Estate Planning, and planning for your future, is something we all need to think about. This is true for us as well as our families. However, it is something many Maryland residents do not take the appropriate time to consider. Estate planning can seem overwhelming and confusing. You may not think you have much to plan for or you may put it off for other reasons. Proper estate planning will give you and your loved ones peace of mind knowing that things will be taken care of later in life. As there are many aspects related to a sound estate planning strategy it is a wise move to consult with a skilled and experienced estate planning lawyer serving the Elkton, Bel Air and Towson, Maryland areas.
Contact the Elkton estate planning attorneys at The Law Offices of John P. Downs to discuss your estate planning needs. With many years handling estate planning needs in Cecil County, Harford County and Baltimore County, Maryland. Mr. Downs and his associates have the experience to effectively represent you. Contact our estate planning law office today to schedule a consultation.
Estate Planning Cases We Handle
The Law Offices of John P. Downs routinely handles estate planning and estate administration cases including, but not limited to:
Power of Attorney
Durable Power of Attorney
Medical Power of Attorney
Business Succession Planning
Call the Bel Air Maryland estate planning lawyers at Mr. Downs office to explore your estate planning needs.
Estate Planning Myths
Most of don’t know a lot about the law of wills, trusts, or probate–after all, they’re topics none of us really want to deal with. But we should all know the basics, and we should know enough to recognize common myths when we run across them. Here are a few misconceptions that keep coming around.
1. If someone dies without a will, the state gets everything.
There are lots of reasons to write a will, but worrying about the state snatching your family’s inheritance is not one of them. If you die without a valid will (the legal term for this is dying “intestate”), then state law kicks in. Maryland has its own rules for who inherits what.
Generally, your spouse and children are first in line to inherit. The rules vary from state to state, however; in some states, a surviving spouse and minor children share the deceased parent’s assets. Contact our Towson estate planning attorneys to learn about Maryland laws regarding who gets what if you die with no will in place.
So do assets ever go to the state? Yes, but only when no relatives can be found. Provided your personal representative (the person in charge of wrapping up your estate) can turn up your uncle’s long-lost grandchild, the state won’t get your money. The term for this is called “escheat,” and there’s a reason you’ve probably never heard that word—escheat is very rare.
It is always a good idea to write your will, even if the state won’t get your money, you still want to decide who does. Do not leave that decision up to state law. Drafting a will is relatively simple and it doesn’t cost a lot.
2. It takes years to probate an estate.
Probate, which is defined as establishing the validity of a will, is a legal process. While it can be a long drawn out process those cases are the exception and not the rule. Most estates don’t take years and years to resolve. Usually, the only delay is the period, mandated by state law, that gives creditors time to file claims. The length of the creditors’ claim window varies from state to state; it usually starts when notice of the probate proceeding is published in the local paper and runs from three or four months on the short end to a year on the long end.
After that waiting period is over, the estate can be closed as soon as the personal representative has gathered all the assets, paid debts and taxes. As a practical matter, it usually takes a few more months to get everything in order. But most estates are finished within a year.
What makes some probate cases drag on for years, then? There are three main causes:
Family fights. If a family member challenges the will, or if siblings can’t agree about how to divide a parent’s assets, then a court may have to intervene to settle matters. That means acrimony, delay and expense.
A very large estate. If the estate is so big that it owes federal or state estate tax, things are more complicated. There’s no way the estate will be settled before the estate tax return is due, nine months after the death, and many estates receive a six-month extension for filing because the return is so complex. But, more than 99.5% of estates do NOT owe federal estate tax, and fewer than 20 states impose their own estate tax.
Ongoing income. Finally, there are the estates that we hear of in the news—those of celebrities such as Michael Jackson or Marilyn Monroe. These estates continue to receive income (millions of dollars’ worth, in some cases) for decades after the death.
Probate does not have to drag on for years, but it does drag on. Check into easy ways to avoid probate, and you’ll save you, and your family, a lot of aggravation.
