MVP Law Group, P.A. makes available the information and materials in this forum for informational purposes only. The information is general in nature and does not constitute legal advice or any contractual obligations. Further, the use of this site, and the sending or receipt of this information, does not create an attorney-client relationship between us. And, therefore, your communication with us through this forum will not be considered as privileged or confidential.
Question #1 – General
What's the difference between an inheritance tax and an estate tax?
Answer #1
The inheritance tax is imposed on the clear value of property that passes from a decedent to some beneficiaries. The tax is levied on property that passes under a will, the intestate laws of succession, and property that passes under a trust, deed, joint ownership, or otherwise. The tax is collected by the Register of Wills located in the county where the decedent either lived or owned property. Property passing to a child or other lineal descendant, spouse of a child or other lineal descendant, spouse, parent, grandparent, stepchild or stepparent, siblings or a corporation having only certain of these persons as stockholders is exempt from taxation, all other individuals are taxed at a rate of 10%.
The Maryland estate tax is a state tax imposed on the transfer of property in a decedent's estate. Accordingly, an estate tax return is required for every estate whose federal gross estate equals or exceeds $1,000,000. Therefore, if your federal gross estate does not equal or exceed $1M, you do not have to worry about the Maryland estate tax. The tax rate is limited to 16% of the amount that the estate value exceeds $1,000,000.
Question #2 – Trusts
What does it mean to have a living trust and why is it important?
Answer #2
A living trust, also called an inter vivos trust, is a trust which is effective during the lifetime of the person who created the trust. The person who created the living trust, the creator (grantor), may change the terms of the living trust during his/her lifetime. A living trust typically contains instructions for managing trust assets during the creator's lifetime as well as instructions for distributing trust assets upon the creator's/grantor’s incapacity or death, thereby eliminating the need for conservatorship or probate proceedings.
Question #3 – Wills
If my children are under 18, still legal minors, can they inherit anything that I leave them?
Answer #3
The Maryland Uniform Transfers to Minors Act (MUTTMA) allows the donor of the gift to transfer title to a custodian who will manage and invest the property until the minor reaches the age of 21.
Question #4 – Advance Directive/Living Will
Does power of attorney medical care mean that only my attorney can make decisions regarding my health?
Answer #4
The term ‘power of attorney’ is a term of art; it does not mean that your attorney may make decisions regarding your health. You may in fact appoint your attorney to serve as your health care agent; however, anyone whom you trust may serve as your health care power of attorney and/or financial power of attorney.
A power of attorney is a document that allows you to appoint a person or organization to handle your affairs while you're unavailable or unable to do so. The person or organization you appoint is referred to as an "Attorney-in-Fact" or "Agent.
Question #5 – Trusts
If I create and irrevocable trust and later decided that I need to amend it, is there really nothing that can be done to change it?
Answer #5
An irrevocable trust is a trust that cannot be modified or terminated without the permission of the beneficiary. The creator/grantor, having transferred assets into the trust, effectively removes all of his or her rights of ownership to the assets and the trust. This is the opposite of a "revocable trust", which allows the creator/grantor to modify the trust.
Question #6 –Wills
What is probate?
Answer #6
The Office of the Register of Wills for the State of Maryland provides the following:
The literal interpretation means to prove, as in proving one's will. It can be done administratively in the Register of Wills Office or judicially by the Orphans' Court when necessary. It is the marshalling of assets, the payment of all creditors and the transference of all property in the decedent's name to the beneficiaries either named in the will or who would inherit under the laws of intestacy (dying without a will).
Question #7 – Wills
What property is included in an individual's probate estate?
Answer #7
An individual’s probate estate includes only property subject to estate administration after the death of the individual. Examples of probate property are houses, cars, furniture, stocks, bonds, and bank accounts titled in an individual’s name. Examples of property not typically included an individual’s probate estate are assets which pass pursuant to a beneficiary designation form such as life insurance policies, annuities, and certain retirement accounts, or assets held jointly with others with rights of survivorship, or assets titled in the name of the deceased individual's trust.
Question #8 – General
What is a conservatorship?
Answer #8
A conservatorship is a court procedure where a Judge declares an individual unable to take care of his/her own legal matters and appoints another individual, known as a conservator, to do so.
Question #9 – Trusts
In what ways can I protect my child who has special needs in case of my death? Is there anything special that I need to do?
Answer #9
You could create a Special Needs Trust. A special needs trust is created to ensure that beneficiaries who are disabled or mentally ill can enjoy the use of property which is intended to be held for their benefit. In addition to personal planning reasons for such a trust (the person may lack the mental capacity to handle their financial affairs) there may be fiscal advantages to the use of a trust. Such trusts may also avoid beneficiaries losing access to essential government benefits. A common feature of trusts is that they may be run either by family members (a private trust) or by trustees appointed by the court. Especially where a trust is to be established for a disabled child or young person, great care is generally taken in the choice of appropriate trustees to manage the trust assets and to deal with future replacement appointments.
