Often when I talk to potential clients, they tell me that they do not have an estate because it sounds as if only people who are wealthy have an estate.   However, that is not true.   The definition of estate is all the money and property owned by a person, especially at death.   When we start to discuss what property people own, they are surprised to learn what is included in their estate.   The first step when meeting with a prospective client is to list all the assets they own and how they are titled.   This is the first step during the estate planning process.

What assets are included in your estate?  Real estate usually comes to mind first.  The title of real estate is determined by looking at the deed, not the deed of trust.   The deed of trust is the mortgage and does not always reflect who owns the real property.  The deed describes the Grantee or the buyer of the property.   If you are married, often you own the property as tenants by the entirety, which is a unique ownership for spouses only.  If you own property with another person who is not your spouse, then the real estate will be titled as joint tenants with right of survivorship or tenants in common.  If the deed is “silent” and does not specify the words “joint tenants” then the real property is held as tenants in common.   This is very important to determine because tenants in common ownership upon death passes according to your Last Will and Testament or through the intestacy statute if you did not write a Will.  Next, the contents of the home are included in your estate.  People often believe that these items should not be valued; however, the value is included in your estate for estate tax purposes.   

Cash accounts such as checking, savings, certificates of deposit, and money market accounts are also included in your estate.   Again, we need to look at the title of the asset, whether you own the account in your name alone or jointly with another person.  Brokerage accounts, stocks, bonds, and mutual funds need to be valued on the date of your death.   Retirement accounts, such as IRAs (Individual Retirement Accounts), 401(k)s, 403(b)s, TSPs (Thrift Savings Plans), and annuities (qualified and non-qualified) are assets that are part of your estate.   

Even though clients are under the assumption that life insurance is not taxed, the value of the life insurance policies are included in your estate for estate tax purposes.   We need to calculate the value of these policies upon your death.  Vehicles, boats, and planes need to be valued and a part of your estate.   Often these items are in the name of one person.   Determining how these items are titled prior to death is an important aspect of the estate planning process.   

Everyone has an estate – be it a large estate as people often envision those who are celebrities to own or a person who simply owns a checking account in their name.   Planning as to who should receive the assets included in your estate, when they should receive these assets, and how they receive the assets is important to all clients whether they have a large or a small estate.  At Elville and Associates, I work with all clients and the size of their estate does not matter.   Everyone needs to have a plan in place for their loved ones, regardless of the size of their estate.   However, the reality is the majority of Americans engage in no estate planning at all (including a significant number of celebrities who have passed), despite the important financial and emotional benefits associated with it.  

Death and taxes are two certainties in life.  Whether you have a modest estate or a large estate, you need to have an estate plan.

Nicole Livingston is a principal and senior estate planning attorney with Elville and Associates, an estate planning, elder law, and special needs planning firm based in Columbia and Annapolis.  To learn more about Nicole and her background, please click here.  To contact Nicole with questions or to set up a free initial consultation to begin your planning or review outdated documents, please email her at nicole@elvilleassociates.com, or call her at 443-393-7696.  

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By: Nicole T. Livingston – Principal and Senior Estate Planning and Elder Law Attorney with Elville and Associates, P.C.

January 8^th — A question most often asked to an estate planning attorney is regarding gifting of assets.   There is a significant amount of confusion regarding gifting.  To begin, there is an annual gift tax exclusion amount, which is the amount of money you can give to another person without having to report the amount to the Internal Revenue Service (I.R.S.).  A gift can be in the form of cash, a check, a stock certificate, or real estate.  Any asset that you give to another person with the intent of relinquishing dominion and control is a gift.  This includes adding a person as the joint owner of a bank account or adding a person to the title of your car or a deed.   Most people do not realize adding a person as a joint owner of a bank account is a gift.   If the amount of the gift exceeds the annual gift tax exclusion, then the person who made the gift is required to report that excess amount to the I.R.S.  Currently in 2021, the annual gift tax exclusion amount is $15,000.00.

