Do you really need a will?

There is a question we hear alot when people come to our office – namely: Do you really need a will?
You May Not Think You Need a Will, But You Really Do.

Most Americans do not have a simple will as part of their estate plan. You might believe that a will is only for the rich and famous, and not the average person who has a far smaller net worth. On the other hand, you may think that a will is entirely unnecessary since you have a trust, jointly owned property, or have named beneficiaries on your insurance.

So, do you really need a will? The short answer to this question is “yes.” Continue reading

3 Ways to Minimize Estate Planning Fees

Today, it is impossible to put together even a simple estate plan without the assistance of an experienced estate planning attorney. Why? Because estate planning laws vary greatly from state to state and these laws are extremely convoluted and constantly changing.

One wrong word, one missing signature, or one procedure not followed to the letter of the law can partially or completely invalidate a Last Will and Testament, Revocable Living Trust, Advance Medical Directive, Living Will, or Durable Power of Attorney.

Though attorney fees may feel expensive, they’re actually not when viewed in light of the service and protections provided.  In fact, estate planning fees are best viewed as an investment, not an expense.

All that being said, here are 3 simple things you can do to keep the legal costs of setting up and maintaining your estate plan down:

  1. Be Prepared – Before you meet with your estate planning attorney, do your homework. Understand what you own, what you owe, who you would like to inherit what, and who should be in charge of managing your estate if you become mentally incapacitated or after you die. Then, after your estate plan is up and running, to make changes to your estate plan, make a detailed list of what the possible changes should be and forward it to your attorney for comments and questions.
  2. Keep it Simple – While a simple estate plan will be easy and straightforward for your attorney to draft and maintain, a complicated estate plan will be difficult and time consuming. This usually means that a complicated estate plan will cost more.  Keeping it simple will not only help minimize the legal fees while you are alive, but also the costs of settling your estate after you die.
  3. Join Your Attorney’s Estate Plan Maintenance Program – Some estate planning attorneys offer a regular estate plan tune-up for their clients at a reasonable fee. This program will force you to think about your estate plan once a year or every few years depending on the terms of the attorney’s maintenance program.  Maintenance programs help you keep your estate plan current with changes in the law, your attorney’s experiences, and your life, family, goals, and assets.  Estate plans only work if they’re up to date.

Contact our office today at 832.408.0505 to find out howe we can help you protect your loved ones.

Is a Revocable Living Trust Right for You?

Revocable Living Trusts have become the basic building block of estate plans for people of all ages, personal backgrounds, and financial situations. But for some, a Revocable Living Trust may not be necessary to achieve their estate planning goals or may even be detrimental to achieving those goals.

What Are the Advantages of a Revocable Living Trust Over a Will?

Revocable Living Trusts have become popular because when compared with a Last Will and Testament, a Revocable Living Trust offers the following advantages:

  1. A Revocable Living Trust protects your privacy by keeping your final wishes a private family matter, since only your beneficiaries and Trustees are entitled to read the trust agreement after your death.  On the other hand, a Last Will and Testament that is filed with the probate court becomes a public court record which is available for the whole world to read.
  2. A Revocable Living Trust provides instructions for your care and the management of your property if you become mentally incapacitated.  Since a Last Will and Testament only goes into effect after you die, it cannot be used for incapacity planning.
  3. If you fund all of your assets into a Revocable Living Trust prior to your death, then those assets will avoid probate.  On the other hand, property that passes under the terms of a Last Will and Testament usually has to be probated. A probate could add thousands of dollars of costs at your death.

Why Shouldn’t You Use a Revocable Living Trust?

Although Revocable Living Trusts offer privacy protection, incapacity planning, and probate avoidance, they are not for everyone.

For example, if your main concern is avoiding probate of your assets after you die, then you may be able to accomplish this goal without the use a Revocable Living Trust by using joint ownership, life estates, and payable on death or transfer on death accounts and deeds.  However, those strategies aren’t a perfect fit for everyone.

In addition, if you are concerned about protecting your assets in case you need nursing home care, then an Irrevocable Living Trust, instead of a Revocable Living Trust, may be the best option for preserving your estate for the benefit of your family. The rules governing Irrevocable Living Trusts can be very complex, and you should only create an Irrevocable Living Trust after a thorough discussion with a qualified trust attorney.

Do You Still Need a Revocable Living Trust?

