AVOIDING PROBATE - MVLS...AVOIDING PROBATE for low-income clients K. Alice Young, Esq. Nusinov...
Transcript of AVOIDING PROBATE - MVLS...AVOIDING PROBATE for low-income clients K. Alice Young, Esq. Nusinov...
AVOIDING PROBATEfor low-income clients
K. Alice Young, Esq.Nusinov Smith, LLP
6225 Smith Avenue; Suite 200BBaltimore, MD 21209
(410) [email protected]
TOPICS
• DEEDS FOR REAL PROPERTY,
• PAY ON DEATH ACCOUNTS,
• TRANSFER ON DEATH ACCOUNTS,
• BENEFICIARY DESIGNATIONS, AND
• MVA TITLE BENEFICIARY DESIGNATIONS,
A NEW PROCESS FOR TRANSFERRING CARS.
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
Even if your client has low income or few assets, you must still be
concerned with the same complex interpersonal and family dynamics.
• Document family relationships in detail particularly if a client wants
to disinherit a spouse or child
• Ask about the financial circumstances of potential beneficiaries
and counsel your client that a gift may jeopardize means-tested
public benefits
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
WARNING ACHTUNG!
WHO IS
THE CLIENT?
IDENTIFYING
CONFLICTS
OF INTEREST
CAPACITY
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
ETHICAL CONSIDERATIONSTHE THREE C’S
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
INTERVIEWING THE CLIENT
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
FINANCIAL ACCOUNTS
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
At least a portion of the interview, preferably the beginning,
should be solely with the Client, in the absence of any support
person, to establish 1) the Client’s understanding of the
meeting; 2) your obligation to Client-Attorney confidentiality;
and 3) the Client’s central role in the planning conversation.
WHO IS
THE CLIENT?
IDENTIFYING
CONFLICTS
OF INTEREST
CAPACITY
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
WHO IS
THE CLIENT?
IDENTIFYING
CONFLICTS
OF INTEREST
CAPACITY
Rule 1.7 - Conflicts of Interest, General.
Informed consent, confirmed in writing
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
WHO IS
THE CLIENT?
IDENTIFYING
CONFLICTS
OF INTEREST
CAPACITY
Contracts: understand the nature and effect of the act and the business being
transacted (variable)
Deeds: understand the nature and effect of the act at the time of the conveyance
Gifts: understand the nature and the purpose of the gift, understand the nature
and extent of the property to be given, understand the natural objects of one’s
bounty, and understand the nature and effect of the gift (may be a higher
standard than testamentary capacity)
Will: understand the natural objects of one’s bounty, understand the nature and
extent of one’s property, and interrelate the elements to make a disposition of
property according to a rational plan
Power of Attorney: generally parallel to the capacity to contract
Advance Medical Directive: generally parallel to the capacity to contract
ABA Commn. on L. & Aging & Am. Psychological Assn., Assessment of Older Adults with
Diminished Capacity: A Handbook for Lawyers (2005).
http://www.apa.org/pi/aging/resources/guides/diminished-capacity.pdf
Levels of Capacity Needed for Specific Legal Transactions
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
SPOILER ALERT!
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
Per Stirpes
By Representation
“If s/he survives me”
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
Per Stirpes By Representation “If s/he survives me” Anti-Lapse
1-210 Intestacy. If the
intestate decedent is
survived by issue, the share
for the issue is split so that
each surviving child receives
a share and the surviving
children of a predeceased
child receive an equal portion
of that predeceased child’s
share
1-210.1 Testacy. Scheme
can be overcome by specific
instructions in the Will
Where all the members of
one class of takers
predeceased the decedent,
the division of interests is
equal at the next level at
which at least one member of
the class survived the
decedent.
Ex. If the decedent had no
surviving spouse, issue,
parents or siblings, the
intestate heirs are the
decedent’s first cousins; if no
first cousins survive, then the
division into equal shares
may take place at the level of
first cousins, once removed
3-110 – if someone who
would otherwise be an heir
fails to survive the intestate
decedent by at least thirty full
days, s/he is not entitled to
the rights of an heir
4-401 – unless the Will states
otherwise, Maryland’s statute
requires a legatee to survive
for thirty full days to receive
the legacy
4-403 – if a legatee dies after
the execution of the Will but
before the testator’s death,
then Maryland’s anti-lapse
statute directs the gift “to
those persons who would
have taken the property if the
legatee had died, testate or
intestate, owning the
property.”