The person who receives the gift does not file a gift tax return nor do they have to pay income or gift taxes upon the receipt of the gift.  When you give more than the annual exclusion amount to an individual, you need to report the amount to the I.R.S. on Form 709.  The purpose is to keep track of the amount of money you gift during your lifetime.   You have a lifetime gift tax exclusion amount.  The lifetime amount is the same as the federal estate tax exemption.  The federal estate tax exemption in 2021 is $11,700,00.00 per person.  If you gift more than this amount during your lifetime, then you will owe a federal gift tax.  The rate is the same as the federal estate tax – which is 40%.  The I.R.S. requires you to file a Federal Form 709 for each gift that exceeds the annual gift tax exclusion amount.  Often, clients inquire if it is required if they do not have assets anywhere near the amount of the federal estate tax exemption.   My response is “Don’t mess with the I.R.S.”   

Basis is cost, the second most misunderstood aspect of gifting.   When you gift assets with appreciation such as stock or real estate, then the person who receives the asset also keeps the same basis that the giver of the gift had.   For example, if a stock was purchased for $10.00, then the person who receives the stock as a gift keeps the original cost basis of $10.00.   This is a significant issue with assets that have significantly appreciated.   When you receive stock or real estate as an inheritance (not a gift), then you as the receiver of the asset obtain a new cost basis.   The new cost basis is the fair market value of the asset upon the death of the original holder.   For example, if your dad dies and he leaves you stock that he purchased for $10.00 and now the stock is worth $100.00, then your new cost basis when receiving the stock upon his death will be $100.00.   If you immediately sell the stock for $100.00, then you do not have to pay any capital gains tax.   If your dad gifted the stock to you while he was alive and upon his death you sell the stock for $100.00 you will have to pay a capital gains tax on the difference between the original cost basis ($10.00) and the fair market value ($100.00) – a $90.00 gain.  The capital gains tax can be as high as 28%.  You need to pay both federal and state taxes.   In conclusion, it is best to receive appreciated assets as an inheritance rather than a gift.  

Before you add someone’s name to an account or a piece of property, consult an estate planning attorney.  Not only do we have to discuss whether you need to file a Federal Form 709 and what the cost basis ramifications are, there are elder law issues regarding gifting and applying for Medicaid.   Talk to an attorney before you gift any assets!

Nicole Livingston is a principal and senior estate planning and elder law attorney with Elville and Associates, an estate planning, elder law, and special needs planning firm based in Columbia and Annapolis.  To learn more about Nicole and her background, please click here.  To contact Nicole with questions or to set up a free initial consultation to begin your planning or review outdated documents, please email her at nicole@elvilleassociates.com, or call her at 443-393-7696.  

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Elville and Associates’ Stephen R. Elville and Meghan E. McCulloch Named to 2021 Maryland Super Lawyers List and Rising Stars Lists, Respectively

Authored by:  Jeffrey D. Stauffer – Community Relations Director

Stephen R. Elville, Managing Principal and lead attorney of Elville and Associates, P.C., has been selected to the 2021 Maryland Super Lawyers list. Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.  This is Mr. Elville’s fifth consecutive year being named to the Maryland Super Lawyers list and sixth overall.

Meghan E. McCulloch, Principal and lead attorney of Elville and Associates’ Estate and Trust Administration practice group, has been selected to the 2021 Maryland Rising Stars list.  Each year, no more than 2.5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.  This is Ms. McCulloch’s sixth consecutive year being named to the Maryland Rising Stars list.

“I am humbled and blessed to named to this year’s Super Lawyers list, and to witness our law firm’s growth in 2020 despite the challenges of the COVID-19 health crisis,” remarked Mr. Elville upon hearing of his recognition.  “Having had our best year ever, and having received this continuing recognition, I give credit to all the attorneys and staff members of Elville and Associates, to our client family and all of our referral and business partners, and to all of my teachers, mentors, and colleagues who have helped me along the way.”

