suggested Key Words: Wills, Trusts

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Treating Children Equally When One Is Not Responsible

MP900390083 (1)Most parents want to treat all their children the same in their estate plans. That can be difficult, when one of the children is not very responsible with financial matters.

Every parent with multiple children knows that despite being raised the same, they all turn out differently. They have different abilities and often very different attitudes about things.

Children also have different levels of financial responsibility.  Nevertheless, most parents do want to leave all their children an equal inheritance and they do not want to offend one of them by treating them differently than the others. This was the dilemma of a woman who recently wrote into Market Watch for advice in "My son is responsible, my daughter is in debt — how do I split my estate?"

A common way to do this is to create an estate plan that limits how the trust assets can be used. Provisions can be written into the trust, so an irresponsible child cannot waste any money received on frivolous things. This is unlikely to offend any responsible children, if they use the money in reasonable ways.

Not all families are the same. The best way to get an estate plan that covers your unique family situation, is to visit with an estate planning attorney. Let the attorney develop the best way to distribute your estate, given the needs of your family.

Reference: Market Watch (Feb. 16, 2018) "My son is responsible, my daughter is in debt — how do I split my estate?"

 

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Revoking a Trust

Irish-handsPeople commonly wonder if they can revoke a trust that they no longer like and if they can have more than one trust. The answer is not a simple yes or no.

A reader recently asked a NWI Times column “Can an individual establish more than one trust?” It seems that the reader was curious whether he could have more than one trust and if creating a second trust would automatically revoke the first one.

These are common questions because most people are more familiar with the law of wills than of trusts. A person cannot have more than one will and creating a new will is an automatic revocation of any previous wills. Trusts do not work like that.

It is possible for a person to have more than one trust. It is not uncommon when people want to accomplish different things with different trusts. However, the assets put into the trusts cannot be the same and most people have no reason to have more than one trust. What most people seek to accomplish with a trust, can best be done with only one.

Whether and how a trust can be revoked, depends on what type of trust it is. Some trusts are created to be revocable at any time, but an attorney should create the trust.

Other trusts are created to be irrevocable. Sometimes they can be revoked but there are often tax penalties for doing so. It is usually advisable to amend an irrevocable trust where and how state law allows.

If you have questions about a trust you have created, it would be best to consider meeting with an estate planning attorney.  Profit Law Firm has estate planning attorneys with meeting locations in Chevy Chase, Greenbelt, and the District of Columbia.

Reference: NWI Times (Feb. 18, 2018) “Can an individual establish more than one trust?”

 

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Trusts – What Different Types of Trusts Exist?

Business_meeting[1]Learning about trusts can sometimes be difficult as there are several different types of trusts that you can get that are designed to do different things.

When attorneys talk about trusts they often end up confusing laypersons with all of the legal jargon. There are many different types of trusts out there and each type has its own terminology. This legalese can be difficult for the uninitiated to understand.

This is a problem for people who would like to set up a trust. They need to know what it is their attorneys are talking about so they can choose the right type of trust.

Recently, the Motley Fool discussed some common trust types in "Navigating the World of Trust Funds: Your Quick Guide," including:

  • Revocable Living Trusts – These are trusts the settlor (the person who creates the trust) can easily dissolve. If circumstances change, assets in the trust can be removed and a different trust can be created. These trusts avoid probate.  They do not reduce taxes.
  • Irrevocable Trusts – These trusts cannot be revoked. They often have estate tax benefits, while revocable trusts don't.
  • Credit Shelter Trusts – While not as useful as they used to be, these trusts still offer a good way to avoid some estate taxes. They are particularly useful in Maryland and DC, which currently have state estate taxes for estates greater than $2million and $1 million. Assets in the trust are held for the benefit of children normally, but a spouse can still use those assets while he or she is alive. The assets are not counted as part of the spouse's estate for tax purposes.
  • Generation-skipping Trusts – These trusts are created for the benefit of grandchildren instead of children. This is normally done for estate tax purposes, but the trusts need to be set up by experts to avoid other tax issues.
  • Qualified Personal Residence Trusts – These very specific trusts are a way to pass a home on to heirs while minimizing estate and gift taxes on the home.

When it comes to deciding which trust “flavor,” if any, is appropriate for you, be sure to contact a qualified estate planning attorney.

Reference: Motley Fool (Sept. 18, 2016) "Navigating the World of Trust Funds: Your Quick Guide."

Suggested Key Words: Estate Planning, Trusts

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Do You Need a Revocable Living Trust in Maryland?

Bigstock-Financial-consultant-presents--14508974[1]Contrary to popular belief estate planning is not one-size fits all and not everyone needs a revocable living trust. However, they are a good option for many people.

When you start asking around for estate planning advice, you will probably find the first thing many non-experts say about it is that you need to get a revocable living trust. They are extremely popular instruments and articles abound on the Internet extolling their virtues. They are so popular that a common belief is that everyone should get one.

That noted, they do have drawbacks and these drawbacks might make some people decide to go another route. Contrary to popular belief, revocable living trusts do not offer tax protection.  Different trust and estate planning tools can be used to reduce tax liability.  Another drawback, is that revocable living trust give take assets out of probate, and sometimes you lose valuable benefits found in probate.  For example, in Maryland, creditos can only come after assets in the estate for six months after death, versus the usual three year period.  Placing assets in revocable trusts take them out of probate and give them longer exposure to unwarranted creditor claims.

Specifically, the Motley Fool looked at the benefits and drawbacks of revocable living trusts in "Is a Revocable Living Trust Right for You?"

The biggest benefit of a revocable living trust is that your primary assets, as long as they are transferred into the trust, do not have to go through probate when you pass away. As probate can be an expensive and time-consuming experience, this can make handling your estate much easier for your heirs.  In Maryland, probate is relatively inexpensive and less lenghty, so some people may find it to their benefit to be in probate.  Probate is also normally a public process, but if you have a trust you can keep your estate details private. Probate is public in Maryland and DC.  Finally, should you become incapacitated a successor trustee can take over your finances instead of having to go through court to get a guardian.

On the other hand, trusts can be more expensive to set up than other estate planning instruments, but they might save your estate money in the long run depending on probate costs. Transferring assets into your trust can also be very time-consuming depending on what you own. Having a revocable living trust also does not mean you do not need a will. You will still need a simple will to deal with anything left out of the trust.  If you want a consultation on whether  revocable living trust is right for you, contact the Profit Law Firm.

Reference: Motley Fool (Sept. 10, 2016) "Is a Revocable Living Trust Right for You?"