#TuesdayTips: DIY Estate Documents Gone Wrong

Estate planning can be a very complicated area of the law.  Before going online to print off your documents, ask yourself, if I needed open heart surgery, would I go to WebMD to get the “how-to” instructions?  Not likely, so why go online to get the how-to instructions to complete your own estate documents? 

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Did you create your own documents?

Why pay a lawyer when I can get my estate documents online for free (or at least at a lesser cost than a lawyer)?  Every estate planning attorney has fielded that question at some point or another.  My response is usually: “I love online documents…because it usually means I’ll have more work that makes more money in the future.”  After I say that, I typically get a grin across the client’s face and then they ask “why”?

Using online documents to accomplish your estate planning goals is not generally a good idea and in many cases can lead to severe consequences.  Have you ever heard the saying, “you get what you pay for”?  When you get your documents online, you don’t have the opportunity to talk to an attorney, to ask questions about your specific situation unique to only you or your family, and your documents will not be tailored to your specific circumstances.

Prior to your documents being drafted, you meet with an attorney to discuss your estate planning goals and objectives at the consultation.  My estate planning consultations usually last at least an hour if not an hour and a half.  During the consultation, we review your health status, family status and financial status all before we even mention the words “will” or “power of attorney” or “trust.”  You also have the opportunity to ask questions and receive specific answers related to your situation.  When you get your documents online, they are almost  never tailored to your specific situation.

What happens if you are a blended family?  I can almost guarantee you that the basic online Will does not address how to provide for your spouse and your biological children if you were to die first.  Many estate litigation cases arise from blended family situations where the surviving step parent does a new will after the spouse dies cutting out the spouse’s biological children from any inheritance.

What about your million-dollar IRA?  Who does that go to?  Many clients think the Will directs who gets that money.  WRONG!!  If you have beneficiaries on that IRA, then the beneficiaries listed on the IRA account receive the money and the beneficiaries named in the Will get none of it!  So many people believe the Will controls everything, and unfortunately, if you get your documents online, you will not be educated on what happens to each asset that comprises your estate.

What if you own property in multiple states?  Chances are you were not advised by the online website that you will have to likely do probate in each state you own property.  To avoid this common situation, often times estate planning attorneys will employ trusts so that ownership of those properties are consolidated into the Trust.  That way, upon the death of the owner, the Trustee can sell the properties and does not have to go through the probate/ancillary probate process in each state the Decedent owned property.

Estate planning can be a very complicated area of the law.  Before going online to print off your documents, ask yourself, if I needed open heart surgery, would I go to WebMD to get the “how-to” instructions?  Not likely, so why go online to get the how-to instructions to complete your own estate documents?  Instead, call ERA Law Group, LLC at (410) 919-1790 today!

#TuesdayTips: The “Simple” Will

All too often will-seeking clients call the firm asking if we do “simple” wills, say they need a will, but don’t want one of those “long wills”, or claim to not have anything, so they just need a “basic” will.  On this week’s #TuesdayTips article, ERA Law Group, LLC discusses how having a properly drafted will can mitigate many of these foreseen and unforeseen problems.

All too often will-seeking clients call the firm asking if we do “simple” wills, say they need a will, but don’t want one of those “long wills”, or claim to not have anything, so they just need a “basic” will.   Most law firms will respond to the client, “Yes! We can do that!”  But there are pitfalls that can arise, some foreseen and some unforeseen, when a person only has a “simple” will, and the client does not even know these potential pitfalls exist.  On this week’s #TuesdayTips article, ERA Law Group, LLC discusses how having a properly drafted will can mitigate many of these foreseen and unforeseen problems.

Two common scenarios arise when people have a “simple” will that case issues: (1) Age issues, and (2) Disability issues.  The first scenario, age, has two parts: (a) what happens if someone who is under eighteen (18) years old is set to inherit money or property from the decedent; and (2) what if someone who is over eighteen (18) years old is set to inherit money or property, but is irresponsible to handle a substantial inheritance?

