Autumn Love: Arrangements for the Older Couple

While it may not be now on today’s top 40 list of songs, one great American standard truly resonates with older people.  The song, recorded by many, including Frank Sinatra, is called “The Second Time Around.”  The lyrics go like this: Love is lovelier the second time around Just as wonderful with both feet on the ground It’s that second time you hear your love song sung Makes you think perhaps that love, like youth, is wasted on the young Love’s more comfortable the second time you fall Like a friendly home the second time you call Who can say what brought us to this miracle we’ve found? There are those who’ll bet love comes but once, and yet I’m oh, so glad we met the second time around How wonderful!  But as is true with many things, consideration of the practical is also an important aspect of maintaining, as the song says, “this miracle.”  Older people who have acquired experience and hopefully wisdom while on life’s journey can certainly understand this. To that end, it is important for older couples to think carefully about arrangements that they may choose to make in establishing a household with another in later life.  For some, marriage is appropriate, while others may prefer a domestic partnership arrangement or a situation where each maintains his or her separate residence, sharing only in certain assets and liabilities.  There is not necessarily a perfect right or wrong answer.  A conversation with an attorney can help sort out which approach is best suited in your situation. Basic documents such as prenuptial or domestic partnership agreement can...

Maryland Estate Taxes: Changes in Annapolis

The 2018 session of the Maryland General Assembly has inspired all kinds of headlines on issues of concern to our citizens.  Among other things, we are reading about legislation to address sexual harassment, the termination of parental rights of rapists, and the way firearms are regulated – or not regulated.  Such issues usually bring out many citizens who passionately express their support of or displeasure with various legislative initiatives. While these issues have generated much attention, other bills are winding their way through the Legislature that may affect our affairs.  In the area of estate taxes, HB308 and its companion bill, SB646, may significantly affect estate planning for wealthy families.  Under current law, if a person dies in 2018, Maryland excludes estates with a value of $4 million or less from the imposition of any estate tax.  If a person dies in 2019, current law excludes from Maryland’s estate tax the imposition of an estate tax that is the same amount that can be excluded under the federal estate tax, indexed for inflation.  Until December 2018, the amount of tax that was excluded under federal law was $5 million, indexed for inflation.  However, with the recent passage of the federal Tax Cuts and Jobs Act of 2017,  the value of an estate that is exempt from federal taxes doubled this basic amount, along with an index for inflation. HB308/SB646 decouples Maryland’s estate tax from the federal estate tax.  The bill limits the amount of the exclusion from Maryland estate tax for estates with a value of up to $5 million.  Certain amendments to the bill authorize the portability of...

Contemplating Divorce: the Courage to Settle

  Settlement or Court Litigation During Your Divorce   A quick check of the dictionary indicates that the word “settle” has many meaning.  Settle can mean, among other things, to agree, covenant, compensate, reconcile, mend, compromise, reside, or verify.   As I use the word, settle or settlement means to resolve a dispute. While representing clients over the years, I have identified certain factors to consider when addressing the pros and cons of a proposed settlement.  The basic calculus boils down to resolving a dispute through negotiation with an opponent or by way of a judicial decision.  To begin, settlement does not mean capitulation.  If an opponent’s position is so rigid or fundamentally divergent from what the law would provide, resolution by court is appropriate.  That being said, the contrast between negotiating with an opponent and the uncertainty in determining a court outcome is not usually so stark.  Settlement, particularly in divorce or custody cases, is made up of many shades of gray. It is also useful to understand that a court decision is inherently limited by the boundaries of the law.  Judges are prohibited from granting relief for anything other than what is available to a party through statute or case law.  These boundaries can diminish the creativity of parties to find a solution to the problem that they really may wish to address.  Similarly, the emotional concerns of parties are rarely dealt with adequately when a dispute is resolved through a judicial decision, especially in fights that involve members of a family.  Resentments that are not dealt with because of the limitations of the litigation process can continue...

Mediation and Expectations of Privacy

Mediation is a popular dispute resolution tool.  During a typical mediation, the parties sit down with an impartial mediator who facilitates discussions between the parties with the goal of having them reach a mutually acceptable agreement.  A mediator may help identify issues and options, assist the parties and their attorneys in exploring the needs underlying their respective positions, and upon request, record points of agreement expressed and adopted by the parties.  The mediator does not recommend terms of an agreement. Parties in a dispute can always engage the services of a mediator before filing a claim in court.   Over the past twenty years, courts have also recognized the utility of mediation and have routinely made referrals to court-appointed mediators in civil cases, notably family matters, but also in relation to business disputes and probate actions.  By using mediation to facilitate settlements, courts can clear their dockets and operate in an efficient manner. While disputes may be resolved by courts, most people prefer to avoid the expense and lengthy time commitment associated with a trial.   Court records are also generally open to the public, while mediation places a premium on privacy.   Standards of conduct for a mediator, including procedures related to confidentiality, have been incorporated in Maryland law and continue to evolve. The recently reported Maryland case, Sang Ho Na v. Malinda Gillespie, gives us insight into the matter of confidentiality during a mediation procedure.  The mediation in the case involved a custody dispute between two parents.  Prior to a hearing before a court on custody, the parents attended a private and voluntary mediation.  As a part of this procedure, the...

New Tax Laws: Estate Tax Exemptions & Alimony

In the wake of the recent tax legislation signed into law by President Trump in December 2017, we are all scrambling to absorb its impact on us as individual tax payers and as business entities.  Soon enough, we will be able to determine if Will Rodgers was correct when he said, “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.” A key piece of the 2017 tax legislation relates to the exemptions associated with federal estate taxes.  Recently, federal estate, gift and generation-skipping (GST) tax exemptions were $5.6 million per U.S. domiciliary.  With the new tax law, the federal estate, gift, and GST exemptions are doubled to $11.2 million per U.S. domiciliary.  Notably, as is consistent with most of the provisions of the new law related to individuals, these exemptions “sunset” after 2025.  This means that absent a future change by Congress in this part of the tax code, the law will revert to what was in effect for 2017 with certain inflation adjustments.  In addition, those preparing estate plans must also consider estate taxes imposed by state governments, including Maryland. While it hasn’t received a great deal of attention in the general press, the 2017 tax legislation will also have a major impact in the area of family law.  For divorce decrees granted and marital separation agreements executed after December 31, 2018, alimony income will no longer be deductible to the donor of alimony nor considered as income to the recipient of alimony.  This shift in the tax treatment of alimony under the new law likely will make the negotiation...