KRIS-LEIGH SEVERNA PARK

Invites you for a comprehensive

Estate Planning seminar

Presented by

SinclairProsser Law

Sponsored by the American Academy of Estate Planning Attorneys

The number of subjects encompassed under the topic of estate planning is enormous.This presentation establishes the necessary components of an effective estate plan. Several scenarios are used to portray the impact of estate planning issues relating to probate, disability due to incompetence, protection of government benefits for special needs loved ones, second marriages, unmarried couples, minimization of federal estate tax and preserving the family legacy. Wills, living trusts, powers of attorney and health care directives are all explained in the presentation, as well as long term care and Medicaid planning. At its conclusion, the audience will have a clear understanding of their estate planning options and be equipped to make educated choices for themselves and their loved ones. You won’t want to miss this seminar – it’s informative and easy-to-understand!

Wednesday, May 8, 2013

 3:00 to 4:30 p.m.

Kris-Leigh Assisted Living

831 Ritchie Highway

Severna Park, MD 21146

Seminar attendance entitles you to a Free estate planning consultation (value $300) at any of our four office locations (Annapolis, Millersville, Bowie and Waldorf). 

PLEASE RSVP by May 6 to 410-975-9919

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

I often hear the assumption that people do not need a trust unless they have $1,000,000.  This is not true.  A Revocable Living Trust is an estate plan.  The trust is a Will substitute.  Instead of having a Last Will and Testament as your estate plan, you can have a Revocable Living Trust. 

The purpose of a Revocable Living Trust is to avoid probate.  Often my clients have more than one piece of real estate, and sometimes in more than one state.  By setting up a trust, they not only avoid probate in Maryland, but also in other states where real estate is owned.  The real estate could total less than $1,000.000.

Some of my clients are setting up their trusts because they have young children or special need beneficiaries.  They want to simplify the administration when they die, so there is no time delay in distributing their estate.  They want their assets readily available to these beneficiaries.

Often I have clients who are creating a trust because they wish their estate plan to be private, or to decrease the risk of someone attempting to challenge their plan.   There is no right to inherit, and many clients do not want to leave their money equally to their children.  Have you heard the term “Will contest”?  A trust is a valid legal document upon creation which makes it more difficult to contest.

In other cases, many of my clients are setting up a trust for estate tax planning purposes.  Tax planning can be done through a Living Will and Testament, but with the trust a surviving spouse does not have to go through probate to carry out the estate tax plans. 

As you can see, there are many different reasons to set up a trust, but most often it is to avoid probate and for maximum control of your assets.  This is not to say that a Last Will and Testament is not a valid estate planning tool, however it is not always the most comprehensive estate planning choice.

SinclairProsser Law conducts seminars throughout the year that illustrate the use of a Will versus a Revocable Living Trust.  The seminar provides real life examples of how each of these estate planning tools plays out in different family scenarios.  For more information on the date, time and locations of our estate planning seminars, visit http://www.sinclairprosserlaw.com/local/estate-planning-seminars.aspx

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

  “Do You Need an Revocable Living Trust?” by Attorney Nicole Livingston

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

Should an inheritance be passed along to future generations with or without a trust?  This is a question I often consider when advising clients on their estate plans.

There are several choices families have to make when setting up an estate plan.  One is, do I leave a lump sum of money outright to the beneficiaries, or put the funds in trust with instructions for distributions to be made from the trust over time?

Often times, when a beneficiary is young, the money will be left in trust to be managed by a trustee until the child matures.  In other cases, money is put in trust to pay bills and expenses for someone who is unable to handle money responsibly.

You may want to consider setting up trusts for beneficiaries who are responsible.  The reason to do this is to save estate taxes.  The estate tax is applied whenever wealth moves from one generation to the next.  However, if the assets are placed in trust for children and their descendants, a generation of estate tax can be avoided.

A Generation Skipping Trust can be designed to give the child beneficiary a lot of access and control over the trust without the funds being included in the child’s estate to be taxed when the child dies.  Generation Skipping Trusts are also valuable to keep inheritances in the family so when the child dies, the funds in the trust will pass to the child’s children and not to someone else.

As you can see, there are many ways to ensure your estate plan is designed to effectively achieve your estate planning wishes.  A discussion with a qualified estate planning attorney is advised to investigate placing your assets in trust for the benefit of your loved ones.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

  “Generation Skipping Trusts: You are not skipping a generation; you are skipping generation of tax” by Attorney Colleen Sinclair Prosser

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

  The presentation establishes the necessary components of an effective estate plan. The seminar is presented in a case study format profiling the life of Bill and Mary Jones. Several scenarios are used to relay the impact of estate planning issues relating to probate, disability due to incompetence, protection of government benefits for special needs loved ones, second marriages, unmarried couples, minimization of federal estate tax and preserving the family legacy. Wills, living trusts, powers of attorney and health care directives are all represented in the presentation, as well as long term care and Medicaid planning. At its conclusion, the audience will have a clear understanding of their estate planning options and be equipped to make the choices needed for themselves and their loved ones. You won’t want to miss this seminar – it’s informative and easy-to-understand!TO RESERVE YOUR SEATS AND FOR DATES, TIME AND LOCATION VISIT  http://www.sinclairprosserlaw.com/local/estate-planning-seminars.aspx

