A living trust is a legal document created during a person’s lifetime where a trustee manages the assets that fund said trust for the benefit of the named beneficiaries who receive the assets at the grantor’s death or at some other designated time/event per the terms of the trust.

The living trust can be revocable or irrevocable but it must be created while the grantor is alive. A living trust itself can be named as the beneficiary of certain assets such as 401(k)s, IRAs, life insurance policies and Payable-On-Death bank/investment accounts. This occurs when the grantor lists the living trust on the beneficiary designation form for any of these types of assets. When the grantor dies, the asset is then placed in the living trust.

Deciding whether or not to make the living trust the beneficiary of these types of assets depends on the goals of the trust’s grantor. Changing the beneficiary designations of these assets may not serve the intended purpose. If the trust will continue beyond the death of the grantor and is intended for on-going support and maintenance of the beneficiaries, then it makes sense to funnel these assets into the living trust for those stated purposes.

On the other hand, if the trust will dissolve upon the grantor’s death and the assets then distributed outright to beneficiaries, it may create another unnecessary layer and cause some delay in distribution.

Beware of changing the ownership of these assets (rather than the beneficiary designation) to the living trust. This could give unintended powers to the trustee over those assets. For example, if you change the ownership of a life insurance policy to the living trust, you may be giving the trustee, and any successor trustees, the authority to borrow against the cash value of the policy. Note this is not the same as making the living trust the beneficiary of the life insurance policy. That will not convey these types of powers to the trustee because the trust does not get funded with the asset until the grantor dies.

For more information on creating and funding a living trust and determining how to assign assets related to the trust, contact the experienced estate planning attorneys at Stouffer Legal at 443-470-3599.

In short, the answer is no. While unusual, a spouse has no obligation of notification to the other spouse that any type of estate plan- being the construction of a trust, drafting of a will or any health care directives have been executed.

Whether married or single a person can create a will as long as:

1. He signs the will with testamentary intent;

2. He has the mental capacity to understand what he is signing;

3. He was free from fraud, duress, undue influence and mistake; and

4. Two witnesses were present and signed the attestation clauses.

Keep in mind that while a spouse does not need to notify the other spouse that estate planning documents were created, in Maryland, a spouse cannot disinherit the other spouse. The spousal elective share law grants the surviving spouse the right to elect to take a percentage of the deceased spouse’s estate even if the will does not name that spouse as a beneficiary.

Currently in Maryland if there are surviving children, the spouse may elect to take 1/3 of the deceased spouse’s net estate. If there are no children, the surviving spouse may elect to take ½ of the net estate.

It is more common to see a spouse name an adult child as agent under a Power of Attorney, whether financial or health care, and not notify the other spouse of this decision. Sometimes, the other spouse is not of sound mind and would not be able to serve in this capacity and other times the spouse simply does not trust that the person would be able to serve if put in difficult circumstances but does not want to hurt the spouse’s feelings. They feel more confident that the adult child could handle difficult situations better than the spouse.

Estate planning attorneys are under attorney-client confidentiality requirements and must adhere to a client’s request regarding non-disclosure to a spouse. For more information on private and secure estate planning, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.

A Business Succession Plan is a living document that outlines the transition of ownership to ensure continuity of the business in the event of an owner’s death or incapacity. A buy-sell agreement is often a large component of the succession plan. A buy-sell agreement is a binding contract that controls what happens to your ownership shares when you die, retire or become incapacitated. A properly drafted agreement will specify a set purchase price formula that offers protections against volatile markets, like those resulting from a pandemic. These agreements may also offer protection for family businesses to “keep it in the family”.

Let’s look at 3 different types of buy-sell agreements:

1. Redemption Agreements: These agreements require the business entity itself to buy out the owner’s shares upon a triggering event. This does not work for sole proprietorships because there is not distinction between the owner and the company. These agreements obligate the owner (or his estate) to sell to the company.

2. Cross-Purchase Agreements: These agreements require remaining owners of the company to purchase the shares upon a triggering event. They usually buy the shares proportionately to their own ownership.

3. Hybrid Buy-Sell Agreements: These types of agreements combine some of the elements of the other types of agreements by allowing the company first right of refusal and upon its decline, it may require the remaining owners to purchase the shares.

At Stouffer Legal, we help business owners plan for the future of the business with detailed succession and continuity planning. For more information on the type of buy-sell agreement that makes sense for your business and personal situation, schedule a consultation with one of our experienced attorneys by calling 443-470-3599.

A fiduciary is a person or entity entrusted with power to act on behalf of another with that person’s best interests steering the decisions. Many types of positions involve fiduciary duties:

- Guardians

- Executors

- Agents under a Power of Attorney, and

- Trustees.

