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...

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. For those of us who decline to write a will, the State of Maryland will direct the disposition of assets through the law of intestacy as found in the Estates and Trusts Article of the Maryland Code. The will is essential, serving as your voice when you are gone. It allows you to determine beneficiaries, designate guardians for your children, reduce estate taxes, and contribute to preferred charities. While not everyone needs trusts, they are a way of supporting the will by specifically naming who manages your estate and even placing conditions on the distribution of your assets. Estate planning, finally, is a gift to your family. By preparing and planning not only will your estate be distributed as you wish, but you will help avoid potential conflict among members of your family after your...

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...

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...

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...

Post Divorce Estate Planning

TYING UP LOOSE ENDS After the dissolution of a marriage, the last thing most people want to do is think about estate planning. With all the ups and downs associated with separation and divorce, it certainly is not a fun thing to plan for the distribution of property after one’s death. And yet, viewed from a different perspective, this fundamental life changing event can be a particularly good time to reflect on what is important to each of us and how we would like to be remembered by those who follow us. With some thoughtful preparation, recently divorced people can use the immediate post-divorce period to draft some basic estate planning documents consistent with their new legal status. The severing of the legal relationship between spouses has a major impact on estate planning. In Maryland, following a final divorce, the provisions made by the writer of a will regarding his or her former spouse are revoked by operation of law, unless there are alternative provisions in his or her will or there is language in the final divorce order to the contrary. While this affords us some measure of protection, as one might expect, relying solely on the legal default mechanism contained in the Estates and Trusts Article of the Maryland Code is likely not sufficient. Single people with minor children may have special concerns about the management of funds on behalf of their minor children. And as a general matter, because property is not exclusively passed through a will, it is essential to pay careful attention to titling of assets and forms designating beneficiaries for certain property such...