While some estate planning attorneys advise their clients against using a Revocable Living Trust under any circumstance, others advise their clients to use one under every circumstance.  Either approach fails to take into consideration the fact that Revocable Living Trusts are definitely not “one size fits all.”  Instead, your family and financial situations must be carefully evaluated on an individual basis and the advantages and disadvantages of using a Revocable Living Trust must be weighed against your personal concerns and estate planning goals.  In addition, these factors must be re-evaluated every few years since your family and financial situations, concerns, and goals will change over time.

If you have a Revocable Living Trust and it has been a few years since it has been reviewed, then we can help you determine if a Revocable Living Trust is still the right choice for you and your family. Contact our office today at 832.408.0505 to find out how we can help you.

3 Reasons You Want to Avoid Probate

When you pass away, your family may need to visit a probate court in order to claim their inheritance. This can happen if you own property (like a house, car, bank account, investment account, or other asset) in only your name. Although having a will is a good basic form of planning, a will does not avoid probate. Instead, a will simply lets you inform the probate court of your wishes – your family still has to go through the probate process to make those wishes legal. Continue reading

Four Reasons Why Estate Planning Isn’t Just for the Top 1 Percent

There is a common misconception that estate plans are only for the ultra-rich – the top 1 percent, 10%, 20%, or some other arbitrary determination of “enough” money.  In reality, nothing could be further from the truth. People at all income and wealth levels can benefit from a comprehensive estate plan. Sadly, many have not sat down to put their legal house in order.

According to a 2016 Gallup News Poll more than half of all Americans do not have a will, let alone a comprehensive estate plan. These same results were identified by WealthCounsel in its Estate Planning Awareness Survey. Gallup noted that 44 percent of people surveyed in 2016 had a will place, compared to 51 percent in 2005 and 48 percent in 1990.  Also, over the years, there appears to be a trend of fewer people even thinking about estate planning.

When it comes to estate planning, the sooner you start the better. Continue reading

5 Things Every New Mother Needs to Know About Wills

As a new mother, you naturally want to ensure your new baby’s future in every way. For many new mothers, infancy is a time for celebrating new life, and making a will is the last thing on their minds. For others, the process of bringing new life into the world sparks intense feelings of wanting control and needing organization. Regardless of where you fall on that spectrum, you might be struggling to figure out what steps you need to take to protect your children’s future should the unthinkable happen. Here are five key things every new mother should know about wills.

  1. Naming a guardian could be the most important part of your will.

If you pass away while your child is a minor, the first issue to be addressed is who will assume responsibility for your child’s care. If you don’t name a guardian for your child in the will, the courts may decide this question for you, and the guardian might not be the person you would choose. Selecting a trusted guardian is in many ways more important at this stage than deciding about how to pass any assets you own.

  1. Name an executor you trust.

To ensure your child does receive all that you have allocated when she comes of age, choose a trustworthy executor. Many people choose a family member, but it’s just as acceptable to appoint a trusted attorney to handle your estate. Typically, an attorney has no emotional attachment to the family, which might seem bad, but usually results in less potential conflict.

  1. Named beneficiaries on your financial accounts may override the will.

Many accounts allow you to name a beneficiary. When you pass away, the funds go to the beneficiary named on the account, even if your will states otherwise. If you’re creating a will with your child in mind (or adding the child to an existing will), you should review your investment and bank accounts with your financial advisor to make sure there are no inconsistencies when naming beneficiaries. It’s also a good time to check retirement account and life insurance beneficiary designations with your financial advisor and your attorney.

  1. A will is not always the right document for your goals.

When naming your child as a beneficiary, a will only goes into effect after you die. If your will leaves property outright to a minor child, the court will step in and hold the assets until your child turns 18. Most 18 year olds lack the maturity to handle even a modest estate, so we don’t recommend outright inheritance for minor children.

A trust, on the other hand, goes into effect when you create it and can provide structure to manage the assets you leave behind for the benefit of your child. An experienced estate planning attorney can advise you on the best option for your family and your circumstances.

  1. In the absence of clearly stated intentions, the state steps in.

Think of a will, trust and other estate planning documents as an instruction manual for your executor and the courts to follow. You must be clear and consistent in your stated intentions regarding your child, as well as for others. If you’re not clear or if you don’t leave any instructions at all, the probate courts will step in and follow the government’s plan, which can lead to long delays and is probably not the plan you would have selected for your child and family.

Providing for your baby’s long-term welfare may start with just a simple will, but to be fully protected, you probably need more. That’s why it’s important to talk with a competent estate planning attorney to make sure you have the right plans in place to fulfill your goals. We’re here to help! Contact our office today at 832.408.0505 to talk about your options to protect your new baby.

