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Question #1 – Wills
What does it mean to die “intestate”?
Answer #1
If you die without a will, you will have died intestate; meaning your property and belongings will be distributed through the strict intestacy laws of the State. In other words, without a will, your possessions will be dispersed to your closest relatives, and if you have no living heirs, to the State. Therefore, in order to protect your family and your belongings, it is extremely important that everyone makes a valid will; otherwise the State may get to determine how your property is distributed.
Question #2 – Advance Directives
What is a health care proxy? What types of people should look into having one?
Answer #2
A health care proxy is a person who you appoint to make decisions regarding your health when you are unable to do so. In Maryland, you may appoint a person to serve as your health care agent (‘proxy’) in the Advance Directive.
Everyone should have an Advance Directive, as you never know when you will be unable to communicate your wishes concerning your healthcare.
Question #3 – Wills
How is the commission for the executor of the will determined?
Answer #3
Executor's fees are usually strictly controlled by statute.
Question #4 – Trusts
What is an inter vivos trust?
Answer #4
An inter vivos trust is a trust that is created during the lifetime of the creator, as compared to a testamentary trust which established on one’s death.
Question #5 – Probate
What is the probate?
Answer #5
In short, Probate involves paperwork and court appearances by lawyers once an individual dies. Probate is the legal process of overseeing the estate of a deceased person by resolving all claims and distributing the deceased person's property in accordance with the valid will. The probate court decides the validity of a testator’s will.
Question #6 – Wills
Do you owe a commission to anyone that you appoint to do something in you will?
Answer #6
Generally, only the Executor of the Will is entitled to a commission for carrying out the duties attributed to him/her as Executor of the Will. Obviously, Attorneys and other professionals who are sought after by the Executor to assist with probate, etc., are entitled to be paid for their services.
Question #7 – Prenuptial Agreements
My boyfriend wants to have a prenuptial drafted for us. Should I seek independent counsel?
Answer #7
YES, absolutely. Each party to the marriage should seek independent counsel before entering into a prenuptial agreement so that there is full and frank disclosure, a full understanding of the rights, duties and responsibilities of the parties to the agreement, and to ensure that the agreement is free from duress and fraud. If one party seeks counsel and the other does not, and the terms of the agreement are unfavorable to one party, the entire agreement may be considered unenforceable in a court of law.
Question #8 – General
Are there other methods of leaving my property to someone outside of wills?
Answer #8
Yes, through trusts, payable on death accounts, etc. Although it is recommended to still have a Will drafted as those other instruments may not cover everything that you own.
Question #9 – General
What is a GST tax and who does it affect?
Answer #9
The U.S. Generation-skipping transfer (GST) tax imposes a tax on both outright gifts and transfers in trust to or for the benefit of unrelated persons who are more than 37.5 years younger than the donor or to related persons more than one generation younger than the donor, such as grandchildren. The generation-skipping tax will be imposed only if the transfer avoids incurring a gift or estate tax at each generation level.
Question #10 – General
What are the benefits of having accounts set up as “payable on death” for my beneficiaries?
Answer #10
The beneficiaries of those assets receive their share of the assets immediately, as they do not have to undergo the probate process.
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, April 6th , 2012!
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