An individual becomes a fiduciary by entering into an agreement or by being appointed by a court or legal document. A fiduciary should not use assets under his/her control such as those in an estate or trust being administered for personal gain. All decisions made must consider the best interests of the owner and be free from conflict of interest and self-dealing. When the lines are unclear, it is best to seek the advice of a seasoned estate planning attorney for clarification to avoid any legal issues.

If you believe someone serving as a fiduciary has breached these duties you must be able to show:

1. A fiduciary relationship exists or existed at the time of the wrongdoing;

2. That there is a breach of that fiduciary duty such as embezzlement, commingling of assets, self-dealing, improper gifts or a loss resulting from wrongful acts or omissions; and

3. That the breach caused actual damages that can be rectified.

If you suspect a breach, an estate litigation attorney can demand a full accounting. The report must justify each and every expense. If you are serving in a fiduciary capacity and need a sounding board to determine best actions or if you suspect a fiduciary of breaching his/her duties, contact Stouffer Legal at 443-470-3599 for a consultation to determine the best course of action.

A critical component of executing your Last Will and Testament is selecting your beneficiaries. Generally, you can name anyone you want to be a beneficiary with the exception of the witnesses signing the attestation clauses to validate your will. All beneficiaries must also be living. A deceased person cannot inherit property.

You can name your spouse, children, friends, extended relatives and even caregivers or professional service providers as beneficiaries but there are a few restrictions to consider.

Spouses

In Maryland, you cannot disinherit your spouse. A spouse is entitled to an elective share of your estate.

Currently in Maryland if there are surviving children, the spouse may elect to take 1/3 of the deceased spouse’s net estate. If there are no children, the surviving spouse may elect to take ½ of the net estate.

A spouse may waive the right to an elective share in a prenuptial agreement or separation agreement.

Professional Services Providers

Another restriction to consider is that if you choose to leave an inheritance for a professional service provider such as your financial advisor, this is allowed, but may raise some red flags. If anyone chooses to contest your will this bequest will be reviewed to ensure you made it knowingly and willingly and not as the result of undue influence.

Minors

Also keep in mind that minors cannot inherit property outright. A legal guardian will need to be appointed or a trust will need to be established to safeguard the inheritance until the minor can assume ownership at the age of majority.

The beneficiaries you choose can receive all of your property, some of your property or even just one specific item. You decide how you would like your property divided and distributed.

When we draft a will or trust, we take all of these issues into consideration and make sure the language used in our estate documents leads to actualizing your ultimate estate planning goals. Contact Stouffer Legal today for a consultation at 443-470-3599.

Long term care insurance covers care when placed in a nursing home facility and depending on the terms of the specific policy, may also cover some types of in-home care. Many now wonder how the pandemic of 2020 will impact long term care insurance now and going forward.

The older you get, the more difficult it is to qualify for long term care insurance. Obviously, to make money the insurance company musts weigh out the collection of premiums against the output of benefits for care. Some insurance providers are also adding additional requirements regarding COVID19 exposure. These vary by policy and carrier but typically require a waiting period to qualify after a positive COVID19 test or risk of exposure. It may also preclude you from obtaining the best rates.

On the positive side, long term care insurance providers are becoming more flexible than before the pandemic on the issue of leaving the nursing home to pursue at-home care options. This seems to be a favorable outcome for both the insurance company and the patient as it lowers risk of COVID19 exposure.

Each policy varies on the amount allowed for in-home care and recently many caregivers have increased their pay rate to offset the risks they are taking with their own health. Some policies also place restrictions on the number of caregivers who can enter your home, and most carriers are consistent about not paying relatives as caregivers.

The bottom line is that long term care insurance is evolving with the virus just like other businesses. At Stouffer Legal, we continue to stay up-to-date with these changes and will offer you assistance in long term care planning by carefully evaluating the best options for your situation. Contact our Maryland office for more information at 443-470-3599.

Whether it is your precious pup, a thoroughbred horse or an exotic tiger, it is important to consider how your beloved pet will be cared for in the event you pass away, become incapacitated or simply can no longer provide sufficient care. We often advise clients to create a pet trust which is a legal document that offers instructions for the continuing care of your pet(s).

However, there are three common mistakes when it comes to planning for your pet’s future without you in it:

1. Invalid DIY forms. Search online and you will discover many do-it-yourself forms for pet trusts, some of them are even available at no cost. The problem with DIY estate planning forms is that they often fail to measure up to state specific legal requirements. Each state takes a different approach to pet trust requirements and if a Maryland resident chooses a DIY form not in accordance with Maryland’s laws, that may render all or a portion of the pet trust form invalid. This can lead to intended consequences regarding your pet’s care.

2. Relying on a Will. While pets are considered personal property and your will designates how personal property is distributed, the clauses contained in most wills do not address the specifics of the care needed for your pet. These clauses also fail to address how the care for your pet will be funded. Pet trusts are much more specific as to who should be providing the on-going care, successor caregivers, type of care and amount of funding for that care. Relying on a will also creates a problem for your pet because it is only triggered in the event of your death. A will does not address how your pet will be provided for in the event of incapacity.