Question #10 – General
What is estate tax and how does it affect me?
Answer #10
The Maryland estate tax is a state tax imposed on the transfer of property in a decedent's estate. Accordingly, an estate tax return is required for every estate whose federal gross estate equals or exceeds $1,000,000. Therefore, if your federal gross estate does not equal or exceed $1M, you do not have to worry about the Maryland estate tax.
MVP Law Group would like to thank everyone who contributed a question or comment.
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
Monday, November 7, 2011
Monday, October 31, 2011
Next Estate Planning Q&A Forum - Friday, November 4, 2011
MVP Law Group is excited to announce the launch of our “Estate Planning Q & A Forum.” Every other Friday, we will post the 10 most frequently asked questions received during the week from our Facebook/Twitter followers and website visitors. We will answer those questions on our Estate Planning Blog.
Our next “Q & A Forum” will take place this Friday, November 4, 2011. Act now and submit your questions!
Our next “Q & A Forum” will take place this Friday, November 4, 2011. Act now and submit your questions!
Monday, October 24, 2011
MVP LAW GROUP – Estate Planning Q&A Forum, Friday, October 21, 2011
MVP Law Group, P.A. makes available the information and materials in this forum for informational purposes only. The information is general in nature and does not constitute legal advice or any contractual obligations. Further, the use of this site, and the sending or receipt of this information, does not create an attorney-client relationship between us. And, therefore, your communication with us through this forum will not be considered as privileged or confidential.
Question 1 – Power of Attorney
Should I give copies of my POA to the Bank, my mortgage specialist, my stock broker or should I just provide my agent with a copy?
Answer 1
You should provide a copy to your designated agent, but I would not recommend providing a copy to the Bank, your mortgage specialist or your stock broker because of the broad sweeping authority the POA gives to your agent. It becomes effective upon signature, so even if you are not incapable of making financial decisions on your own, your agent has the authority and access to do any such acts as stated in the Statutory POA.
Question 2 – Wills
What is probate? When a will is admitted to probate, what exactly does that mean?
Answer 2
The Office of the Register of Wills for the State of Maryland provides the following:
The literal interpretation means to prove, as in proving one's will. It can be done administratively in the Register of Wills Office or judicially by the Orphans' Court when necessary. It is the marshalling of assets, the payment of all creditors and the transference of all property in the decedent's name to the beneficiaries either named in the will or who would inherit under the laws of intestacy (dying without a will).
Question 3 – Advance Directive
Should I provide copies of my Advance Directive to my PCP, the hospital near my home, and my therapist or should I just provide my agent with a copy?
Answer 3
You should provide copies of your Advance Directive to the following interested persons:
1.Designated health care agent;
2.Primary care physician;
3.Hospital or treatment center;
4.Therapist;
5.Any other doctors that you frequent (i.e., gastrologist; oncologist; cardiologist; gynecologist)
6.You may wish to keep a copy of the Advance Directive in your vehicle;
7.You may wish to keep a copy of the Advance Directive in your wallet/purse.
Question 4 – Wills
What are probate assets?
Answer 4
Individual assets include all property titled in the decedent's sole name, without any other owners or a payable on death or similar type of beneficiary designation. Types of assets that can be titled this way include bank accounts; investment accounts; stocks and bonds; cars, boats, scooters and airplanes; business interests; real estate and tenant in common assets.
Question 5 – Wills
When should a Lawyer’s services be used?
Answer 5
There are many self-help kits on the internet that allow individuals to prepare and plan their own wills;however, we recommend that you obtain the expertise of a licensed professional who has experience in the estate planning process. It is important that your will is drafted with your goals in mind, whether those goals include protecting your legacy, reducing taxes, etc. It is always better to have the assistance of an experienced attorney to guide you through the challenging process. There are also signature requirements and a signing ceremony which is extremely important and could pose issues in the future if not done properly.
Question 6 – Wills
My father recently passed and designated me as his executor in his will. What do I need to do to get started?
Answer 6
The following is a partial list of items you will be required to furnish to open an estate in Maryland:
•Decedent's Last Will and Testament
•Death Certificate
•Funeral Contract/Bill
•Approximate value of assets in the decedent's name alone
•Title to decedent's automobiles and/or other motor vehicle
•Names and addresses of persons interested in the estate
•Regular Estate Forms - forms available on the MD Office of the Register of Wills website
•Small Estate Forms - forms available on the MD Office of the Register of Wills website
•Any applicable filing fee
Question 7 – Power of Attorney
I am aware that the new Statutory Power of Attorney is very broad and covers everything, is there an alternative, is there an option to only allow an agent to act in your behalf on certain issues like real estate and not everything? Please advise.