Mr. Elville works with individuals and families to provide a unique attorney-client experience and peace of mind solutions to the challenges they face with estate planning, asset protection, and tax planning issues, and with disability and long-term care planning issues.  Mr. Elville has extensive experience in working with clients involved in crisis situations, and also brings a unique and personalized approach to pre-crisis planning.  Mr. Elville is currently a member of the National Association of Elder Law Attorneys (NAELA), Elder Counsel, Wealth Counsel, the Academy of Special Needs Planners, and the National Network of Estate Planning Attorneys.  He is the past Chair of the Howard County Bar Association Estates & Trusts and Elder Law Sections and is the past President of the Coalition of Geriatric Services (COGS). Mr. Elville currently serves as Chair of the Elder Law and Disability Rights Section Council of the Maryland State Bar Association and is a member of the Charitable Gift Planning Advisory Committee for Anne Arundel Medical Center (CGPAC). He also serves as Chair for Law Day Maryland.

Ms. McCulloch manages the firm’s Estate and Trust Administration practice group. She also handles estate planning and elder law matters, with an emphasis on special needs planning, including handling claims for Social Security disability benefits and Supplemental Security Income (SSI) benefits, at every level of appeal, including representation before the U.S. District Court of Maryland. She has a wealth of experience in addressing the unique needs of individuals and families as the navigate through the disability process.  Ms. McCulloch is also an Executive Board Member of the Maryland Association for Justice’s Disability Section and serves as a volunteer attorney with the Maryland Volunteer Lawyers Service.

Upon hearing of Ms. McCulloch’s Rising Star accomplishment again for 2021, Mr. Elville noted, “I am exceedingly proud of Meghan McCulloch on so many levels.  Beyond her professional accomplishments, obvious talent, and abilities, I am proud of Meghan’s commitment to her profession, her law firm and colleagues, and to excellence in advocacy, client care, and pro bono work.  Meghan is very capable and well-deserving of this recognition.  She is also a wonderful person and committed to her family.  I cannot say enough good things about Meghan, professionally and personally.  She is a true credit to the legal profession.”

To learn more about Mr. Elville and Mr. McCulloch, please visit here.  To learn more about Elville and Associates, its practice areas, commitment to client education, and events calendar, please visit www.elvilleassociates.com.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in the practice of law. For more information about Super Lawyers, visit SuperLawyers.com.

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Presented by Elville and Associates’ Managing Principal and Lead Attorney Stephen Elville, this webinar delves into the situations that arise after the death of a client, client’s family member, or loved one and the trust and estate administration that takes place during that time. Helping advisors and family members understand what their roles are in helping clients and loved ones through the legal process, what that legal process is, and how advisors and other planning team members can best work together in support of clients is of paramount importance during this challenging time for all involved.

Learning Objectives:

– unraveling the mystery of what happens after the death of a client or loved one

– minimizing confusion and providing maximum support to clients and loved ones at a time of crisis

– what is the legal step-by-step process that needs to be taken after death?

– what are the practical steps that should be taken after death?

– examining the most significant and potentially problematic legal and tax issues advisors and family members should be aware of in the months following the death of a client or loved one

– how financial advisors, CPAs, and attorneys can best work together in support of clients

 

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

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You should consider your options before paying for a critical illness insurance plan. 

While a regular health insurance plan usually offers comprehensive coverage for all types of illnesses, many plans have high deductibles and copays that require policyholders to pay a lot of money out of pocket. Critical illness insurance allows you to buy insurance to cover that gap if you have a serious health diagnosis, such as cancer or a heart attack. Critical illness insurance can also cover non-medical expenses, such as mortgage or child-care bills. 

Premiums for critical illness policies are relatively low, which makes the coverage appealing. The policies usually pay out in a lump sum, with the amount depending on the policy purchased. There are different types of critical illness insurance policies: some cover only one illness, like cancer, while others offer coverage of a number of different illnesses. The more coverage offered, the higher the premiums. 