3. Failing to Properly Fund a Pet Trust. The third common mistake with pet trusts is failing to properly fund it. It may be difficult to predict the life expectancy and on-going expenses accurately. It is best to overestimate the expenses, allocate proper funds for the pet’s care and then name a remainderman beneficiary to receive any unused portions of the funds after the pet dies. The remainderman beneficiary can be any person or charity you desire.

Call today 443-470-3599 to ensure your pet is properly cared for if you pass away or become unable to provide care contact one of the compassionate attorneys at Stouffer Legal to set up a pet trust in accordance with Maryland state laws.

A trend is emerging in wealth planning where multi-generational as well as extended family members come together for integrated family planning to ensure a united and longer lasting legacy.

Preserving wealth and developing a strategy to pass it from generation to generation can be challenging yet it helps to integrate younger generations and all relevant family members in the process. Legacy planning provides families with the opportunity to create shared long term objectives for their wealth while still considering near-term cash flow needs. This type of integrated strategic planning aligns the family’s investment strategy with long term philanthropic and legacy goals.

Families using this type of integrated approach often find they preserve more wealth, provide for more future generations and teach existing younger generations to be more financially responsible because they emphasize the need to preserve for common reasons (whatever those may be).

Integrated family wealth planning requires an exorbitant collaboration effort and effective leadership. Many family members, of all ages, must be in sync with several trusted advisors - CPAs, estate planning attorneys, insurance advisors and wealth planners. This complex process requires various perspectives, creative thinking and a team with multi-disciplinary skills.

Having and maintaining the core vision for your family legacy will allow it to evolve as needed based on changing circumstances while staying on track to provide the legacy envisioned. To get started on an integrated family wealth and estate plan, please contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.

LIVE Webinar – Click Here to Register for July 29th at 10:00 AM

How to Protect your "Stuff" in 3 Easy Steps (Estate Planning Workshop)

This webinar covers frequently asked questions and common misconceptions regarding: Wills & Trust, Asset Protection, Nursing Home Issues, Medicaid Qualification, and Estate Taxes.

Please click to register for our webinar:

LIVE Webinar – Click Here to Register for July 29th at 10:00 AM

Our webinars are designed to be educational, interactive, informative and generate relevant discussion for attendees. Modern Estate Planning is more than just preparing a will and putting it in a safe. Find out how a comprehensive Estate Plan will protect your assets and your family. Our experienced attorney, Wilson McManus, will be sharing stories on how Estate Planning is beneficial and sometimes crucial. In an Estate Plan, you need to know the Rules: Who's "Rule-book" controls your Estate Plan? Yours? The Governments? Someone else? You need to know your Predators: Who's a Threat to Your Stuff? The Government? Long-term Care Costs? Your Family? You need to know your Options: What Plans are out there? Does a Will work? What about a Trust? Which kind of Trust?

Please click to register for our webinar:

LIVE Webinar – Click Here to Register for July 29th at 10:00 AM

Our workshops fill up fast, so please call (443) 470-3599 today to RSVP.

The recent pandemic has made the issue of signing documents, especially executing a will, more difficult due to the social distancing requirements and personal safety concerns. Law firms, as well as other businesses, have been forced to rethink many procedures that relate to document signing.

Many types of estate planning documents can be signed remotely with the use of online notaries. This is typically conducted via a web call where the notary compares state issued identification to the person signing and watches as the signature is completed. The documents are then scanned and emailed.

However, this process is more problematic with executing wills. In Maryland, a will must be signed by the person making the will in the presence of two credible witnesses. The person making the will is called the testator. The testator must be at least 18 years old and have legal capacity, meaning they understand the purpose of the document they are signing.

In addition, the witnesses to the will execution are required to sign an attestation clause. An attestation clause states that the witnesses signed the will in the testator’s presence. The witnesses should also be at least 18 years old and not named as beneficiaries in the will. The problem is that an attestation clause cannot be conducted remotely and abide by the statutory requirement of being in the testator’s presence.

This issue has become unchartered legal territory because Governor Hogan authorized remote witnessing on April 10, 2020 as a response to a public health emergency. This order suspends the requirements for in person witnesses for wills, powers of attorney and advance directives.

Some clients are concerned whether a will signed and witnessed remotely in accordance with Governor Hogan’s order will later withstand any contests or other litigation. We cannot say for certain how this will later play out in Maryland’s Orphan courts. Until the first will is contested based on the issue of remote witnessing and a decision is rendered, we can only use the protection provided by the Governor’s order.

If you have concerns over social distancing and safety, yet want to execute a will or other estate planning documents right away, call our office to discuss the issue further. At Stouffer Legal, we will work to find a solution to ensure your safety without compromising the validity of your documents.