- Why use an estate
planning attorney instead of buying a form on the internet or
from an office chain store?
You can certainly buy a generic will
form. But, there are a number of issues that you will be confronted
with planning your estate that would benefit from a discussion
with a knowledgeable professional, qualified in the local law
requirements of your area. In addition to laws relating to wills,
trusts and probate, your situation may also involve legal aspects
of domestic relations, real estate, retirement and other financial
accounts, family business concerns, charitable donations, lifetime
gifting, and federal and local tax.
You can’t ask questions of a form or
a software program regarding an issue you might have regarding
your property. An estate attorney will be able to answer all
of your questions and you should ask lots of questions. Further,
most forms and programs have language like “This software is
not a substitute for legal advice” meaning even the program
recognizes the need for an attorney to review your estate plan.
An estate-planning lawyer can also coordinate
with your other professionals so that there are assets that
actually pass through the will or trust, as well as provisions
that carry out your intent.
Estate planning is not simply drafting
a will; it is a process to protect your loved one’s future.
It can be affected by issues arising while you are still very
much alive. Would it be a good idea to set up a living trust?
Should you add a child to your real property deed? Who should
have your power of attorney, ready in the event of incapacity
or extended travel, and how extensive should the authorization
be? Would making gifts be better than bequests for your tax
situation? Do you have the right wording in the beneficiary
designations on your paid-on-death accounts?
You can certainly take the less expensive
option by buying a will over the internet but you will have
the peace of mind and assurances that your will and estate have
been met your exact needs when you have an experienced estate
planning attorney draft your documents. In the long run, spending
a little money up front will provide for savings in the end.
- How does
intestacy distribute property?
Virginia distributes property in the following
a. If you are married and have
no children from a previous marriage all of your property goes
to your spouse.
b. If your spouse fails to survive
you, your entire estate will pass to your children (or to the
descendants of any deceased children) based on a per capita
c. If you are unmarried and have no children, your
estate passes to your parents.
d. In the absence of living parents, your property would
pass to your siblings (or descendants of deceased ones).
e. Finally, if you have no siblings, nieces or nephews
or other descendants of siblings, one-half of your estate will
pass to your nearest maternal relatives and one-half of your
estate will pass to your closest paternal relatives, divided
in shares that are specified by state law.
Washington distributes property in the
Surviving spouse. A surviving
spouse is generally first in line to get any assets from the intestate
estate. However, the amount a surviving spouse is entitled to
vary as follows:
a. If there is no child, parent, grandchild, brother,
or sister, or the child of a brother or sister of decedent,
the surviving spouse is entitled to the whole intestate estate.
b. If the decedent's surviving descendants (i.e. a child
of the deceased) are also descendants of the surviving spouse
(i.e. the spouse is the mother/father of the child) and there
is no other descendant of the surviving spouse who survives
the decedent (e.g., child from another marriage), the surviving
spouse gets two-thirds of the balance of the intestate estate.
c. If there are no surviving descendants of the decedent,
but there is a surviving parent of the decedent (i.e. mother
or father of the deceased), the surviving spouse is entitled
to three-fourths of the intestate estate balance.
d. If all of the decedent's surviving descendants are
also descendants of the surviving spouse and the surviving spouse
has one or more surviving descendants who are not descendants
of the decedent (e.g. surviving spouse has a child with another
man), the surviving spouse gets one-half of the balance of the
e. If one or more of the decedent's surviving descendants
are not descendants of the surviving spouse (e.g., a child from
another marriage), the surviving spouse gets one-half of the
balance of the intestate estate.
Heirs other than surviving spouse
Any part of the intestate estate not passing to the surviving
spouse as indicated above, or the entire intestate estate if there
is no surviving spouse, passes in the following order:
a. Decedent's surviving children and grandchildren (if
their parents predeceased decedent).
b. Decedent's parent or parents equally.
c. Decedent's siblings or their descendants.
d. Decedent's collateral relations (i.e., those not
in a direct line of descent from decedent).
e. Decedent's grandparents.
Escheat to the District of Columbia
If there is no surviving spouse or relations of the decedent
within the fifth degree (reckoned by counting down from the common
ancestor to the more remote), the surplus of real and personal
property escheats (passes) to the District of Columbia to be used
by the mayor for the benefit of the poor.
Maryland distributes property in the
Share of Surviving Spouse A surviving spouse is generally
first in line to get any assets from the intestate estate. However,
the amount a surviving spouse is entitled to vary as follows:
a. If there is a minor surviving child then, surviving
spouse gets 1/2 of estate
b. If there is no minor surviving child but surviving
issue then surviving spouse receives the first $15,000 plus
one-half of the remaining estate
c. If there is no surviving issue but a surviving parent,
then the surviving spouse receives the first $15,000 plus one-half
the remaining estate
d. If there is no surviving issue or surviving parent,
then the surviving spouse takes the entire estate.
If there is no survivig issue.If there is no surviving
issue of the decendent then the estate will be distributed to
the surviving parent or surviving parents of the decedent. If
neither parents survives then the estate will be distributed to
the issue of the parents e.gdecedent's brotheres and
sisters. If there is no surviving parent or issue of parent then
the estate would be distributed at the grandparent and their issue
level. If there were no survivor or issue at the decedent's grandparents
level, priority would reside at the great-grandparent and issue
level and would be distributed therein.
- Why should I create a will when the government’s
intestacy process seems appropriate?