Answer
Yes, there is a Statutory Limited Power of Attorney available in the State of Maryland. This statutory form allows the principal to designate particular categories and actions, it is specific and would allow the agent to only act as designated in the form. The form covers the same subjects as the Durable Statutory Power of Attorney: Real Property; Tangible Personal Property; Stocks and Bonds; Commodities; Banks and other Financial Institutions; Operation of an Entity or Business; Insurance and Annuities; Estates, Trusts and other Beneficial Interests; Claims and Litigation; Personal and Family Maintenance; Benefits from Governmental Programs or Civil or Military Service; Retirement Plans, Taxes; and Gifts.
Question 8 – Wills
My father has a number of vehicles that he has collected over the years. He is still presently alive but he is not doing well, we are trying to understand the whole ‘probate’ process before we must go down that road as a family. My question is how difficult is it to transfer ownership of a vehicle? All of his cars have been registered and inspected in the State of Maryland, he’s got three antiques and two trucks, all running.
Answer
As stated on the Maryland Motor Vehicle Administration (MVA) website - If the vehicle is owned by the deceased person and its ownership is to be transferred to a legal heir, legatee, distributee or sold, you will need to contact the Register of Wills in the jurisdiction in which the deceased was a resident to confirm that you have all of the necessary documents and obtain the legal heir certification or letters of administration.
When presenting the MVA with letters of testamentary or administration to complete the transfer of ownership for a vehicle, the MVA can accept only the original. The original letters, which are issued by the Register of Wills, have a raised seal.
If you are a legal heir, legatee or distributee this is what you need to do:
•A legal heir is a person, usually a descendant of the deceased individual, who inherits property and/or wealth owned by the deceased.
•A legatee refers to a person named within the will of a deceased, not necessarily a relative.
•A distributee describes a person entitled to share in the distribution of the estate of the deceased.
•If the ownership is being transferred to a legal heir, legatee or distributee, the "assignment of ownership" section on the back of the "Maryland Certificate of Title" must be completed.
•The original letters of administration, naming the administrator, must be included with the title to transfer the ownership. Please be sure to give the administrator's full name and address.
Question 9 – Advance Directive
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
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
Funeral expenses allowance for person who dies in year 2011?
Answer
The current funeral allowance for a regular estate is $10,000.00. Additionally, if the estate is solvent and the decedent's Will expressly empowers the personal representative to pay the funeral expenses without Court approval, a Petition and Court Order is not required.
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, November 4th, 2011!
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
Question 1 – Power of Attorney
Should I give copies of my POA to the Bank, my mortgage specialist, my stock broker or should I just provide my agent with a copy?
Answer 1
You should provide a copy to your designated agent, but I would not recommend providing a copy to the Bank, your mortgage specialist or your stock broker because of the broad sweeping authority the POA gives to your agent. It becomes effective upon signature, so even if you are not incapable of making financial decisions on your own, your agent has the authority and access to do any such acts as stated in the Statutory POA.
Question 2 – Wills
What is probate? When a will is admitted to probate, what exactly does that mean?
Answer 2
The Office of the Register of Wills for the State of Maryland provides the following:
The literal interpretation means to prove, as in proving one's will. It can be done administratively in the Register of Wills Office or judicially by the Orphans' Court when necessary. It is the marshalling of assets, the payment of all creditors and the transference of all property in the decedent's name to the beneficiaries either named in the will or who would inherit under the laws of intestacy (dying without a will).
Question 3 – Advance Directive
Should I provide copies of my Advance Directive to my PCP, the hospital near my home, and my therapist or should I just provide my agent with a copy?
Answer 3
You should provide copies of your Advance Directive to the following interested persons:
1.Designated health care agent;
2.Primary care physician;
3.Hospital or treatment center;
4.Therapist;
5.Any other doctors that you frequent (i.e., gastrologist; oncologist; cardiologist; gynecologist)
6.You may wish to keep a copy of the Advance Directive in your vehicle;
7.You may wish to keep a copy of the Advance Directive in your wallet/purse.
Question 4 – Wills
What are probate assets?
Answer 4
Individual assets include all property titled in the decedent's sole name, without any other owners or a payable on death or similar type of beneficiary designation. Types of assets that can be titled this way include bank accounts; investment accounts; stocks and bonds; cars, boats, scooters and airplanes; business interests; real estate and tenant in common assets.
Question 5 – Wills
When should a Lawyer’s services be used?
