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Recent Blog Posts
Estate Planning Lingo – What Is A Power Of Appointment?
Getting Comfortable With Powers Of Appointment.
Does your will contain power of appointment? Does it waive powers of appointment? Do you know? Can you check? A power of appointment can provide flexibility for transferring property to legatees and heirs, usually children and grandchildren. A will or trust may allow beneficiaries powers of appointment, enabling them to direct where their share of the estate or trust goes at their death
The Powers Of Powers Of Appointment.
A power of appointment grants the recipient with authority to designate the distribution of property held in an estate or trust. There are two types of powers of appointment: a general power of appointment and a limited power of appointment. .A general power of appointment is a broad power that enables the beneficiary to allocate all or part of his or her share of the estate or trust without limitation. A limited power of appointment permits the beneficiary to allocate his or her share of the estate or trust among only certain potential recipients or classes of potential recipients, such as the descendants or charitable organizations, but not to the beneficiary, the beneficiary’s estate, or creditors of the beneficiary or the estate.
Estate Planning For Your Pets As Well As Your Family
Entrusting Your Pet’s Care
Is your pet a part of your family? Pets are a great source of comfort, stress relief, and joy. Just as you want to provide for your friends and family if you are disabled or after you pass away, it is natural that you wish to do the same for your beloved pet. So, how do you go about doing it?
Unlike your human family members, your pet is considered a part of your personal property. Just like any other object you own, you can leave your pet to a friend or family member to take care of after you die, and you can gift or entrust the pet to someone during your lifetime. You can also leave a monetary bequest to your successor pet-owner, and state your intent that the funds be used to cover pet needs. However, if you are a Maryland resident who wishes to ensure that the person caring for your pet has the resources to pay for regular vet checkups, medical bills, and other related expenses, the Maryland legislature has provided a formal way to do just that. There are similar statutes in most other states, and you can check on the law in your own state.
IRS Issues Proposed Regulations Restricting The Use Of Valuation Discounts
For many family owned businesses the creation of a Family Limited Partnership (“FLP”) is a great way to achieve succession planning. When it works well, a founding member of the business can enjoy peace of mind knowing that his hard-earned business can stay within the family, with a long term plan in place to better insure its success.
However, FLPs have also been favored for their potential to provide significant estate tax savings. When used to insure that the business stayed within the family, restrictions can be placed on an individual’s ownership share within the company. Two popular methods of accomplishing this was to restrict an individual’s ability to transfer their shares (by only being able to sell their shares to other family members and/or the FLP itself) or to restrict an individual’s ability to control the business (often by restricting an individual’s ability to liquidate the company). Control and of transferability restrictions can result in an asset receiving a significant valuation discount.
Going Through MD Probate Just For A Car? Don’t Let That Happen.
I am often asked: What is the probate process and how can I avoid it? Simply put, probate is the government supervised process of transferring assets titled in an individual’s name according to the terms of that individual’s last will and testament, or if the individual didn’t have a will, pursuant to Maryland’s laws of intestacy. While Maryland’s probate process is not unduly complicated, it often takes at least nine months or more to complete. The process can sometimes bring avoidable stress and hardship to surviving family members.
One of the simplest ways to avoid the probate process is to own property jointly with another individual. Examples of this would be owning a bank account or real property with someone else, usually a family member. Jointly held property bypasses the probate process. Ownership automatically passes to the surviving owner. Another method of probate avoidance is to name a beneficiary for assets such as retirement accounts or life insurance policies.
Providing Access To Your Digital Assets: A Decision Yours To Make
Access To Digital Assets
Many of us are using online accounts to some degree: to manage finances, correspondence, or social interactions, all with the storage of their personal information. Sometimes the information is stored on our own personal devices, such as a laptop or smart phone. Other times, the information may be stored in the cloud or on the social network’s own servers. While the concept of digital assets is constantly growing as technology advances, the most common forms of digital assets are our digital photographs, emails, and social media accounts. The inability to access such records could be a huge sentimental loss for a family. For those of us who own a business, the inability to access digital access could have a severe financial impact if a trusted family member or agent cannot open or use work email or other important records in the event of the disability or death of the person holding the passwords.
What Did You Accept, When You Clicked “ACCEPT”?
