Lifson Law: Blog

The Big Book: Organize Your Estate Planning

In case you missed it, an article in the business section of the Washington Post discussed a topic that I have been concerned about for years, the creation of “The Big Book.”  As explained by Reporter Thomas Heath in his May 18 article, the rich have what can amount to an army of professionals to track information on their financial lives. For the rest of us, “The Big Book” is a way to keep ourselves well informed about our assets, liabilities, basic documents, and other important bits and pieces that make up our daily lives in a complex digital world, including passwords to various accounts.   Having “The Big Book” in hand promotes independence and self-sufficiency. Being organized is the basis of good financial and estate planning.   Among items to be considered for inclusion in “The Big Book” are important documents such as copies of passports, work IDs, marriage licenses, birth certificate and Social Security cards, along with digital sign-ons and passwords. Heath also recommends to include documentation related to real estate, automobiles, bank accounts and investments and retirement accounts, insurance policies, and lists of health care providers, medications and emergency contacts.  While copies of estate planning documents such as wills, trusts, power of attorney, and advance health care directives are a part of The Big Book, to avoid difficulties, it is wise to keep originals of certain estate planning documents – notably wills and trusts – in a separate space.  While we live in a digital age, maintaining the originals of certain key documents remains important.   While compiling The Big Book may initially seem daunting, when this...

Mutual Consent Ground for Divorce Expands

General Assembly Expands Mutual Consent for Divorce Effective October 1, 2018, mutual consent as a ground for an absolute divorce will significantly expand.  Currently, for divorcing couples who do not have minor children and who can come to agreement in writing about property and alimony issues, there is no need to separate and wait one year before filing for an absolute (final) divorce based on the ground of mutual consent.  Such couples will also be required to refrain from filing a pleading to set aside their settlement agreement prior to the divorce hearing and must both appear before the court at the absolute divorce hearing.   The new law expands the ground of mutual consent procedurally and substantively.  Procedurally, only one party needs to appear at the court hearing on the absolute divorce.  Substantively, the new law allows parties with minor children in common to use the ground of mutual consent if they resolve all issues related to the care, custody and support of their minor children with a written agreement.  The parties must attach a completed child support guidelines worksheet and satisfy the court that any terms of their agreement related to their minor or dependent children are in the best interest of these children. Of course, spouses with minor children must also resolve all matters pertaining to property and alimony in the form of a written agreement to use the ground of mutual consent.   Interestingly, Governor Hogan declined to endorse the two bills passed by the General Assembly on the ground of mutual consent, although he did allow the bills to become law without his signature. ...

Yes, we all need a will and estate plan.

When we hear the words ‘estate planning’ many misunderstand its significance for all income levels; it really does apply to all of us. The first element, the will, and the second, trusts, when applicable, form the important foundations of a financial document whose basic purpose is to secure your estate, of any size

Why is mediation ordered by courts in family law cases?

When families are in conflict, mediation may be the ideal way to resolve problems, particularly in regard to finances and children. Interestingly, over the past twenty years, Maryland courts have adopted rules to require litigants in custody disputes to participate in mediation.

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...

Digital Assets: Access after Disability or Death

Estate Planning for the High Tech World In our technology-driven environment, many of us have created “digital assets.”  Digital assets include many types of things such as music, videos, medical records, financial statements, or photographs.  These items may be stored on a computer hard drive, online, or in the “cloud.”  Digital assets may also include accounts on social media websites, e-mail accounts, or merchant websites including credit card companies that offer rewards in the form of points that can be applied to purchase certain goods and services. The world of digital assets can become complicated if the owner of the assets is either deceased or lacks capacity to access to these assets.  It is not unheard of, for example, to receive a notice on a LinkedIn list of a person’s work anniversary years after the person has died.  This is obviously an unsettling event.  What can or cannot be done in these types of situations? Digital assets are governed primarily by terms of service agreements between the owner of digital assets and the provider of services related to digital assets.  Most of us have had experience simply clicking the “agree” button with a provider of digital assets, but equally, most of us do not read the extensive and complex terms of service agreement.  It cannot be assumed that what is included, for example, in a terms of service agreement for Southwest Airlines is the same for Delta Airlines.  Awareness of the contents of the term of service agreement for each digital asset in a portfolio will be informative about how to access a digital asset. Both federal and state...

New Law Untangles Health Care and Divorce

NEW LAW UNTANGLES HEALTH CARE DECISIONS FOR DIVORCING SPOUSES As of October 1, 2017, legislation that will likely change the drafting of separation and marital settlement agreements is in effect. This new law, is entitled Health Care Decisions Act – Advance Directives and Surrogate Decision Making – Disqualified Individuals. The new law imposes prohibitions on specific individuals from serving as health care agents or surrogate health care decision makers for their spouses. The individuals who would be disqualified are those who – in relation to the patient – are subjects of protective orders. But this new law goes beyond cases involving domestic violence. The new law also disqualifies a spouse when he or she has signed a separation agreement with the patient or when an application for divorce has been filed by either the patient or the spouse of the patient. The impact of this new law may only affect a small number of divorcing couples, but it is nevertheless an important change. While it is not a universal phenomenon, in the event of a serious medical crisis, most people who are separating or divorcing would prefer to have someone other than an estranged spouse serve as his or her health care agent or surrogate health care decision maker. Before this new law went into effect, a spouse was deemed to be automatically the first in line as a “surrogate decision maker” for health care matters if the patient had not previously executed an advance directive. The new law may permit a spouse to serve as a health care agent following the execution of a separation agreement or filing...

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