Answer 5
There are many self-help kits on the internet that allow individuals to prepare and plan their own wills;however, we recommend that you obtain the expertise of a licensed professional who has experience in the estate planning process. It is important that your will is drafted with your goals in mind, whether those goals include protecting your legacy, reducing taxes, etc. It is always better to have the assistance of an experienced attorney to guide you through the challenging process. There are also signature requirements and a signing ceremony which is extremely important and could pose issues in the future if not done properly.
Question 6 – Wills
My father recently passed and designated me as his executor in his will. What do I need to do to get started?
Answer 6
The following is a partial list of items you will be required to furnish to open an estate in Maryland:
•Decedent's Last Will and Testament
•Death Certificate
•Funeral Contract/Bill
•Approximate value of assets in the decedent's name alone
•Title to decedent's automobiles and/or other motor vehicle
•Names and addresses of persons interested in the estate
•Regular Estate Forms - forms available on the MD Office of the Register of Wills website
•Small Estate Forms - forms available on the MD Office of the Register of Wills website
•Any applicable filing fee
Question 7 – Power of Attorney
I am aware that the new Statutory Power of Attorney is very broad and covers everything, is there an alternative, is there an option to only allow an agent to act in your behalf on certain issues like real estate and not everything? Please advise.
Answer
Yes, there is a Statutory Limited Power of Attorney available in the State of Maryland. This statutory form allows the principal to designate particular categories and actions, it is specific and would allow the agent to only act as designated in the form. The form covers the same subjects as the Durable Statutory Power of Attorney: Real Property; Tangible Personal Property; Stocks and Bonds; Commodities; Banks and other Financial Institutions; Operation of an Entity or Business; Insurance and Annuities; Estates, Trusts and other Beneficial Interests; Claims and Litigation; Personal and Family Maintenance; Benefits from Governmental Programs or Civil or Military Service; Retirement Plans, Taxes; and Gifts.
Question 8 – Wills
My father has a number of vehicles that he has collected over the years. He is still presently alive but he is not doing well, we are trying to understand the whole ‘probate’ process before we must go down that road as a family. My question is how difficult is it to transfer ownership of a vehicle? All of his cars have been registered and inspected in the State of Maryland, he’s got three antiques and two trucks, all running.
Answer
As stated on the Maryland Motor Vehicle Administration (MVA) website - If the vehicle is owned by the deceased person and its ownership is to be transferred to a legal heir, legatee, distributee or sold, you will need to contact the Register of Wills in the jurisdiction in which the deceased was a resident to confirm that you have all of the necessary documents and obtain the legal heir certification or letters of administration.
When presenting the MVA with letters of testamentary or administration to complete the transfer of ownership for a vehicle, the MVA can accept only the original. The original letters, which are issued by the Register of Wills, have a raised seal.
If you are a legal heir, legatee or distributee this is what you need to do:
•A legal heir is a person, usually a descendant of the deceased individual, who inherits property and/or wealth owned by the deceased.
•A legatee refers to a person named within the will of a deceased, not necessarily a relative.
•A distributee describes a person entitled to share in the distribution of the estate of the deceased.
•If the ownership is being transferred to a legal heir, legatee or distributee, the "assignment of ownership" section on the back of the "Maryland Certificate of Title" must be completed.
•The original letters of administration, naming the administrator, must be included with the title to transfer the ownership. Please be sure to give the administrator's full name and address.
Question 9 – Advance Directive
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
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
Funeral expenses allowance for person who dies in year 2011?
Answer
The current funeral allowance for a regular estate is $10,000.00. Additionally, if the estate is solvent and the decedent's Will expressly empowers the personal representative to pay the funeral expenses without Court approval, a Petition and Court Order is not required.
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, November 4th, 2011!
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
Monday, October 17, 2011
Next Estate Planning Q&A Forum - Friday, October 21 , 2011
MVP Law Group is excited to announce the launch of our “Estate Planning Q & A Forum.” Every other Friday, we will post the 10 most frequently asked questions received during the week from our Facebook/Twitter followers and website visitors. We will answer those questions on our Estate Planning Blog.
Our next “Q & A Forum” will take place this Friday, October 21, 2011. Act now and submit your questions!
Our next “Q & A Forum” will take place this Friday, October 21, 2011. Act now and submit your questions!
Monday, October 10, 2011
MVP LAW GROUP – Estate Planning Q&A Forum, Friday, October 7, 2011
MVP Law Group, P.A. makes available the information and materials in this forum for informational purposes only. The information is general in nature and does not constitute legal advice or any contractual obligations. Further, the use of this site, and the sending or receipt of this information, does not create an attorney-client relationship between us. And, therefore, your communication with us through this forum will not be considered as privileged or confidential.
Question #1 – General
What is the current gift tax exemption?