In Maryland, a person under eighteen cannot inherit money or property and hold legal title to that property in their own name.  Someone else over eighteen must hold title to that property, for the minor’s benefit, until the minor attains eighteen years old.  Often times, though, the Testator or Testatrix (man/woman who creates the will) might not think that a person at eighteen is mature enough to handle inheriting money or property; therefore, in a properly drafted under-stated age trust (a.k.a. a minor’s trust) set up in a will, he/she can set the minimum age to inherit to an age he/she feels is more appropriate.  Often, a Testator or Testatrix will choose somewhere between age 23 and 25 because the person inheriting has completed college, grad school, a trade school and/or has been working for a reasonable amount of time and a can hopefully manage an inheritance of money, property or both.  Therefore, it is advantageous for your will to contain an under-stated age subtrust that directs how a minor’s or individual’s inheritance who is under a stated age will be held and managed.  Last, this subtrust can avoid the requirement of court intervention if a minor is set to receive an inheritance and no provisions are made outlining how to handle a minor receiving an inheritance.

The next scenario is: what happens if a person who is incompetent or disabled is set to receive an inheritance?  It is possible that when a person dies, he or she has designated an individual who is incompetent or disabled to receive all or a portion of their estate.  If that happens, it can have dire consequences for the beneficiary.  For example, what happens if the child of a decedent has a severe cognitive disability (i.e., severe autism or severe Downs Syndrome) and is receiving SSI and Medicaid because he is unable to work. If the parent does not do proper planning, that disabled child may inherit a substantial sum of money causing that child to lose his SSI and Medicaid benefits.

Or this other scenario: a husband is in a nursing home on Medicaid because of severe dementia, but the wife still living in the community suffers a massive heart attack and dies.  Now the husband in the nursing home may be designated in the wife’s will to receive all of her estate.  Now the husband in the nursing facility might lose his Medicaid benefits because he now inherited a house that needs to be sold.  Remember, the husband has severe dementia, cannot sell the house himself, and does not have a power of attorney.  Now a guardianship issue has presented itself in addition to him losing his Medicaid benefits because he now has excess assets.

All of the problems caused in scenario two can be avoided if the decedent’s will has a properly drafted Incompetent or Disabled Beneficiary Trust.

At ERA Law Group, LLC, we advise our clients of these potential pitfalls, even when the client wants to do “basic” planning.  Unfortunately, if not properly counseled, “basic” planning can cause very complex issues later after someone dies.  At that point, it may be too late to cure the issues.  That is why ERA’s “basic” or “simple” will includes both of these subtrusts…we don’t want our clients to be left stranded if these difficult and “unforeseen” scenarios come up later.  Call us today at (410) 919-1790!

#FamilyFriday – Can I Get Alimony?

When there’s a large disparity in income, assets, debts, etc. some spouses fear life without the financial contribution from their spouse and ask if they would be entitled to alimony.  The answer is maybe.

Spouses take on various financial roles in a marriage.  Some stay home, some work part-time while the other is the breadwinner, and some play equal roles.  When there’s a large disparity in income, assets, debts, etc. some spouses fear life without the financial contribution from their spouse and ask if they would be entitled to alimony.  The answer is maybe.  This week’s #FamilyFriday article breaks down the road to obtaining alimony.

In Maryland, the Court has a number of factors it must consider when determining an alimony award.  Some of these factors include each parties ability to be self-supporting, a party’s ability to obtain suitable employment, length of marriage, standard of living, the age of each party, any agreements between the parties and the health of the parties.  Some factors play bigger roles in the Court’s decision-making process than others.  For example, a spouse married for 30 years, in their 60s, and  having been a stay at home parent may be in a greater position of obtaining alimony than a marriage less than 5 years with both spouses making equal salaries.

After analyzing the various factors the Court can: (a) decline to award alimony, (b) award temporary alimony, or (c) award permanent/indefinite alimony.  When presenting your case for an alimony award, your attorney should strongly advocate those factors which play an important role in your case.  Your attorney should place emphasis on the length of marriage, the disparity in income, the likelihood of the less economically stable spouse to become more economically stable, the need for additional education, and, if applicable, highlight the circumstances surrounding the divorce.  A party who has physically and emotionally abused their spouse who is seeking alimony would play a far great role in the Court’s decision making than the couple who is seeking a divorce based on a voluntary separation.

In the event you and your spouse can reach an agreement about alimony, you should also consider some potential alternatives.  The alimony paying spouse may not want to have a monthly payment but may be willing to make a one-time large sum payment.  For example, perhaps the alimony paying spouse would rather offer you their share of the equity in the home than pay you alimony each month for the next 5 years.  When reaching an agreement you should speak with an attorney to be sure you don’t, or understand the consequences if you do, waive alimony.

Divorce is an emotional roller coaster.  You may not know what questions to ask, what rights you have, and what you may be entitled to but the attorneys at ERA Law Group, LLC today can help!