Before purchasing one of these policies, however, you need to consider the downsides. Reading the fine print on the policy is very important because the policy will only cover certain illnesses, and actual coverage may depend on the severity of those illnesses. For example, even though the policy says it covers cancer, it may only cover aggressive cancer and not a more slow-moving cancer. In addition, critical illness insurance doesn’t offer the same protections that regular health insurance offers under the Affordable Care Act, so you can be denied coverage if you have a pre-existing condition. Critical illness insurance premiums also tend to rise as you get older, and you could be denied coverage once you reach a certain age. 

Instead of critical illness insurance, you can consider alternatives. First. you should look at your health insurance to see exactly what it will cover. In addition, a health savings plan in which you contribute pre-tax dollars can be a good way to cover unexpected medical expenses. Disability insurance can also offer protection for lost salary due to illness. 

For more information about critical illness insurance, click here.

The attorneys at Elville and Associates are here to guide your family and you through your estate planning, be it updating outdated documents or beginning your first estate plan, through a crisis situation or hopefully a non-crisis situation.  Creating solutions for our clients’ needs through education and counseling using the very best legal-technical knowledge available is part of the practical mission of Elville and Associates.  Along with taking part in an accredited Client Care Program, establishing your will or trust, powers of attorney, and advance directive can offer significant peace of mind in these uncertain times.  

Contact our office today at 443-393-7696, or email Community Relations Director Jeff Stauffer at jeff@elvilleassociates.com, or Managing Principal and Lead Attorney Stephen Elville at steve@elvilleassociates.com to get started today.  We look forward to being a resource to you.

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One of the most important decisions a special needs trust’s donor (the person who supplies the funds for the trust) makes is the choice of a trustee. But how can the donor make sure that the trustee will properly manage the trust when the donor is no longer around to keep an eye on the trustee, especially if the beneficiary is not capable of supervising his own trustee? In many cases, a trust protector can ensure that a beneficiary is protected from trustee mismanagement.

The Duties of a Trustee

A trustee typically manages the day-to-day operations of the trust, often making distributions to the trust’s beneficiary, investing the trust’s assets, and paying the trust’s bills. Once she assumes office, a trustee almost always serves in a “fiduciary capacity,” meaning that she is in a position of trust and confidence and has a legal duty to properly manage the trust’s assets while keeping in mind the best interests of the trust’s beneficiary. A fiduciary is held to a high standard of conduct, and she owes the trust’s beneficiary a strict duty of loyalty. However, in many cases involving special needs trusts, the beneficiary of the trust is unable to properly enforce this fiduciary duty because of his special needs. This is where a trust protector comes in.

The Duties of a Trust Protector

A trust protector is a person chosen by the donor who is responsible for monitoring the trustee’s actions. The trust protector’s duty is to serve as an additional pair of eyes for the trust’s beneficiary, making sure that the trustee is properly performing her job. The trust protector typically has access to the trust’s accounts, and can compel a trustee to produce a summary of what she has done for the beneficiary. If a trust protector believes that the trustee is not properly performing her duties, he can usually fire the trustee. Depending on how the trust is drafted, the donor can even give the trust protector the power to name a new trustee if the donor has not done so himself in the trust document. (Most of the time, however, the trust protector must name an independent trustee as the new trustee, avoiding the scenario where the trust protector fires a trustee only to name himself as the new trustee.)

Example of a Trust Protector

Trust protectors may be useful in a variety of situations. Take the case of Jennifer and her son, Adam. Jennifer is elderly and would like to make sure that her son, who has special needs, is cared for at home for as long a possible after she is gone. So Jennifer decides to establish a special needs trust that will hold her home for Adam’s benefit, and she funds this trust with enough money to make sure that the property is well kept and that the bills are paid. However, Jennifer’s closest relative, her niece Margaret, does not want to serve as trustee of Adam’s trust because she does not want the added responsibility of managing a home. Jennifer decides to name John, a friend of hers who knows Adam and who runs a property management company, as the trustee instead. Although Jennifer trusts John, she decides to name Margaret as a trust protector to review his yearly accounts and make sure that he charges the proper amount for his services and is keeping the property in good shape.