Answer #1
Every taxpayer can take advantage of the $13,000 exclusion, every year. A taxpayer may make as many gifts as he or she desires as long as no one person gets more than $13,000 of value in any one year. Married couples may therefore give $26,000 to each recipient; if they make a special election, the entire $26,000 can come from one partner’s property.
Question #2 - Trusts
What kind of protections can I get if I create a trust rather than a standard last will and testament?
Answer #2
A trust can give you:
• Control--by protecting your beneficiaries from fraud or mismanagement of your assets, especially in case of your disability or death.
• Continuity--by continuing to manage your assets appropriately if you encounter a life-changing event.
• Privacy--by keeping your affairs out of the public record. A will becomes a public record when it's filed with a probate court upon your death, so if you use just a will for estate planning, anyone can access it. However, almost with any trust, an experienced Estate Planner would recommend a pour-over will for the applicant to cover anything and everything not placed in the trust.
• Tax advantages--by distributing your assets in a way that minimizes your tax burden, or that of your beneficiaries.
There are many types of trusts, each designed to accomplish specific goals. Trusts can be great tools, but they're complex, so it's important to understand how they work and how to get started.
Question #3 – Advance Directive
If I have changed my mind about receiving life support and being an organ donor, can I change my Advance Directive easily?
Answer #3
You may revoke your Advance Directive at any time. You are completely in control of your health care directions, and if your desires change at any time, you should destroy the original and execute a new Advance Directive to reflect your wishes. You should also inform all who have a copy to return it to you to be destroyed, and let them know that you have revoked it, as your health care directions have changed, and if possible, provide them with a copy of the new Advance Directive.
Question #4 – Wills
What can a will not do?
Answer #4
A will cannot cover property held as Joint Tenants/ or Tenants by the Entireties, or property transferred to a living trust. A will cannot cover proceeds of a Life Insurance Policy, money in a pension plan, IRA, 401(k) plan, or other retirement plan. However, you may on your own change the name of the beneficiary on the forms provided by the insurance agency, financial institution, etc. A will cannot cover stocks and bonds held in beneficiary forms. Additionally, a will cannot cover money in a payable-on-death bank account, as a simple form can be obtained from your bank to change the beneficiary listed.
Question #5 - General
What is the Maryland estate tax?
Answer #5
According to the Comptroller of Maryland website - The Maryland estate tax is a transfer tax imposed on the transfer of assets from an estate. The tax rate is limited to 16 percent of the amount that the estate value exceeds $1,000,000. It is based on the maximum credit for state death taxes allowable under § 2011 of the Internal Revenue Code. It is calculated by deducting the inheritance tax paid to the Register of Wills from the allowable credit.
Question #6 – Wills
I am trying to determine whether I 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 assist me in making a decision.
Answer #6
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 #7 – General
What types of gift are generally not taxable?
Answer #7
Generally, the following gifts are not taxable gifts: gifts that are not more than the annual exclusion for the calendar year; gifts to a political organization for its use; gifts to charities; gifts to one's (US taxpayer) spouse; Tuition or medical expenses one pays directly to a medical or educational institution for someone.
Question #8 – Advance Directive
I just underwent a severe surgery and the Nurse asked if I had a Living Will ( “Advance Directive”), I said no but went home and looked it up on the internet. If I have one drafted, who do I give it to and will they listen to it?
Answer #8
You should distribute copies of your Advance Directive to your health care agent, family, doctors and/or medical facility most likely to treat you, otherwise it will be wasted time, money and words on a sheet of paper. Your Advance Directive should be in the hands of the people who need to know about it, so that your health care directions are carried out in accordance with your wishes.
If your Advance Directive is valid (signed by the appropriate amount of witnesses, and the person whom you have listed as your health care agent is not in violation of State law), then your health care agent, doctors and medical facility most likely to treat you must follow your wishes regarding your health care treatment.
Question #9 – Wills
I just joined an organization that I would like to include in my estate plan. I had my will drafted at least four years ago, in 2007. Can I do this easily?
Answer #9
You may make changes to your will whenever desired and should when your current situation changes. For instance, if you move to a new state, get married or divorced, have a baby, have step children or adopt, and if you acquire or dispose of substantial assets, you should change your will to reflect your current situation.
You may make changes by adding a codicil to your existing will or by creating an entirely new will.
Question #10 – Wills
I have multiple digital assets – facebook, twitter, linked In, gmail, Hotmail and yahoo email accounts, a Kodak picture gallery account, a Snapfish picture account and several registered domain names. I heard through some friends of mine that there are ways to include this information in my will or something like that. Can you explain this process/procedure?
Answer #10
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.
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, October 21st, 2011!
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
Question #1 – General
What is the current gift tax exemption?
