Family Legacy™ Frequently Asked Questions

The average person can’t be expected to know the ins and outs of the law, so it is important for people who want to plan their estate to learn a bit about how systems work.  This provides a basis of knowledge to make good decisions for themselves.  This helps one form a vision for what the result of their plan should be.  This vision drives what strategies to use.  The creation process is (1.) to learn about planning, teach the law firm about what you own and how you own it, (2.) hone your vision about what result you are trying to achieve through estate planning, (3.) design your plan; (4.) review your plan; then (5.) implement the plan. 

 It is important to properly maintain your estate plan in light of changes in your personal or financial situation as well as when the law changes.  Regular reviews and updates assure your plan’s success. 

The time it takes to create your estate plan depends on how well you are prepared.  Taking the time to properly consider issues related to your potential disability or death is key to creating your personal estate plan.  On average you should expect the process to take a few weeks as you consider different issues over that time.  In our law firm, we prefer to schedule out all meetings so that the estate plan so that our clients know, in advance, when they can expect the plan to be delivered for their review and signing. 

In general, the average estate plan only gets updated if the client initiates the update. 

In our law firm, most of our clients prefer to be prompted to review and update their estate plan, so they receive regular contact from our firm.  The cycle varies, but the purpose is to make sure that our clients have a recently updated estate plan at any time they develop a disability or should they die.

Your estate plan will provide a set of instructions to guide your personal representative or trustee to wind down your affairs and to pass your assets to your chosen beneficiaries in the manner you selected.  The plan doesn’t go away unless you instruct that it does so.  You may choose to extend the life of your plan to  

Estate planning is keeping control of your property while you are alive and well; planning for you and your loved ones in the event of your disability; giving what you have, to whom you want, when you want, the way you want; all while passing your wisdom along with the rest of your weath. 

You don’t need to plan.  The state has an estate plan for you if you fail to create your own.  That said, you may want to plan.  If you want to be in control of your plan, then you need to create an estate plan to memorialize your wishes. 

People employ the Will strategy when they want to accomplish goals that require a will to achieve.  The operative word is “need.”  If you don’t like the default state law regarding the handling of your estate and you want to have more control then you might need a will to accomplish that goal. 

When someone dies without having made a will, what happens depends on how they owned their assets.  You use a will to direct how you want the asset you own in your own name, individually, to transfer after your death.  You also get to name the person or persons who will be in charge of your affairs after your death.  Without a will, state law will dictate who is entitled to your assets and who is in charge. 

Anyone can do anything themselves.  That doesn’t mean that they will do it effectively.  There are certain legal requirements for a valid will that are not obvious to the average person.  Attorneys are taught about these legal requirements and they keep abreast of changes to these legal requirements as they occur.  Attorneys can advise you based on their experience and other situations raised in cases decided by a court.  Chances are that you don’t have the same experiences and reference of knowledge that an attorney has.  If you were to make a mistake when creating your will it will likely not come to light until after your death.  At that point, you would have a difficult time correcting that mistake. 

The Advance Directive for Health Care is the method to designate your Health Care Agent or Surrogate and provide instructions for your end-of-life situations.  You designate whether to withhold life support and feeding tubes in certain situations.  These have typically been done through two separate documents:  Living Will and Health Care Power of Attorney.  The Advance Directive for Health Care combines both in a format defined by state law that is familiar to medical professionals. 

Probate is the public process of administering the estate after a person’s death.  It begins through the Register of Wills office in each county and is overseen by the Orphans’ Court.  It is a public record.

Whether you should avoid probate is determined by your estate planning goals.  If your goal is to keep your assets and beneficiaries private and not subject to review by the general public, then you should take steps to avoid probate by creating an estate plan that does that. 

There are two basic types of trusts:  revocable and irrevocable.  They mean how they sound.  A person can change their revocable trust if they choose.  The irrevocable trust is set once it is signed.  A person cannot change the terms of their irrevocable trust on their own. 

 The easy way to think of revocable trusts is as general-purpose estate planning trusts.  The client is in day-to-day control of their own trust.  They can change their trust at any time.  They name people to be in charge of their trust if the client becomes unable to manage their financial affairs and they can leave detailed instructions for those persons to follow during the period of disability.  The revocable trust also provides for the transfer of assets following the death of the client.  It is the most comprehensive tool for general estate planning purposes. 

 Irrevocable trusts tend to be specific purpose trusts as the client gives up certain types of control over assets in order to accomplish the intended result.  Irrevocable trusts are popularly used for charitable purposes, gifting for medical or educational purposes without gift tax, special needs, estate tax reduction, asset protection, and many more purposes. 

 Trusts can have benefits and costs, so it is important to understand both and weigh whether a given type of trust would be appropriate for you.  Being informed keeps you in charge of your plan! 

Maryland recognizes and authorizes the use of pet trusts.  A pet trust can set aside designated assets or a percentage of assets for the care of a pet who survives you.  You would further designate the person who would take care of your pet.  Please talk this over with them before including them in your pet trust.  These trusts can easily be included in your will or revocable trust. 

For people who die in Maryland, there are two possible death taxes:  inheritance and estate.  The estate tax exempts the first $5 million of assets in an estate so that tax is paid on only the amount that exceeds $5 million.  The inheritance tax applies to more distant related beneficiaries as children, grandchildren, parents, grandparents, and siblings are exempt from the inheritance tax.  Anyone else who receives property as a result of someone’s death would trigger a 10% tax (11% if the will or trust pays the tax on the beneficiary’s behalf)

A power of attorney is an estate planning tool that you may use to designate someone to stand in your shoes for the purposes that are named in the power of attorney document.  This authority of your designated agent applies to all property you own in your own name.  It would not provide authority over assets owned in a trust that you created. 

 A power of attorney may be limited or general.  There is not a “standard” power of attorney, however there are statutory form powers of attorney that provide advantages over others. 

Yes, you can leave money to a charity in several ways.  You can name the charity as a beneficiary of any asset for which you can legally name beneficiaries.  You can name the charity as a beneficiary of your will or revocable trust.  Those are simple ways to leave assets to a charity. 

There are also more sophisticated ways to leave assets to a charity.  You can also set up a special charitable trust that would either provide income to the charity during your life with the remainder going to your beneficiaries; or provide income to you for the rest of your life with the remainder at your death going to charity.  These specialized trusts should be used under the counsel of an experienced attorney. 

If you aren’t careful, your children may lose an inheritance to a stepparent.  Titling assets jointly with a spouse is convenient, but that convenience may disinherit children from a prior marriage if the wrong spouse dies first.  A second marriage need not cause such a result.  If the parent’s goal was to provide for the surviving spouse and children then they would need to take action to create an estate plan that would lead to that result.