For a limited time, Berman, Sobin, Gross, Feldman & Darby, LLP is providing free estate planning services. Many of you call us when you are injured on the job, but few realize that we have a practice group dedicated to probate and estate planning matters. By way of introducing that part of our practice and in support of MCGEO/UFCW Local 1994, we are offering free basic estate planning for members and their spouses who reside in Maryland until July 31, 2013. The basic estate planning package includes a Will, Power of Attorney, and Advance Directive. (“Basic estate planning” does not include estate tax planning, living trusts, or special needs trusts). For those of you who are not convinced they need a Will, below are three reasons why, regardless of the size of your estate, everyone should have a Will.
1. Avoid Intestacy Laws
If you never get around to getting a Will, don’t worry – the legislature will write one for you. If you die without a Will you are “intestate” and the intestacy laws of your state govern what happens to your property. In almost all situations the legislature’s idea of what should happen to your property is very different than yours.
For example, let’s look at a married couple in Maryland without a will. If the husband dies and leaves a wife with a minor child, the wife and minor child split the inheritance. Contrary to popular belief, the wife would not inherit the entire estate. This leads to some absurd results like the wife as a co-owner of the family home with the baby.
If the husband dies and leaves a wife and an adult child, again the wife would not inherit the entire estate. After a small spousal allowance, the wife would once again be splitting the inheritance with the adult child. The ultimate absurdity occurs when there are no children. After a small spousal allowance, the wife shares her inheritance with the husband’s parents!
2. Trust to Protect Children
Without a Will, your property passes directly to your heirs regardless of whether they have the ability to appropriately manage the property. Any property that passes to a minor will necessitate a costly and expensive guardianship as minors cannot own property. Even if your heirs are not minors, most people would not want their eighteen-year-old son or daughter to inherit a significant amount of cash. Instead of a college education, your child could end up with an expensive sports car!
A testamentary trust in your Will can avoid both the problem of property going to minors and property going to potentially irresponsible young adults. Instead of the property passing directly to your heirs, the property could be held in trust. A typical trust would name a trustee who would be responsible for managing the money and paying for appropriate expenses like tuition and medical expenses. The trust would end at some age, like 25, when the child would be better able to handle the property. The same technique can be used for anyone, even adults, who may need help in managing his or her inheritance.
3. Waiving Bond
The “bond” is actually an insurance policy insuring the creditors and heirs against improper acts by the personal representative. In Maryland, the court will require your personal representative – even if it is your spouse – to post a bond in order to be appointed personal representative. The personal representative will be required to apply to a bonding company that will typically require a background and credit check. The bond can be expensive if there are significant assets in the estate. There are also circumstances where the personal representative may not be able to be “bonded.” This could be because of criminal problems, bankruptcy, or just bad credit.
In a Will, you can waive the requirement for a bond. While courts in Maryland still require a “nominal bond,” the amount is significantly less, usually around $100. The nominal bond also does not require any type of background or credit check.
There is no better time than now to start protecting your family. Call David Galinis, the partner leading our estate planning practice, at 301-670-7030 so we can get started on your documents today.
Berman, Sobin, Gross, Feldman & Darby, LLP
481 N Frederick Avenue, Suite 300
Gaithersburg, MD 20877