Big Bang Theory Star’s “Ironclad” Prenup Challenged: How Does Yours Compare?

The Big Bang Theory actress Kaley Cuoco is one of the highest paid actresses on television. She earns one million dollars per episode and has a net worth of $44 million. Before she married tennis star Ryan Sweeting in 2013, Cuoco asked him to sign a prenuptial agreement (“prenup”).

After less than two years of marriage, Cuoco filed for divorce. She assumed the prenup would be valid. However, Sweeting alleges that the prenup shouldn’t be enforced and he wants spousal support. So, is The Big Bang Theory star’s prenup ironclad? A better question might be – is any?

Cuoco Was Smart, But…

Cuoco was certainly smart to have Sweeting sign a prenuptial agreement as his net worth was only about two million dollars versus her 44 million. However, while a well-written prenup generally addresses asset division and support issues, they are not always ironclad.

In this case, Sweeting alleges that his circumstances have substantially changed due to numerous sports injuries and an addiction to pain killers which have prevented him from earning a living as a tennis player. So, while he didn’t need support when the prenup was signed, he does now.

3 Ways to Invalidate a Prenup

There are generally three ways to invalidate a prenup, by proving:

  1. This is a legal term of art meaning that, under the circumstances, it would be grossly unfair to enforce the document. To overcome it, Cuoco would likely have to prove that Sweeting was represented by an independent attorney who advised him of the consequences before signing.
  2. Legal contracts can be deemed void when one party was coerced into signing it. In its harshest terms, that equates to being forced to sign something at gunpoint. In this case, it means that either Sweeting wasn’t given enough time to read it or didn’t voluntarily sign it.
  3. Sweeting could also allege that Cuoco lied about her net worth and that, based on her fraudulent activity, the prenup shouldn’t be enforced.

If Cuoco’s attorney did his or her job correctly, which seems to be the case, it’s most likely that she’ll prevail.

Don’t Risk Your Wealth!

Prenuptial agreements, part of a strong estate plan, should always be prepared by experienced attorneys (a different one for each party) who know how to comply with the laws of that particular state and take into account what changes in the relationship might affect the validity of the prenup.

Today, 50% of all first marriages end in divorce; more than 70% of all second marriages do so. It makes sense to plan for the worst and hope for the best. Certainly, don’t risk your wealth and future by failing to have as ironclad a prenup (or “postnup” – an agreement made after marriage) as possible. It’s easier to accomplish than you would think and we can provide you with the tools you need to do just that. If you are contemplating marriage, please call our office immediately to make sure you’re protected. Contact our office today at 832.408.0505

 

 

Baltimore Register of Wills Can’t Find Her Father’s Original Last Will, Will Your Family Be Able to Find Yours?

While it’s not unusual for an original last will and testament to be misplaced, it is when your daughter happens to be the Register of Wills for Baltimore City. 

 What is a Register of Wills?

 In Maryland, the Register of Wills is an elected official in each county and the City of Baltimore who is responsible for overseeing the administration of the estates of deceased persons during the probate process.  As an added benefit, each Maryland Register of Wills provides safekeeping for the last will and testaments of living persons.

 Why is it Important to Locate an Original Last Will?

 Belinda Conaway became the Register of Wills for Baltimore City in December 2014 after her stepmother, Mary W. Conaway, held the office from 1982 through 2012.  After Belinda’s father, Frank M. Conaway, Sr., died in February 2015, court records indicate that the family was unable to locate his original last will and testament but did find a copy of a will he signed in 1999.  The 1999 will left Mr. Conaway’s estate equally to his children, Belinda and Frank M. Conaway, Jr.  In March 2015, Belinda filed a petition requesting that the copy of the will be admitted to probate.  She stated in her petition, “This copy was found among the personal papers and I have not been able to locate the original.” 

 Ironic, isn’t it?  Fortunately in this case, Mr. Conaway’s children agreed that the 1999 will was in fact their father’s last will and the probate judge admitted the copy to probate.  But this may not be the case in your situation.  Sometimes after an original will goes missing and a copy is found, family members will disagree about whether it is in fact the deceased person’s last will.  If this is the case, then the copy may be overlooked in favor of an older original will that has been located or state laws that dictate who inherits when there is no will (known as “intestacy laws”).

 This is why it is so important for your loved ones to be able to find your most-recent original last will – because without it, the laws of your state may presume that you intended to destroy your will and a copy of it will be viewed as worthless.

 Who Knows Where to Find Your Original Will?

