1. Why use an estate planning attorney instead of buying a form on the internet or from an office chain store?
  2. How does intestacy distribute property?
  3. Why should I create a will when the government’s intestacy process seems appropriate?
  4. How much does a will cost?
  5. How long does the entire process take?
  6. Does putting property in joint names avoid the need for wills and trusts?

 

  1. Why use an estate planning attorney instead of buying a form on the internet or from an office chain store?
  2. 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.

  3. How does intestacy distribute property?
  4. Virginia distributes property in the following manner

    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 representation.

    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 following manner

    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 intestate estate.

    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 following manner

    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.

  5. Why should I create a will when the government’s intestacy process seems appropriate?
  6. 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.

  7. How much does a will cost?
  8. 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.

  9. How long does the entire process take?
  10. 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.

  11. Does putting property in joint names avoid the need for wills and trusts?

  12. 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:

    • 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.

    However, joint tenancy is not a replacement for a well drafted estate plan and has several disadvantages:

    • 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.

 

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