Answer #1
Every taxpayer can take advantage of the $13,000 exclusion, every year. A taxpayer may make as many gifts as he or she desires as long as no one person gets more than $13,000 of value in any one year. Married couples may therefore give $26,000 to each recipient; if they make a special election, the entire $26,000 can come from one partner’s property.
Question #2 - Trusts
What kind of protections can I get if I create a trust rather than a standard last will and testament?
Answer #2
A trust can give you:
• Control--by protecting your beneficiaries from fraud or mismanagement of your assets, especially in case of your disability or death.
• Continuity--by continuing to manage your assets appropriately if you encounter a life-changing event.
• Privacy--by keeping your affairs out of the public record. A will becomes a public record when it's filed with a probate court upon your death, so if you use just a will for estate planning, anyone can access it. However, almost with any trust, an experienced Estate Planner would recommend a pour-over will for the applicant to cover anything and everything not placed in the trust.
• Tax advantages--by distributing your assets in a way that minimizes your tax burden, or that of your beneficiaries.
There are many types of trusts, each designed to accomplish specific goals. Trusts can be great tools, but they're complex, so it's important to understand how they work and how to get started.
Question #3 – Advance Directive
If I have changed my mind about receiving life support and being an organ donor, can I change my Advance Directive easily?
Answer #3
You may revoke your Advance Directive at any time. You are completely in control of your health care directions, and if your desires change at any time, you should destroy the original and execute a new Advance Directive to reflect your wishes. You should also inform all who have a copy to return it to you to be destroyed, and let them know that you have revoked it, as your health care directions have changed, and if possible, provide them with a copy of the new Advance Directive.
Question #4 – Wills
What can a will not do?
Answer #4
A will cannot cover property held as Joint Tenants/ or Tenants by the Entireties, or property transferred to a living trust. A will cannot cover proceeds of a Life Insurance Policy, money in a pension plan, IRA, 401(k) plan, or other retirement plan. However, you may on your own change the name of the beneficiary on the forms provided by the insurance agency, financial institution, etc. A will cannot cover stocks and bonds held in beneficiary forms. Additionally, a will cannot cover money in a payable-on-death bank account, as a simple form can be obtained from your bank to change the beneficiary listed.
Question #5 - General
What is the Maryland estate tax?
Answer #5
According to the Comptroller of Maryland website - The Maryland estate tax is a transfer tax imposed on the transfer of assets from an estate. The tax rate is limited to 16 percent of the amount that the estate value exceeds $1,000,000. It is based on the maximum credit for state death taxes allowable under § 2011 of the Internal Revenue Code. It is calculated by deducting the inheritance tax paid to the Register of Wills from the allowable credit.
Question #6 – Wills
I am trying to determine whether I 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 assist me in making a decision.
Answer #6
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 #7 – General
What types of gift are generally not taxable?
Answer #7
Generally, the following gifts are not taxable gifts: gifts that are not more than the annual exclusion for the calendar year; gifts to a political organization for its use; gifts to charities; gifts to one's (US taxpayer) spouse; Tuition or medical expenses one pays directly to a medical or educational institution for someone.
Question #8 – Advance Directive
I just underwent a severe surgery and the Nurse asked if I had a Living Will ( “Advance Directive”), I said no but went home and looked it up on the internet. If I have one drafted, who do I give it to and will they listen to it?
Answer #8
You should distribute copies of your Advance Directive to your health care agent, family, doctors and/or medical facility most likely to treat you, otherwise it will be wasted time, money and words on a sheet of paper. Your Advance Directive should be in the hands of the people who need to know about it, so that your health care directions are carried out in accordance with your wishes.
If your Advance Directive is valid (signed by the appropriate amount of witnesses, and the person whom you have listed as your health care agent is not in violation of State law), then your health care agent, doctors and medical facility most likely to treat you must follow your wishes regarding your health care treatment.
Question #9 – Wills
I just joined an organization that I would like to include in my estate plan. I had my will drafted at least four years ago, in 2007. Can I do this easily?
Answer #9
You may make changes to your will whenever desired and should when your current situation changes. For instance, if you move to a new state, get married or divorced, have a baby, have step children or adopt, and if you acquire or dispose of substantial assets, you should change your will to reflect your current situation.
You may make changes by adding a codicil to your existing will or by creating an entirely new will.
Question #10 – Wills
I have multiple digital assets – facebook, twitter, linked In, gmail, Hotmail and yahoo email accounts, a Kodak picture gallery account, a Snapfish picture account and several registered domain names. I heard through some friends of mine that there are ways to include this information in my will or something like that. Can you explain this process/procedure?
Answer #10
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.
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, October 21st, 2011!
