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Question #1 - Wills
I am trying to determine whether I just need a simple will or if I should go with a trust and pour over will to protect my assets, can you tell me what the cutoff amount is in Maryland? Knowing this would definitely assist me in making a decision and moving forward.
Answer #1
Maryland Estate Tax
A Maryland estate tax return is required to be filed for every estate whose gross estate plus adjusted taxable gifts equals or exceeds $1,000,000. If your assets and net worth are less than $1,000,000, no return is required and a simple will may be sufficient. If a return is required, the tax rate is limited to 16% of the amount that the estate value exceeds $1,000,000.
*We recommend that you speak with a qualified Estate Planning Professional if your total assets and net worth equal or exceed $1,000,000.00 so that you can plan properly.
Question #2 - Wills
If I already have a will (executed many years ago) when should I update the will? I guess what I am asking is – are there any particular circumstances when you should update your will?
Answer #2
Yes, there are certain circumstances that if they were to occur, we recommend that you update your will. Those circumstances include the following: a significant increase or decrease in wealth; death of a beneficiary; children are now adults; guardian of children dies or circumstances surrounding relationship change; unexpected illness or injury of a beneficiary; marriage; divorce; the birth of a grandchild, etc.
Question #3 – Advance Directive/Living Will
What is the difference between death from a terminal condition, persistent vegetative state and end state condition? They provide all three scenarios on the form, when discussing with my daughter, we thought that they overlap, please explain.
Answer #3
The Advance Directive form provided by the Maryland Attorney General’s Office includes a very important section entitled, “Preference in case of Terminal Condition.” Within that section, the three situations as indicated above are listed and you are given three choices to make.
As Defined by the Maryland Attorney General’s Office:
A. Terminal Condition" means an incurable condition caused by injury, disease, or illness which, to a reasonable degree of medical certainty, makes death imminent and from which, despite the application of life-sustaining procedures, there can be no recovery.
B."Persistent Vegetative State" a condition caused by injury, disease, or illness:
- In which a Resident has suffered a loss of consciousness, exhibiting no behavioral evidence of self-awareness or awareness of surroundings in a learned manner other than reflex activity of muscles and nerves for low level conditioned response; and
- From which, after the passage of a medically appropriate period of time, it can be determined, to a reasonable degree of medical certainty that there can be no recovery.
C."End-Stage Condition" means an advanced, progressive, irreversible condition caused by injury, disease, or illness:
- That has caused severe and permanent deterioration indicated by incompetency and complete physical dependency; and
- For which, to a reasonable degree of medical certainty, treatment of the irreversible condition would be medically ineffective.
Question #4 – Wills – SPECIAL: Digital Assets
I have multiple digital assets – facebook, twitter, linked in, myspace accounts; gmail, Hotmail and yahoo email accounts; a Kodak picture gallery account and several registered domain names. I heard through some friends of mine that there are ways to include this information in my actual estate plan, like incorporated into my will or something like that. Can you explain this process/procedure?
Answer #4
You are absolutely correct. There are ways to make reference to your digital assets in your estate plan so that your digital assets upon your death are either terminated or forwarded to a beneficiary that you named prior to your death. MVP works with a company called Entrustet (www.entrustet.com) who has developed software that allows for you to list all of your digital assets and either provide a beneficiary that the asset will be forwarded to upon your death, or state that the account/asset should terminate upon your death. This list is then incorporated into your will by reference. The company listed above only provides the program to list your digital assets, you then would go meet with a qualified Estate Planning Professional to have this list incorporated into your will.
Question #5 - Trusts
When should a Lawyer’s services be utilized?
Answer #5
There are many self-help kits on the internet that allow individuals to prepare and plan their own trusts; however, as the creation of a trust is complex and expensive in nature, we recommend that you obtain the expertise of a licensed professional who has experience in the estate planning process. It is always better to have the assistance of an experienced attorney to guide you through the challenging process.
