WILLS & ESTATE PLANNING
I work in the following areas wills, trusts, and estate planning:
Caveats (contesting a will)
Codicils (changing or updating your will)
Durable power of attorney (for healthcare during illness)
Healthcare advance directives ("living wills")
Mediation of estate-related issues
Non-U.S. citizens and permanent residents: QDOT trusts & more
Powers of attorney (for health care, financial matters, etc.)
Special needs trusts
Revocable and irrevocable trusts
Getting the Job Done
Most clients do not relish the thought of having their wills written, attending to estate planning, making health-care choices should they wind up in a "persistent vegetative state", or otherwise planning for an orderly transition after they pass away. In fact, most people postpone the task as long as possible. Often they wait until just before they leave for a long trip, or until after an illness that makes them realize that their failure to get their wills and estate in order may jeopardize the well-being of those who are left after they pass away.
I will be happy to help you with your wills, trusts, and estate planning, and assist you in getting all your documents in order. My job is to make our discussions as personalized and painless as possible. I listen to your needs and wishes, discuss your various choices and the ramifications of such choices, and offer alternative solutions where that is possible. This process includes making sure you have made any necessary changes to your beneficiary forms for your insurance, IRAs, 401k's, etc., to achieve your estate-related goals.
Working with or without a financial advisor
Often clients contact me after they have seen a financial advisor, accountant, or professional estate planner, and ask me to write the documents they have been advised to execute. Just as frequently, clients tell me, “My case is very simple”, or “I know exactly what I want”. Whether using a financial planner or coming up with one’s own estate planning ideas, the client is not always aware of the full picture: the financial planner may not have explained all the personal ramifications of a recommended estate plan, and, similarly, the client who initially feels s/he has constructed a satisfactory plan on the personal level may not have been aware of all the financial/tax ramifications of that plan.
I am happy to work with a financial advisor, and happy to do as the client says, but I take the time to go one step beyond: I inquire what the client wants to achieve, and why, and usually come up with creative solutions or alternatives to achieve clients’ goals.
Ascertaining your goals
Saving inheritance or estate taxes is often the main goal -- but not always. For example, someone I will call Veronica asked me to place all of her extensive farmland holdings into a trust that would spring into life immediately upon her death, with income to be paid to her husband (if he outlived her). Control of the land would vest in another person. The ostensible goal was to diminish the amount of her “estate” (everything she owned at death) so that the value of the farmland would not cause her estate to be overburdened with taxes. Since, in our free-ranging discussion, she had told me how much she loves her husband, I asked whether she realized that creating such a trust would leave her husband with no say-so whatsoever regarding the land. She realized how much that would hurt her husband, told me to disregard the tax consequences – admittedly an unusual attitude – and make sure her husband inherited the farmland outright.
Finding creative, alternative solutions
Another client, whom I shall call Klara, asked me to cut one of her three adult children out of her will. Klara explained that she had not spoken to that son in years due to his mental and emotional instability, and had no desire to leave him anything at all. At the end of a long discussion, during which it was clear to me that she still loved that son dearly, I suggested that Klara have me set up a trust for him. With her input, I wrote closely-tailored instructions for the trustee to make payments to that son based on the progress in his lifestyle and other considerations.
Issues relating to non-U.S. citizens, including G-4 visa holders
Many particular issues arise regarding non-U.S. citizens. It is therefore important for your lawyer to know what an American will, written here, can and cannot achieve if and when the client returns to his/her home country.
For example, in Germany, as in many other countries, the testator (the person writing the will) is not allowed to disinherit a child. Each child must get his or her so-called “Pflichtteil” (forced or mandatory share), and any testamentary provisions to the contrary will not be given effect. A client absolutely determined to leave as little as possible to a child in those countries might consider divesting him/herself of as much property as possible while still alive.