Every special needs trust is different, and in many cases, especially when a donor is serving as trustee, a trust may not initially need a trust protector. The best way to decide if your special needs trust should include one is to speak with your qualified special needs planning attorney.

The special needs planning attorneys at Elville and Associates are here to help your family navigate the planning process for your loved one with special needs along with your own estate plan.  Contact us today to set your free consultation with one of our attorneys, or reach out to Community Relations Director Jeff Stauffer at jeff@elvilleassociates.com or 443-393-7696 x117 to get started.  

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As we enter the giving season, there is an additional reason to be charitable. Congress enacted a special provision that allows more people to easily deduct up to $300 in donations to qualifying charities this year.

Since the increase in the standard income tax deduction in 2018, only 11 percent of taxpayers itemize deductions, so fewer taxpayers take advantage of the charitable deduction. But to both encourage and reward giving in this difficult year, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act Congress created a one-time $300 charitable deduction for people who do not itemize on their tax returns. To qualify, you must give cash (including paying by check or credit card) to a 501(c)(3) charity. Gifts of goods or stock do not qualify.

While $300 may not seem like much, it can make a big difference to smaller charities. And a lot of $300 gifts can add up.  One thing that’s not clear is whether a married couple filing jointly can deduct $600. While it’s logical that they should be able to do so, the IRS has not clarified this yet. With just four weeks left in the year, time is a-wasting.

Here are some places you might take a look at to determine which charity you would like to support before the end of the year:

• Give Directly
• Giving Compass
• Community Foundation Locator
• Philanthropy Together
• Grapevine
• Charity Navigator
• Charity Watch
• Kristof Impact

For more information from the IRS about the tax deduction, click here. 

To learn how you can support Elville and Associates’ 501(c)(3) non-profit charitable organization, the Elville Center for the Creative Arts, which provides musical opportunities to disadvantaged children in our communities, please visit elvillecenter.org.  

If you are charitably inclined and philanthropic, there are also many ways you can incorporate planned giving into your estate planning.  Contact the attorneys at Elville and Associates or Legal Administrator Mary Guay Kramer at mary@elvilleassociates.com to set a free consultation to discuss your planning needs today.  

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Social Security disability recipients will see an increase in benefit levels for 2021, although the rise will be the smallest in years due to the economic downturn caused by the COVID-19 pandemic.  

On October 13, the Social Security Administration (SSA) announced that Social Security benefit levels will increase by just 1.3 percent in 2021, compared with 1.6 percent in 2020 and 2.8 percent in 2019.

“They’ve never been this low for this long a period in the history of Social Security,” Mary Johnson, Social Security policy analyst for The Senior Citizens League, told CNBC.

For recipients of Supplemental Security Income (SSI), Social Security’s primary disability benefits program for low-income people, monthly benefits will edge up from $783 to $794 for individuals, or from $1,175 to $1,191 for couples. (Some states provide an additional supplement for SSI recipients. Specific state-level supplements can be viewed here.)

For recipients of Social Security Disability Insurance (SSDI), Social Security’s primary disability benefits program for people with longer work histories, average monthly benefits will increase from  $1,261 to $1,277.

Each year, the SSA calculates a cost-of-living allowance (COLA) to compensate for the effect of inflation. The method the SSA uses to determine the COLA is widely opposed by disability rights advocates, who argue that it is a poor measure of the spending patterns of Social Security recipients, who tend to spend more on medical appointments, prescriptions, and other essential needs that have higher inflation rates than the rest of the economy.