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

Recently, AARP wrote an article about titling assets jointly with another person.  The article has generated well needed dialogue about the pros and cons of joint ownership.  The reason that I hear clients telling me they want to name their child as a joint owner on the accounts is to enable access to the money when they cannot.  In other words they are doing so for convenience.  Many legal issues need to be discussed with regard to joint ownership in terms of deeding, probate, gift and estate taxes, inheritance taxes, and creditor issues.

First, in some states, there is an inheritance tax when a child leaves money to a parent.  This was the crux of the article written by AARP.  A mother added her daughter to her bank accounts and then her daughter died.  An inheritance tax was due because Mom received assets from that joint account.  In Maryland, there is no inheritance tax to a parent, grandparent, child, grandchild, or brother or sister.  If all the money was originally Mom’s money and Mom dies, 100% of the value of the account is included in Mom’s estate unless it can be established that the daughter contributed money to the account.

When Mom added the daughter’s name on the account, she made a gift to her daughter.  If Mom needs to file a Medicaid application in the next five years, the adding of the daughter’s name constitutes a gift and will be subject to the gift penalty rules.  Joint ownership means that the daughter automatically receives all the money in that account when Mom dies.  The daughter does not have to go through probate.  If the daughter withdraws money from the account, the IRS considers it to be a gift from Mom.  If she withdraws more than $14,000 per year, then Mom needs to file a gift tax return with the IRS.  Even though the daughter automatically inherits the asset at death, the withdrawal of money by the daughter, which was not originally her own while Mom is alive, is considered a gift.

Another complication is if the daughter is sued, her creditors can attach the assets in the joint account even though they were not hers from conception of the account.   Because she legally can withdraw all the money from the account, her creditors have a claim against the account.

A better solution for access to the account(s) is with a Property Power of Attorney.  As of 2010, Maryland has a Statutory Form that means less hassle with using a Power of Attorney at a bank.  The statute states that as long as you sign the Statutory Form Power of Attorney, a bank cannot refuse to honor the document for reasons such as the document was signed more than five (5) years ago or the document must be on a bank’s form.

A final complication of joint accounts is that you may be disinheriting other children.  For example, if you have two children, a son and a daughter, and you write a Will leaving everything you own jointly to your children, titling of the account overrules the Will.  In other words, when you named your daughter as a joint owner of the account, you disinherited your son.  I often hear, “My daughter will give one-half of the money in the account to her brother”.  However, the daughter is not legally bound to do so.  Experience has shown that once someone has the money, many different sentiments are expressed such as: “Mom added me to the account and I took care of her before she died, so she must have wanted me to have all of the money in the account.”

Emotions can run high when a loved one passes away.   See a qualified estate planning attorney  to ensure your final wishes are carried out in a loving and peaceful manner.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

   “Joint Accounts and Taxes” by Attorney Nicole Livingston

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

   “ObamaCare at a Glance” by Attorney Paula M. Mattson-Sarli

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

Litigation is brewing over a painting of actress Farrah Fawcett by famous artist Andy Warhol.  The University of Texas, Fawcett’s alma mater, is suing Ryan O’Neal, her husband, to determine the ownership of the painting.  The painting is worth millions and is presently in Mr. O’Neal’s possession.  In her estate plan, Ms. Fawcett left all of her tangible personal property to the University of Texas which would include the painting.  However, Mr. O’Neal claims that he owns the painting and that it was given to him by Ms. Fawcett prior to her death.  A court will decide who owns the painting.

How can you prevent such disputes in the settlement of your estate?  It may not be easy.  Most wills and trusts I review have a blanket statement such as “I leave all my tangible personal property to my spouse or my children”.  However, this statement does not let your family know exactly what property you are leaving them.  You may have a lifetime of personal items and your family does not know the extent of your property.  Unlike bank accounts, real estate and vehicles, the ownership of tangible personal property is not formally documented and therefore is not easily determined.

There are steps to clear up confusion over what property is yours and what is not.  One task you may want to consider is making an inventory of your valuable personal items, including a description and the approximate value.  You don’t need to get a formal appraisal.  Just give your family an idea of the items’ value so they are aware of the true worth.  If that seems too big of a job, you can hire a service to assist you.  Making a list of your valuables serves several purposes. The list will let your family know what is valuable and what is not.  It will also let your family know what you had in your possession at the time of your death.  If something goes missing, then your family will have a record of the item.  You will need to keep the list updated to indicate you no longer own the item should you sell or give something away.  An inventory of your valuable personal items may seem like a daunting task, but it will provide an important benefit to your family when you are no longer around to tell them what you own.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.