In Norway, regardless of what a will written in the United States provides, the surviving spouse and the children are entitled to their forced shares. This sometimes means that the spouse must pay the children out in order to stay in the family home. When there are no liquid funds to make such payment, or for other, non-monetary reasons, the best solution may be for the surviving spouse to “sitte i uskiftet bo” (to delay probate and the closing of the estate indefinitely), subject to certain conditions – a concept we do not have in this country. Knowing that this would happen when the client moved back to Norway, we were able to plan the rest of the transfer of the client’s estate accordingly.
In most countries, virtually anything to do with the transfer of land – as opposed to movable property or monetary assets -- will be governed by that country’s laws, regardless of the propriety of the will under American law. In such cases, I inquire into the foreign law – my clients often have a clear knowledge of that law – and plan for the asset distribution accordingly. When the will is probated abroad, the land in the foreign country will be transferred according to the local (foreign) law, and in most cases the other provisions of the American will are honored.
Trusts come in many different forms, and are an important part of estate planning whether the client is a U.S. citizen or not. Some foreign countries do not have the concept of trusts at all, however, and in those cases my mandate is to design other methods to achieve the same goal. Married couples, of which one or both spouses are non-U.S. citizens (regardless of residency in the United States), should take particular care to make sure their wills contain a so-called “QDOT” – a qualified domestic trust. The QDOT enables the estate to be taxed at the same rate and manner as married American-citizen couples are subject to, including the availability of the marital deduction. Without such planning, a non-U.S. citizen surviving spouse will be taxed at the rate for foreigners: just under 50%.
I will be happy to help you with your wills, trusts, and estate planning, and assist you in getting all your documents in order – including making sure you have made any necessary changes to your beneficiary forms for your insurance, IRA’s, 401k’s, etc., to achieve your estate-related goals.
When should you change your will?
Ideally, you should review your will once a year, and at the least every few years, to make certain it still reflects your wishes. In addition, whenever there are major changes in your life and/or in your financial situation, you should make sure your will reflects what may be your new wishes for distribution after you pass away. Questions you should ask yourself include:
Do I still own the same assets as I did when I wrote my original will?
If your assets have changed significantly -- for example, if you have sold a major asset such as a house or boat, or started up a business, or inherited or even lost a significant amount of money -- you will probably want to change your will to reflect the new reality. If you don't, your executor (called "Personal Representative", or "PR", in Maryland) will have to make guesses as to your intention and spend a lot of time, and money, asking the court for permission to distribute your assets in a way the PR deems fair.
Has a beneficiary (anyone who "takes" under the will) passed away since you last wrote your will? Would you like to add people to your will? Have you decided not to give someone, or a particular entity such as a charity, the assets you had originally thought a good idea?
If your original will specified particular persons or entities to whom you wish to give your various assets, and if those persons have passed away, you should revisit your will and make the necessary changes.
Has anyone who has a role to play under your will passed away, moved away, become incompetent, or is otherwise unfit to carry out the role in question?
In your will, trusts, or powers of attorney (health-care or financial), you have surely named several people to carry out important functions. Those functions include that of executor (Personal Representative) and alternates, or personal guardian for your minor children or manager of their property and their alternates, etc. If any of the persons named to carry out any of these roles has died, fallen gravely ill, become mentally incompetent, moved out of state, or is otherwise unwilling or unable to carry out the duties set forth in your will and related documents, it is time to redo your will.
If you have gotten married or divorced, or remarried, or entered into a civil partnership, your will should be reviewed.
If your marital status has changed, your new will should reflect that fact. Moreover, if you make a designation in your will to "my wife", or "my husband", or "my partner" without naming that person, you may unwittingly be sowing the seeds for a post-mortem (your mortem) court battle. A former spouse(s) or partner may decide to contest your will through a process called a "caveat", claiming that s/he was the wife/husband you meant.
If there are new children or grandchildren in the picture, you may or may not have to have your will re-written. The answer is, "It depends."
If you have children, biological or adopted, or intend to have children, you should review your will to make sure it reflects your present wishes and will adequately protect any new arrivals.
Note that in Maryland, adopted children are considered to be the same as biological children for purposes of carrying out a testator's wishes. ("Testator" is the person writing the will.)