The day after the 2021 increase was announced, two House members introduced legislation to raise next year’s COLA to 3 precent.

“This absolutely anemic COLA won’t even come close to helping [recipients] afford even their everyday expenses, let alone those exacerbated by COVID-19,” Peter DeFazio (D-Ore.) wrote in a news release.

The annual SSA COLA affects more than just benefit levels. As one example, SSI and SSDI eligibility is contingent on recipients no longer being able to adequately compete in the workforce, or perform substantial gainful activity (SGA). To determine whether a person can perform SGA, they must not be able to achieve a specified monthly income. This SGA threshold will increase from $1,260 to $1,310 per month in 2021.

Similarly, students receiving SSI can have a certain amount of money excluded without losing eligibility for the program. This threshold will increase in 2021 from $1,900 to $1,930 monthly, or $7,670 to $7,770 for the entire year.

The SSA COLA also raises premiums for Medicare Part B, which covers most regular doctor visits (Medicare Part A covers most hospital stays and related services). However, under a short-term spending bill approved by Congress on September 30, the increase in Medicare Part B premiums will be limited to a quarter of the rise based on the COLA, projected to go from $144.60 to $153.30.

Click here to read an SSA fact sheet on the upcoming changes for 2021.

Should you have any questions about Social Security Disability benefits, special needs planning or estate planning in general, contact the attorneys at Elville and Associates for a free initial consultation to discuss your situation so we can create a solution for your needs.  Or,  you may always reach out to Community Relations Director Jeff Stauffer at jeff@elvilleassociates.com, or at 443-393-7696 x117.

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With a push by the Democratic party to return federal estate taxes to their historic norms, taxpayers need to act now before Congress passes legislation that could adversely impact their estates. Currently, the federal estate and gift tax exemption is set at $11.58 million per taxpayer. Assets included in a decedent’s estate that exceed the decedent’s remaining exemption available at death are taxed at a federal rate of 40 percent (with some states adding an additional state estate tax). However, each asset included in the decedent’s estate receives an income tax basis adjustment so that the asset’s basis equals its fair market value on the date of the decedent’s death. Thus, beneficiaries realize capital gain upon the subsequent sale of an asset only to the extent of the asset’s appreciation since the decedent’s death.

A political party change in Washington could mean not only lower estate and gift tax exemption amounts, but also the end of the longtime taxpayer benefit of stepped-up basis at death. To avoid the negative impact of these potential changes, there are a few wealth transfer strategies it would be prudent to consider before the year-end.

If you feel that potential changes in legislation will negatively impact your wealth, we strongly encourage you to schedule a meeting with the attorneys at Elville and Associates soon. We can review your estate plan and recommend changes and improvements to protect you from potential future changes in legislation.  

To schedule a meeting with one of our attorneys, please contact Legal Administrator Mary Guay Kramer at mary@elvilleassociates.com, or 443-741-3635.  

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Do-it-yourself estate plans, wills, and other legal documents are available across the Internet.  Such products are tempting and seemingly convenient, but using them could create serious and expensive legal problems for your heirs.

Online do-it-yourself estate plans may appear to offer a cost-effective and easy alternative to visiting a qualified estate planning attorney or elder law attorney. But are the risks worth the convenience and anticipated savings?

Assessing Your Estate Planning Needs

The complexity of your estate is not always determined by the amount of wealth you have. Below are a few questions to ask yourself when determining the complexity of your estate. If the answer to all of these questions is “no,” a do-it-yourself estate plan may be adequate for you.

1. Do I own real estate?

2. Do I own property of value, such as jewelry, vehicles, equipment, livestock, etc.

3. Do I own savings or investments, such as stocks, or retirement accounts?

4. How is my family structured? For example, do I have children from a previous marriage? Do I have a child with special needs?