Question #6 – Power of Attorney
I am in the military – contract basis. I am being deployed back to Afghanistan here shortly. I want to give my best friend the authority to pay my bills, take care of my mortgage, and take care of any other financial business while I’m gone. Would the Statutory Power of Attorney be the best vehicle to carry out my desires?
Answer #6
As provided on the first page of the MD Statutory Power of Attorney - The powers granted by the principal in the Statutory document are broad and sweeping. The power of attorney authorizes another person to make decisions concerning your property for you. Your agent will be able to make decisions and act with respect to your property (including your money) whether or not you are able to act for yourself. You should select someone you trust to serve as your agent. Unless you specify otherwise, generally the agent’s authority will continue until you die or revoke the power of attorney or the agent resigns or is unable to act for you. You need not grant all of the powers listed below. If you choose to grant less than all of the listed powers, you may instead use a Maryland Statutory Form Limited Power of Attorney and mark on that Maryland Statutory Form Limited Power of Attorney which powers you intend to delegate to your attorney-in-fact (the Agent) and which you do not want the Agent to exercise. The power of attorney becomes effective immediately unless you state otherwise in the Special Instructions.
*We recommend that you speak with a qualified Estate Planning Professional to ensure that you give only the power/authority you wish to your best friend to carry out your financial matters in your best interest.
Question #7 – Power of Attorney
What types of things can a POA cover?
Answer #7A POA can cover a wide variety of things, mainly dealings with property and finances. The principal may give the agent the authority to act in their behalf in regards to the following types of transactions:
• Real property transactions
• Tangible personal property transactions
• Stock & Bond transactions
• Commodity & option transactions
• Banking & other Financial institution transactions
• Business operating transactions
• Insurance & Annuity transactions
• Estate, trust & other beneficiary transactions
• Claims & Litigation
• Personal & Family Maintenance
• Benefits from Social Security, Medicare, Medicaid, or other Government programs or Military service
• Retirement plan transactions
• Tax matters
Question #8 - Trusts
What property can be transferred to a Trust?
Answer #8
Several types of property may be transferred to a Trust, and we can assist you through this process as a different method may be required for each type of property. The following types of property can be effectively transferred to a Trust:
• Personal property
• Automobiles
• Real Estate
• Bank Accounts
• Registered Stocks & Bonds
• Life Insurance
• Retirement Plans
Question #9 – Advance Directive/Living Will
Should I indicate/have a provision in my Will that provides my plans for my burial or in my Advance Directive or in both?
Answer #9
Considering that your Will - will not be seen until after your death, it would make sense to include any information concerning your funeral arrangements in your Advance Directive. If you do include information concerning your burial in your Advance Directive, you should also discuss these plans in detail with your immediate family members so that your wishes are known and carried out.
Question #10 - Wills
I don’t have much, but I don’t want what I do have going to any of my family members. I never married, don’t have any kids and I’ve worked very hard for what I do have. What would happen if I don’t set up a will? Can I give everything to a charity?
Answer #10
The Intestate Succession laws as provided by the Register of Wills for Maryland provides given your circumstances that the following will occur if you die without a will:
1. Parents of the decedent divide entire estate or surviving parent takes all;
2. Brothers/sisters of the decedent without heirs listed above-brothers and sisters divide estate equally (share of deceased sibling goes to their issue-nieces and nephews of the decedent);
3. Grandparents without other heirs listed above-grandparents divide entire estate or, if deceased, to their issue (see applicable law for details);
4. Great-grandparent without other heirs listed above-great-grandparents divide entire estate or, if deceased, to their issue (see applicable law for details);
5. Step-children-if there are no heirs listed above;
6. No living heirs or step-children-If decedent was a recipient of long-term care benefits under the Maryland Medical Assistance Program at time of death, net estate is paid to Department of Health and Mental Hygiene. Otherwise, the net estate is paid to the Board of Education.
If you do not want your assets going to your family members, you may in fact give everything to a charity by making that designation in your will.
MVP Law Group would like to thank everyone who contributed a question or comment.
Our next “Estate Planning Q & A Forum” is scheduled for Friday, August 26th, 2011!
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
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