Almost every online account we’ve ever opened had a terms of service contract that control the use of those services. It’s a sure bet that most of us never bother to read those boring lengthy agreements with terms of use of those online accounts, but they generally provide who has the right to access them – – and typically the terms restrict their use to just you, the person clicking the “accept” button. So if you provide someone else with your username and password, you likely are violating your contract with the service provider. On top of that, you actually could be in breach of federal and/or state privacy laws. Of primary concern however, with digital assets becoming an increasing part of your everyday life, what happens to them in the event of your incapacity or death?
Yours, Mine And Ours: When Is A Prenuptial Agreement Necessary?
The news and media are loaded with stories about messy celebrity divorces involving prenuptial agreements. While it may seem that only extremely wealthy individuals – or superstars – enter into prenuptial agreements before tying the knot, that simply is not true.
While not everyone needs a prenuptial agreement, there are certain times when it may make sense to put an agreement in place before saying “I do.”
If You And Your Marriage Partner Have Unequal Assets
When one person comes into the marriage with significant financial assets, or if one party enters the marriage with substantial debt, a prenuptial agreement may be a good idea.
During a divorce, property is divided based on what courts deem as most equitable, and they can have wide discretion when making this decision. A prenuptial agreement will lay out how property is to be divided – or preserved for one or both parties – in the event of a divorce and can avoid a party losing substantial assets or taking on substantial debts.
Move Estate Planning To The Top Of Your New Year’s Resolutions
For many people, the new year is a time to set goals for the year ahead – a list of to-dos. Consider adding estate planning to your list, as a priority item.
When To Update Your Estate Plan
A lot can happen in a year. If you have an existing estate plan, now is a great time to review your documents and determine whether any changes are needed. The following indicate life events that may require updates to your estate plan:
- Did you get married or divorced, or remarried, since your last update?
- Were you, your spouse or one of your children diagnosed with an illness or disability?
- Have you moved across state lines recently?
- Was a child or grandchild born since your last update?
- Did a loved one pass away?
- Did you experience a significant change in finances, such as retirement or receipt of an inheritance or other windfall?
- Did you purchase or sell a major asset, like a house?
- Did one of your children turn 18 years old since your last update?
What Gifts Will You Give This Holiday Season?
The holiday season is upon us. For many, that means hitting the mall the day after Thanksgiving in search of the perfect gift. An often overlooked area for gifts? Your own estate.
Think of this as "strategic gifting." Not only will you be giving a loved-one a gift, but you may also reducing the size of your estate, avoiding or minimizing estate taxes, and ensuring your wealth is transferred to the next generation.
Under federal tax laws, you can gift up to $14,000 a year to another individual without incurring any gift tax. Gifts under $14,000 also don’t count against your lifetime combined federal estate and gift tax exemption.
Want to give more? Spouses can each gift $14,000 for a total of $28,000 per recipient; gifts to your child and his or her spouse, from you and your spouse bring the exemption amount to $56,000 per year.
Have a particularly large gift in mind? Consider bunching the gift tax exemptions, by making a partial gift close to year-end and the balance right at the start of the new year.
Maryland’s Estate Tax Laws Are Changing In January; Is Your Estate Plan Still Relevant?
Maryland’s New Estate Tax Exemption
In 2014, Maryland’s estate tax exemption had been $1 million, and increased to $1.5 million in 2015. Over the next four years, this exemption amount will increase as follows:
- $2 million for individuals who pass away in 2016
- $3 million for individuals who pass away in 2017
- $4 million for individuals who pass away in 2018
- $5.9 million or so, to match the federal estate tax exemption then in effect for individuals who pass away in 2019
What Is An Estate Tax Exemption?
An estate tax exemption is the amount of money or assets that are exempt from estate taxes. When you pass away, your estate is subject to estate taxes. However, this tax applies only to estates that exceed the tax exemption. For example, in 2015, the Maryland estate tax exemption is $1.5 million. If someone dies in 2015 with a net estate of $1.6 million, that estate will only be taxed on the $100,000 that exceeds this exemption.
With offices in Bethesda, Silver Spring, and Washington D.C., The Eleff Law Group provides legal help to clients throughout the surrounding areas, including North Bethesda, Chillum, Potomac, Chevy Chase, Germantown, Takoma Park, Wheaton, Rockville, Towson, Glen Burnie, Bel Air, Montgomery County, Prince George's County, Baltimore, County, Loudoun County, and Fairfax County.
12305 Kemp Mill Road, Silver Spring, MD 20902
301-857-1990