3. The cost of probate will eat up all of the estate assets.
Anytime an attorney is involved in something there are horror stories out there about how their hourly billing can go through money. In terms of probate cases there are misconceptions about how much probate costs. If you believe the worst of them, you might think that your family won’t get a thing once the lawyer fees and court costs are paid. Fortunately, that’s just not true.
First of all, many estates don’t even require probate proceedings. Generally, only assets owned in the deceased person’s name along must go through probate. And if the value of those “probate assets” is small enough, the family can take advantage of probate shortcuts, which are less expensive than regular probate.
But even if the estate requires formal probate, costs likely to be less than 5% of the value of the estate. In most states, it costs several hundred dollars to file a probate case, a few hundred more to publish required legal notices, and a couple of thousand dollars to hire an attorney to handle everything. Throw in a few hundred more for miscellaneous costs like appraisals and certified copies of court documents. That’s it.
There are, however, two important exceptions. In these situations, probate costs could rise dramatically:
High attorney-fee states. In a few states, most lawyers charge a percentage of the value of the estate as their fee, instead of charging a flat fee or hourly rate. California is one of those states. There, probating a $900,000 estate would result in an attorney fee of $21,000—which is likely to be much, much more than the work justifies.
Maryland is not one of these states. According the Maryland’s Office of the Register of Wills probate fees are capped.
Litigation over the estate. If someone contests the will or accuses the executor of misconduct, costs can soar. The estate will have to hire an attorney to defend it, and if the dispute goes all the way to trial, it will cost tens of thousands of dollars.
4. I don’t have to leave anything to my spouse.
Some couples decide not to leave each other a significant amount of assets. Especially if each one owns some assets independently, they may agree that each will leave most assets to his or her children from a previous marriage, or to a charity. Many couples in second marriages, especially if they married later in life, are primarily concerned with providing for children from a previous relationship.
This can work just fine, as long as when the first spouse dies, the survivor is still happy with that arrangement. But if circumstances have changed, or the survivor simply changes his or her mind, trouble can arise. That’s because state law gives surviving spouses the right to refuse to take the assets left in the deceased spouse’s will, and instead choose to take what most states call the “elective share” of the estate. This is often called “taking against the will.”
State law may give the survivor one-third of the estate, or a year’s support, or the right to live in the family home—it varies widely from state to state. In some states, the longer the couple were married, the bigger the share the survivor can claim.
If you and your spouse don’t want to leave property to each other in your wills, go to a lawyer and discuss your plans. You’ll want to sign waivers, giving up your right to take against the will.
5. As the oldest child, I am entitled to be the executor of my parent’s estate.
Just because you were always the responsible one—or just bigger and able to push your little siblings around—doesn’t carry any weight when it comes to serving as the executor (personal representative) of a deceased parent’s estate.
If the deceased person named an executor in his or her will, the court will appoint that person unless there’s a very good reason not to. (Reasons include a felony conviction or a disability that makes it impossible to do the job.) If there isn’t a will, or the person named as executor in the will cannot or does not want to serve, then the court will appoint someone. But sibling order isn’t a factor courts take into account. Instead, the court looks to state law, which sets out a priority list for who the court should appoint. In most states, the surviving spouse (or registered domestic partner or civil union partner, in states with those options) is first in line. Then come adult children.
If more than one child wants to be executor, they can agree to act as co-executors, but that’s often a situation that can lead to family friction. It’s often better if siblings agree that one of them will serve as personal representative, and will keep the others well informed about the probate court proceeding.
If you think you should be the executor, talk to your parents about naming you in their wills. Or if you’re a parent making your will, name the child you think is most responsible and conscientious; do not name all your children. The only reason for naming all children is if you truly think it’s best for all of them to serve as co-executors.
How An Estate Planning Lawyer Can Help You
For a thorough evaluation of your inheritance, estate planning or any matter involving estate administration feel free to contact the Towson, Maryland estate planning lawyers at The Law Offices of John P.Downs.
Mr. Downs proudly serves many areas of Maryland including Baltimore County, Baltimore City, Elkton, Cecilton, Chestertown, Havre De Grace, Bel Air, Aberdeen, Towson, Ellicott City, Glen Burnie and Annapolis.