In the vast majority of cases, testators will wish to provide for all of their children, and for the children's children. When writing your will, it is important to think through various scenarios, and to try to provide for those who will be left behind after you pass away. If you allot a certain amount of money, or specific assets, to your children (it would be phrased "my children" in your will), what if one of your children dies before you do? If you only say "my children", then only the children living when you die will inherit under your will. If the deceased child has children, then the grandchild/ren of the deceased child will inherit nothing at all.
Per stirpes: Out of the stirrups, out of the loins.
How do you forestall this outcome? The answer is to add the rather graphic phrase "per stirpes" thus: "To my children, per stirpes", I give...." The literal translation of per stirpes is "out of the stirrups of", or "out of the loins of". The effect of using these words is to provide for the children or descendants of each of your children, regardless of whether or not all of your children are still alive after your own death.
For example, let us say that you had three children, and each of your three children has three children. Suppose, further, that when you wrote your will, all of your children and grandchildren were alive, and you bequeathed one-third of your assets "to each of my children", or stated in your will "I hereby bequeath Asset X to my children, share and share alike". If all three of your children are alive when you die, each of your children will receive one-third of Asset X. When your children die, their children -- that is, your grandchildren -- will, in turn, receive whatever their parents (that is, your children) bequeath them.
But what if one of your three children has predeceased you? Would you want the two of your three children who are still living at the time of your death to "share and share alike"? That would mean that the children of your deceased child will get nothing. Very few parents would prefer that outcome, but, unfortunately, that is what would happen if you fail to use those two vital words, "per stirpes".
Now let us use the same hypothetical situation where you had three children, but one of them has predeceased you. Presume that you have received proper legal advice and wish to provide for all your children and their progeny, and not have anyone disinherited. The wording to provide for this eventually will be: "I hereby bequeath Asset X to my children, per stirpes, share and share alike. In this scenario, the two of your children still alive at the time of your death will each get one-third of Asset X, and the three children of your deceased child will each get one-third of the deceased child's one-third share, that is, one-ninth of Asset X.
Note: If your children or grandchildren are minors (under the age of 18 in Maryland Virginia, and Washington, DC) at the time of your death, they cannot take control of the assets your bequeathed them. With proper legal advice, you will have appointed a financial guardian or conservator in your will; if not, the court will appoint such a person.
Have you moved to a different state?
If you have moved to a different state, it would be wise to make sure your will conforms to the laws of that state. Testamentary laws can vary considerably from state to state -- for example, the number of witnesses required to make the will valid, or to make the will "self-proving". The latter means that the witnesses to the signing of your original will won't have to be contacted or found in order for the will to be deemed valid.
Your "probate estate" vs. your "non-probate estate"
The process inevitably requires that you list all your assets and divide them into two categories: those that will be part of your "probate estate" and those that compromise your "non-probate estate". Your "probate estate" consists of everything you own or have an interest in that does not automatically pass to another person or entity by operation of law.
Examples of non-probate assets are a jointly-owned house, or car, or bank account. Additionally, beneficiary designations (e.g., a pension, a bank account, an IRA), will take precedence over the terms of a will. The same holds true for insurance policies with a designated beneficiary. (Note: Only the person listed as the "Owner" of an insurance policy can change the beneficiary. Check back to my website periodically for more information about insurance and other matters.)
For example, if you are married, live in Maryland, and own a house with your spouse, you probably own that house as "tenants by the entireties". Those words will actually appear toward the top of your deed. They mean that you and your spouse own your home jointly, which in turn signifies that after one of you dies, the surviving spouse automatically acquires full ownership of the house -- without having to probate the house. The house thus is thus part of your "non-probate estate". (You will, of course, have to have the house re-recorded in your county's property records to show that you now own the house by yourself, and not jointly with your spouse. This is a relatively simple administrative matter.)
Once you have an overview of your assets, you will need to find the documents proving ownership and your best estimate of the value of those assets.