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
Monday, October 3, 2011
Next Estate Planning Q&A Forum - Friday, October 7, 2011
MVP Law Group is excited to announce the launch of our “Estate Planning Q & A Forum.” Every other Friday, we will post the 10 most frequently asked questions received during the week from our Facebook/Twitter followers and website visitors. We will answer those questions on our Estate Planning Blog.
Our next “Q & A Forum” will take place this Friday, October 7, 2011. Act now and submit your questions!
Our next “Q & A Forum” will take place this Friday, October 7, 2011. Act now and submit your questions!
Monday, September 26, 2011
MVP LAW GROUP – Estate Planning Q&A Forum, Friday, September 23rd, 2011
MVP Law Group, P.A. makes available the information and materials in this forum for informational purposes only. The information is general in nature and does not constitute legal advice or any contractual obligations. Further, the use of this site, and the sending or receipt of this information, does not create an attorney-client relationship between us. And, therefore, your communication with us through this forum will not be considered as privileged or confidential.
Question #1 – Power of Attorney
My nephew executed an advance directive directing his mother to serve as his agent. She has since taken advantage of this POA, how can my nephew revoke this POA, can he?
Answer #1
Your nephew may revoke the POA. If the POA was filed with the Clerk of Court, then he will need to draft and sign a statement revoking his POA, have it signed by two witnesses and notarized and filed with the court. He should also serve this revocation letter to his mother as notice of revocation of her power to act as Agent, and he should provide a copy of this revocation letter to his bank/financial institutions, so that no further unauthorized actions are taken.
Question #2 - Wills
Do I really need a will? I have less than 1M in assets, no children, been married but now divorced; but I own two homes and two rental properties?
Answer #2
Anyone who owns property, whether personal or real should make a will. There is absolutely no need to have a large estate to plan and prepare a will. Individuals with cash, vehicles, jewelry, furniture (personal property) should make a will to distribute their assets. Additionally, individuals owning land and/or houses (real property) should make a will.
If married, each spouse should make a will distributing their assets. Widows and single parents should also make a will to dispose of their most valuable possessions.
Question #3 – Prenuptial Agreement
I own my own business, never been married, no children, and just got engaged. I am considering a prenuptial Agreement, any advice?
Answer #3
You should consider entering into a prenuptial agreement if you have children from a previous marriage, you own significant amounts of property, have previously been married, have a salary over $100,000, or own a business and/or family business. There are four main purposes of a prenuptial agreement: to avoid costly litigation, to protect family and/or business assets, to protect against creditors, and to give you assurance that marital property will be disposed of properly. If you do not have a prenuptial, the State of Maryland will divide the assets of the marital union based on an equitable distribution, equitable does not necessarily mean “equal,” in the event of a divorce.
Question #4 – Wills
Can I just use a self-help kit to draft my will or should I hire legal counsel to take care of this?
Answer #4
There are many self-help kits on the internet that allow individuals to prepare and plan their own wills; however, certain situations may require 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. There are certain formalities that must occur when signing the will and without an attorney or real-life guidance, these formalities may not occur which can invalidate the will.
Question #5 - Wills
Do you normally include an alternate Personal Representative in your Last Wills?
Answer #5
Yes, it is our standard policy to include a provision naming a personal representative and in the event that they cannot so act or are precluded from acting for a specific reason, the provision allows you to appoint a second/alternate Personal Representative.
Question #6 – Power of Attorney
Why would I prepare a Power of Attorney?
Answer #6
A POA allows an individual who may be elderly, sick, planning to be out of state or the country, or otherwise unable to act on their own behalf to authorize another to act in their best interests in regards to their property and business transactions
Question #7 – Wills
I heard that if I do not draft a will, my property/belongings could go to the state. Is this true? How is that possible?
Answer #7
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. (Please check out our website to view the intestacy laws for the State of Maryland). 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 #8 – Advance Directive
Why would I prepare a Living Will/Advance Directive/Health Care POA?
Answer #8
You should prepare an Advance Directive because life is full of unexpected events and issues. With an Advance Directive in place, your health care directions will be carried out in the event that you are unable to communicate with your doctor, hospital, and/or loved ones. Having an Advance Directive will save your family time and money.
Question #9 – Advance Directive
If I have changed my mind about receiving life support, can I change my Advance Directive?
Answer #9
You may revoke your Advance Directive at any time. You are completely in control of your health care directions, and if your desires change at any time, you should destroy the original and execute a new Advance Directive to reflect your wishes. You should also inform all who have a copy to return it to you to be destroyed, and let them know that you have revoked it, as your health care directions have changed, and if possible, provide them with a copy of the new Advance Directive.
Question #10 – Wills
My husband and I have not updated our wills in twenty years; our children now have their own children. What is your recommendation on updating the will(s)?