By not drafting a will, you put the choices
of who to dispense of your property in the court’s hands and not
yours. As shown in question 2, an estate for a person that dies
intestate follows a set order in dispensing your property and
ignores your unique situation. By drafting a will, you can select
who receives your assets and how and when they will be distributed,
not the court. You can elect who administers the distribution
of your assets. You minimize the costs for your executor and your
family by investing and planning properly prior to decedent’s
death. You, not a judge, will choose the guardian you desire for
your children. You can even split the financial burdens of being
a guardian from the custodial duties. You can make many details
of administrating your estate for your heirs and your executor.
You can decide which heirs need their property protected by a
trustee or custodian, for how long, and you can decide who will
be the trustee or custodian, and specify other details as necessary.
Not taking those steps means a court will make those decisions
for your property.
- How much does a will cost?
There is no such thing as a “simple will.”
Each person’s assets and property have different levels of sophistication.
Certainly there are situations that are much more straightforward
than others or need little tax planning but others may require
higher levels of planning to meet your objectives. And, there
might be additional instruments that might need to be drafted
beyond a will. Unless you already have reasonably current and
locally applicable documents for basic lifetime-care issues, such
as a comprehensive power of attorney and a medical directive,
I ordinarily will not advise you to just prepare a will because
I think it would be irresponsible.
I generally charge a fixed fee for estate
planning that varies depending on the complexity of the estate.
This allows a client to know ahead of time what they will have
to pay and feel comfortable asking all of their questions. The
fee includes consultations, advice, working with the client's
other advisors, document preparation and execution, and any needed
follow-ups. This fixed fee generally does not include reimbursements
for any actual out-of-pocket expenses, such as long-distance calls,
special delivery and filing fees, and the (nominal) out-sourced
cost of changing real estate titles. But those costs are minimal
and I can give you a rough range of those costs. Later updates
typically are charged on an hourly basis.
I have an established process that I go
through when meeting with a client to plan their estate. It generally
includes a short “get to know you” meeting so that we both feel
comfortable in moving forward with the process. It is a simple
meeting on the process. If you feel comfortable with the process
there will be a more in-depth meeting to gather information and
provide some preliminary recommendations. At the conclusion of
the meeting, having a reasonably good idea of what is involved,
I set my proposed fee, confirmed later by an engagement letter
sent to the prospective client for a decision.
- How long does the entire process take?
Depending on my schedule, I usually book
initial appointments a couple of weeks in advance. I generally
try to be very flexible and can meet after work or on the weekends
to accommodate your schedule. Then, after receiving the signed
engagement letter after our in-depth meeting there often will
be additional consultants to work through the major points. After
this meeting a drafts are prepared, discussed and revised as needed,
related documents prepared, follow-up tasks identified, and the
signing date arranged. Generally, there will be an additional
meeting to full explain how your estate planning document work
in relation to each other and any necessary changes are made to
the drafts based on this meeting. Assuming reasonably prompt responses,
the process still takes approximately six weeks to eight weeks.
If there is a desired deadline, such as a travel date or unexpected
medical procedure, I will try to accommodate it.
Sometimes, situations arise when there
is a need to prepare documents immediately, usually because someone
is going into surgery or has some other emergency. I ordinarily
try to be accommodative to meet your needs but I will advise that
it might not be possible to prepare adequately, and I might decline
the representation because I don't want to be criticized later
by the client or the family for pulling something together without
learning facts that would have changed my advice or drafting.
- Does putting property in joint names
avoid the need for wills and trusts?
Joint tenancy with the right of survivorship
is a type of ownership of property. It is usually made between a
husband and wife but other people regularly form this type of ownership
relationship. It is typically designated on forms of the property
as “JTWROS.” Joint tenancy has a number of advantages:
However, joint tenancy is not a replacement
for a well drafted estate plan and has several disadvantages:
• The property automatically passes to the survivor, without
having to go through probate. (The survivor does need to get
the title changed.)
• In the case of a bank account, the joint owner can use funds
for the other's medical expenses and other costs.
• Using a joint tenancy is "free," done by the bank or broker,
and the real estate company if you start out with that title.
• Adding someone's name to your property creates an immediate
gift for real estate and stock bond certificates. If the value
is more than $13,000 – for 2009 - you have to file a gift tax
return, and you may use up your available tax-free gift exemption
or even owe a gift tax. Nevertheless, the gift amount comes
back into your estate for estate-tax calculation purposes.
• Unless the recipient of the joint tenancy agrees, you can't
undo the gift for real estate, stocks or bonds.
• Any gifted property keeps the giver's original value at purchase.
Thus, if you add a child’s name to your house deed, upon a later
sale the child is facing a huge capital gain. If your child
had inherited the property and then sold it, there would be
little or no capital gain based on stepped-up basis under Internal
Revenue Code § 1014(a).
• The joint tenant has complete access to the funds. Thus,
a joint tenant can spend them, empty the account and have no
assets left to sue against, or use the property interest as
collateral. Creditors of the joint tenants may be able to make
claims on the property.
• If a parents adds one of several children to an account,
to help pay bills or for other convenience, it can cause resentment
among the others. This is especially true if the child becoming
the joint tenant decides not to “gift” shares of the account
to the others that are not joint tenants. There are steps that
can be taken to rectify the situation over a joint tenant relationship.
• If a parent adds all of the children as joint tenants on
the property and if one of the children predeceases, the predeceasing
children’s will inherit nothing -- the other joint owners will
divide up the sibling's share.
If you have any questions on estate planning or general business matters please contact us.