Do I need a living trust?

Trusts are appropriate for many people, but not for everyone. I have prepared a sample list of situations where a revocable living trust may be warranted. More information ›

What is probate?

Probate is a process where your will is proved and the Court assures your assets are distributed according to your wishes after all your creditors are paid. More Information ›

What is unique about your firm?

Our firm is committed to providing estate planning and administration services to middle class families. These families are given value by our focus on their needs, empathy, and use of technology to keep documents current and minimize costs.

What happens if I do not have a will?

State law creates a plan to pass your assets to your heirs. The most typical scenario is to split your assets between your spouse and your children. There is a priority among persons close to you to serve as your Personal Representative or Executor. The Court will name a guardian for your children.

What is a trust?

I like to describe a trust as rules that you create to deal with certain situations such as incapacity or death. Your trustee has legal title to your assets and is charged with ensuring compliance with the rules. One rule is to name a new trustee should you become incapacitated. Another rule is how to distribute the assets upon death. The persons who receive the money are beneficiaries. The Probate Court is limited in settlement of your affairs as long as your trustee has title to your assets.

Is a trust expensive?

There are more upfront costs for trust planning as you are paying for many of the costs that could be deferred until later. Those deferred costs could be considerably larger if a guardianship is required or a will dispute arises or avoidable taxes have to be paid. Our firm helps you analyze those costs and provides you a fixed fee estimate for the cost of a trust.

My spouse just passed away. Almost everything we have is jointly owned. What do I need to do?

Your first priority is to deal with your grief. There is not a rush to make decisions and take action. The joint accounts become your accounts and are not affected by a will. A jointly owned house becomes your house. An appraisal now could save on income taxes should you decide to sell the house in the future. If your joint accounts include stocks or mutual funds, the assets are entitled to a step-up in tax basis. Each spouse is considered the owner of one half of the shares. Therefore, the half attributed to the deceased spouse is set to the fair market value at the date of death. The new tax basis should decrease capital gains taxes in the event you decide to sell the shares.

Please explain basis and why it is important?

Cost basis is the original value of an asset for tax purposes, usually the purchase price, adjusted for stock splits, dividends and return of capital distributions. This value is used to determine the capital gain, which is equal to the difference between the asset’s cost basis and the current market value. The importance of understanding basis is that tax on the gain can be avoided if the property passes upon death. When a beneficiary inherits property from a decedent, the asset receives a step-up in basis to its value on the date of death – which is both a tax perk for inheritors, and a form of tax simplification (as beneficiaries otherwise may not know what the decedent’s original cost basis was anyway).

The Maryland Estate Tax exemption is scheduled to increase to $5,000,000 in 2019. Why would my family need to consider a trust?

Creating a revocable trust to save on estate taxes is not necessary for most families today. However, trusts are effective in protecting a family’s wealth in the event of a second marriage by the surviving spouse, protecting assets from creditors after one of the spouses has passed away, and protecting a child’s inheritance from mismanagement or divorce.

My spouse and I have been conservative spenders over the years and have accumulated a moderate estate. We own our house, a brokerage account, each of us has an IRA, and are receiving social security. Can we count on Medicaid to cover the costs of a nursing home stay?

There is no easy answer to this question other than there will not be immediate qualification for the spouse going to a nursing home. If your desire is to preserve your estate, you will need to come up with a plan to deal with the probability of needing skilled nursing care in your later years. The Medicaid Rules recognize that a healthy spouse should not be impoverished by the cost of care for the spouse in the nursing home. However, there are planning and tax costs to these strategies which can limit the choice of care. Almost all dollars spent on Medical Assistance for the elderly in Maryland are for nursing home care which limits the options of in-home care and assisted living.