Answer #10
You may make changes to your will whenever desired and should when your current situation changes. For instance, if you move to a new state, get married or divorced, have a baby, have step children or adopt, and if you acquire or dispose of substantial assets, you should change your will to reflect your current situation.
You may make changes by adding a codicil to your existing will or by creating an entirely new will. Depending upon the changes that have occurred in the last twenty years, you may want to consider creating an entire new 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, October 7th, 2011!
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
Question #1 – Power of Attorney
My nephew executed an advance directive directing his mother to serve as his agent. She has since taken advantage of this POA, how can my nephew revoke this POA, can he?
Answer #1
Your nephew may revoke the POA. If the POA was filed with the Clerk of Court, then he will need to draft and sign a statement revoking his POA, have it signed by two witnesses and notarized and filed with the court. He should also serve this revocation letter to his mother as notice of revocation of her power to act as Agent, and he should provide a copy of this revocation letter to his bank/financial institutions, so that no further unauthorized actions are taken.
Question #2 - Wills
Do I really need a will? I have less than 1M in assets, no children, been married but now divorced; but I own two homes and two rental properties?
Answer #2
Anyone who owns property, whether personal or real should make a will. There is absolutely no need to have a large estate to plan and prepare a will. Individuals with cash, vehicles, jewelry, furniture (personal property) should make a will to distribute their assets. Additionally, individuals owning land and/or houses (real property) should make a will.
If married, each spouse should make a will distributing their assets. Widows and single parents should also make a will to dispose of their most valuable possessions.
Question #3 – Prenuptial Agreement
I own my own business, never been married, no children, and just got engaged. I am considering a prenuptial Agreement, any advice?
Answer #3
You should consider entering into a prenuptial agreement if you have children from a previous marriage, you own significant amounts of property, have previously been married, have a salary over $100,000, or own a business and/or family business. There are four main purposes of a prenuptial agreement: to avoid costly litigation, to protect family and/or business assets, to protect against creditors, and to give you assurance that marital property will be disposed of properly. If you do not have a prenuptial, the State of Maryland will divide the assets of the marital union based on an equitable distribution, equitable does not necessarily mean “equal,” in the event of a divorce.
Question #4 – Wills
Can I just use a self-help kit to draft my will or should I hire legal counsel to take care of this?
Answer #4
There are many self-help kits on the internet that allow individuals to prepare and plan their own wills; however, certain situations may require 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. There are certain formalities that must occur when signing the will and without an attorney or real-life guidance, these formalities may not occur which can invalidate the will.
Question #5 - Wills
Do you normally include an alternate Personal Representative in your Last Wills?
Answer #5
Yes, it is our standard policy to include a provision naming a personal representative and in the event that they cannot so act or are precluded from acting for a specific reason, the provision allows you to appoint a second/alternate Personal Representative.
Question #6 – Power of Attorney
Why would I prepare a Power of Attorney?
Answer #6
A POA allows an individual who may be elderly, sick, planning to be out of state or the country, or otherwise unable to act on their own behalf to authorize another to act in their best interests in regards to their property and business transactions
Question #7 – Wills
I heard that if I do not draft a will, my property/belongings could go to the state. Is this true? How is that possible?
Answer #7
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. (Please check out our website to view the intestacy laws for the State of Maryland). 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 #8 – Advance Directive
Why would I prepare a Living Will/Advance Directive/Health Care POA?
Answer #8
You should prepare an Advance Directive because life is full of unexpected events and issues. With an Advance Directive in place, your health care directions will be carried out in the event that you are unable to communicate with your doctor, hospital, and/or loved ones. Having an Advance Directive will save your family time and money.
Question #9 – Advance Directive
If I have changed my mind about receiving life support, can I change my Advance Directive?
Answer #9
You may revoke your Advance Directive at any time. You are completely in control of your health care directions, and if your desires change at any time, you should destroy the original and execute a new Advance Directive to reflect your wishes. You should also inform all who have a copy to return it to you to be destroyed, and let them know that you have revoked it, as your health care directions have changed, and if possible, provide them with a copy of the new Advance Directive.
Question #10 – Wills
My husband and I have not updated our wills in twenty years; our children now have their own children. What is your recommendation on updating the will(s)?
Answer #10
You may make changes to your will whenever desired and should when your current situation changes. For instance, if you move to a new state, get married or divorced, have a baby, have step children or adopt, and if you acquire or dispose of substantial assets, you should change your will to reflect your current situation.
You may make changes by adding a codicil to your existing will or by creating an entirely new will. Depending upon the changes that have occurred in the last twenty years, you may want to consider creating an entire new 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, October 7th, 2011!
Please remember to submit your questions/comments on our Website, Facebook or Twitter.
Subscribe to:
Posts (Atom)