If the answer to ANY of these questions is “yes,” you will likely need a lawyer to determine whether or not your estate planning needs are simple or more complex. If they are not simple, you should not try to create an estate plan without the help of an attorney. Additional questions to explore include the following: Do I have an estate that is taxable under state or federal law? Do I own significant amounts of tax-deferred retirement plans? Do I know how to fund a revocable trust? Is there anything about my estate that is unusual? A qualified estate planning attorney will walk you through these questions to determine the level of your estate planning needs. If you have any questions about your estate, you should seek out a professional. Learn more in our blog, Do I Have an Estate?

Do-It-Yourself Estate Planning Hazards to Avoid

The following are some examples of what can happen if you try to create an estate plan without the help of an attorney.

Online Will Never Updated

Using an online generic will, a Florida woman listed several possessions and bank accounts that she intended to go to her brother. After writing the will, the woman inherited additional money and property. However, the woman did not have a “residuary clause” in the original will to say where additional assets should go, and she never revised the will to account for this new property. After she died, her brother argued that he should be entitled to her entire estate, but her nieces argued the estate should pass intestate (i.e., under the laws of her state, as if she had died without a will). The court ruled that because the will had no residuary clause or general bequests that could include the inherited property, the property acquired after her was prepared would pass under Florida’s laws of intestacy. This meant that the brother was not the sole beneficiary. Aldrich v. Basile (Fla., No. SC11-2147, March 27, 2014)

Surviving Spouse Nearly Left Homeless by Do-It-Yourself Will

A Massachusetts man used a pre-packaged will form to leave his home to his wife and his four grown children, the product of an earlier marriage. The problem was that the will didn’t give the wife the option to remain in the house for the rest of her life.  A court case ensued because the children, who possessed the majority interest in the property, could have legally forced the wife to move.  

No Residuary Clause in DIY Will

A Pennsylvania man wanted his estate to go to only two of his five children. He wrote his own will, giving his pickup truck to his daughter and his summer house to his son. He also wrote in the will that he was intentionally leaving his other three children out of his will. The problem was that the man did not specify what to do with the remainder of his estate. He died leaving an estate of $217,000. While he probably intended for that money to go to the two children he didn’t disinherit, because the will had no residuary clause, the remainder of the man’s estate passed under the state law that specifies who inherits when there is no will. This meant that the estate was divided between all five children. (In Re: Estate of George Zeevering, No. 316-2012, Nov. 7, 2012)

Online Estate Plan Found Not Legally Binding

The company LegalZoom, one of the most prominent sellers of do-it-yourself wills and other estate planning documents, settled a class-action lawsuit brought by an unhappy customer in California. A niece helped her uncle prepare a will and trust using LegalZoom. The niece believed that the documents they created would be legally binding. She also believed that if they encountered any problems, the company’s customer service department would resolve them. The niece could not transfer any of her uncle’s assets into the trust because the financial institutions that held his money refused to accept the LegalZoom documents as valid. She had to hire an estate planning attorney to fix the problems. In that process, her attorney also discovered that the will LegalZoom created had not been properly witnessed. All this cost the uncle’s estate thousands of dollars. (Webster v. LegalZoom Inc., No. BC438637, Oct. 1, 2014)

The unfortunate irony is that do-it-yourself estate plans and boilerplate wills in these cases not only frustrated the decedents’ testamentary intent, but ultimately cost their estates far more than a simple consultation with an estate planning or elder law attorney would have. 

The experienced attorneys here at Elville and Associates are here to guide you through your planning.  Most initial consultations are complimentary to help create a roadmap for how you may want to proceed with your planning.  It is our mission to create solutions to our clients’ needs through counseling, education, and the use of superior legal-technical knowledge.  

Do-it-yourself wills and estate plans leave your legacy to chance.  Don’t let that happen. Contact Legal Administrator Mary Guay Kramer at 443-741-3635 or at mary@elvilleassociates.com to schedule your appointment with Elville and Associates to begin your planning or, just as important, have outdated documents revisited.  

Elville and Associates – Planning for Life, Planning for Legacies.

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