 Do you know where your original will is located?  Do your loved ones know where your original will is located?  While your family members certainly don’t need to know what your will says, they do need to know where your original will is being stored. 

 On the other hand, if you’re uncomfortable letting family members know where to find your original will, then let someone you trust – such as your attorney, accountant, or financial advisor – know where to find your original will.  Otherwise, your family may end up in front of a probate judge and your true final wishes may be overlooked. Contact our office today at 832.408.0505 to see how we can help you!

 

3 Simple Ways to Avoid Probate Costs

The bad news: probated estates are subject to a variety of costs from attorneys, executors, appraisers, accountants, courts, and state law. Depending on the probate’s complexity, fees can run into tens of thousands of dollars.

The good news: probate costs can be reduced by avoiding probate. It’s really that simple.

Here are three simple ways to avoid probate costs by avoiding probate:

 Name a Beneficiary. The probate process determines who gets what when there is no beneficiary designation. So, naming a beneficiary is the easiest way to avoid probate. Common beneficiary designation assets include:

  • Life insurance
  • Annuities
  • Retirement plans
  1. Create and Fund a Revocable Living Trust. A revocable living trust owns your property, yet you remain in charge of all legal decisions until your death. After your death, your named trustee manages your assets – according to your A trust works well if properly created and funded by an experienced estate planning attorney.
  1. Own Property Jointly. Probate can be avoided if the property you own is held jointly with a right of survivorship. There are several ways that you can establish joint ownership of property such as:
  • Joint tenancy with right of survivorship – ownership simply transfers to other tenants upon your death;
  • Tenancy by its entirety – is a form of joint tenancy with right of survivorship, but only for married couples in some states;
  • Community property – property obtained during a marriage in some states;

State laws play an important role here. We can help you determine which form of joint ownership, if any, is a good fit for you.

 We Have the Tools to Help You

Contact our office today at 832.408.0505. We’ll help you decide whether it makes sense to avoid probate in your particular case and, if so, the best way to do so.

What to Expect from Estate Planning in 2018

2017 is now fading into the rearview mirror. As we all look ahead to 2018, let’s consider a few things to watch regarding estate planning, so you and your family can be completely protected.

  • The death tax. The death tax has been in a state of flux ever since the early 2000s when the Bush administration’s first tax cuts changed the exemption and tax rates. The recently-passed Tax Cuts and Jobs Act is the latest significant change. Starting January 1, 2018, the estate tax exemption amount will double to $11.2 million per person (married couples have $22.4 million of combined exemption). Like the current exemption, this amount will adjust annually for inflation. However, this enhanced exemption expires on December 31, 2025, at which time it will return to an amount similar to the $5.49 million per person exemption we’ve had in 2017. Similar to what happened when the Bush tax cuts phased in (and were scheduled to expire) during the 2000s, we’ll face the same situation over the coming years – the law provides a deadline and timetable, but political activity may result in something entirely different. Regardless of your stance on this new tax law, if you have a plan based around the now-old rules, it’s time to visit with us, so we can make sure the plan still meets your needs and goals while maximizing the benefit to your family, charities, or other beneficiaries.
  • Incapacity planning. What happens if you don’t die? Historically, much of estate planning focused on what happened to your assets after your death. With cognitive impairment at near epidemic proportions, you must plan for the contingency that you don’t die and instead require assistance managing your affairs. Depending on your circumstances, this could range from a relatively simple matter of ensuring you have a trusted person authorized to make decisions to extensive planning to become eligible for help paying for nursing home care. Either way, now is the time to work with us to ensure that your plan protects you, even if you don’t die.
  • Giving your family lifelong financial security. Although you may not have a “large” amount of wealth now, you probably have an IRA or a life insurance policy. A modest IRA or life insurance policy could be the foundation for lifelong financial security for your family. To make this a reality, you need to set up your affairs with the proper structures to ensure money avoids costs, taxes, and the risk of financial immaturity or ignorance. We are here to help you ensure that the savings you’ve spent a lifetime building will be there for your family.
  • Fixing broken or old trusts. Many people have inherited assets from parents, aunts, uncles, and others through a trust. Some of these trusts may use old strategies or be expensive or difficult to administer. The law recognizes that old trusts may need some refreshing. There are many options available to modernize an old trust, and the best way to get started is to meet with us so we can explore which option is best for you and the trust you inherited.

2018 will likely be an exciting, dynamic year. No matter where you are on the estate planning journey, carve out some time to talk with us to make sure that you and your family are fully protected. Give us a call today.