REFERENCES TO THE ESTATES AND TRUSTS ARTICLE
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
Probate Estate Administration
Subject to Administration
through the Register of
Wills for the county in
which the Decedent was
domiciled at death
E&T 5-103
Total Estate:
Trusts; Probate; Non-Probate
Probate Estate
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
EVERYTHING ELSE!
Here we focus on avoiding probate by
deed, contract and operation of law
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
TRANSFER OF REAL PROPERTY BY DEED:
1. LIFE ESTATE DEED WITH POWERS OF APPOINTMENT
2. LIFE ESTATE DEED WITHOUT POWERS OF APPOINTMENT
3. JOINT TENANCY & TENANCY IN COMMON
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
PRO: Deeds can be used to avoid cost and time of probate
CON: Deeds themselves cost money to prepare and record
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
LIFE ESTATE DEED RETAINING POWERS TO ALIENATE• A life estate deed creates two owners – the life estate tenant and the remainderman
• The life estate tenant retains the right possess the property for her life
• On the life estate tenant’s death, the remainderman owns the property without the need for probate – this deed is essentially an estate planning tool
• Retaining powers to sell , mortgage, take back or give away (but not devise by Will) means the l ife tenant can destroy the interest held by the remainderman and so the transfer is not a complete gift
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
LIFE ESTATE DEED WITHOUT POWERS TO ALIENATE• A life estate deed creates two owners – the life estate tenant and the remainderman
• The life estate tenant retains the right possess the property for her life
• On the life estate tenant’s death, the remainderman owns the property – no probate
• Foregoing powers to sell , mortgage, take back or give away the property means the life tenant cannot destroy the interest held by the remainderman without the remainderman’s participation and so the transfer is a complete gift – implicates gift laws
• This is often used as a Medical Assistance planning tool, not just for estate planning
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
JOINT TENANCY v. TENANCY IN COMMON
Joint Tenants own an undivided fractional interests in something and the tenancy carries rights of survivorship – when one joint tenant dies, the remaining tenant/s own the deceased tenant’s share.
Tenants in Common own undivided fractional interests in something, but without rights of survivorship. A deceased tenant’s share passes through his or her estate.
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
JOINT TENANCY TO AVOID PROBATEOVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
TENANCY IN COMMONDOES NOT AVOID PROBATE
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
FINANCIAL ACCOUNTS, INSURANCE AND BENEFITS
1. Pay on Death Designation
2. Transfer on Death Designation
3. Beneficiary Designation
4. Custodial Designations where available
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
FINANCIAL ACCOUNTSFinancial Inst. Article 1-204. Multi-party accounts“A provision in an account agreement for a transfer on death in compliance with this section is nontestamentary and shall be effective according to the provisions of this section. Transfers pursuant to this section are effective in the form and manner prescribed by this section and are not to be considered testamentary .”
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
On legislative intent, see also the annotation:
Section 2, ch. 578, Acts 1992, provides that "this Act is intended to alter the
common law, including Whalen v. Milholland, 89 Md. 199, 43 A. 45 (1899),
Milholland v. Whalen, 89 Md. 212, 43 A. 43 (1899) and their progeny, as it
applies to all deposit accounts in financial institutions that are established in
the name of one or more parties, whether or not in trust, or with survivorship
rights, or with payable on death rights."
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
FINANCIAL ACCOUNTSMultiple-party accounts include:
1. Joint Checking and Savings Accounts
2. Pay on Death (POD) Accounts
3. Trust AccountsFor these accounts, a ‘party’ includes someone who has authority to make withdrawals and excludes someone who is a trust beneficiary, a POD payee and a convenience person.
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
On ownership v. right to withdraw, see also the annotations:
Md. Code Ann., Fin. Inst. § 1-204 governs only an account holder's ability to access funds from a joint account,
and it does not relate to the underlying ownership interests in those funds; § 1-204 does not affect or supersede
any relationship or agreement between the parties themselves relating to the ownership of the funds in an
account. Wagner v. State, 220 Md. App. 174, 102 A.3d 900 (2014).
Despite defendant's statutorily granted authority under (f) to access and withdraw funds in a joint account that she
held with her father, that did not confer ownership of the funds to her in such a way that she could not have been
held guilty for theft, based on her actions. Wagner v. State, 445 Md. 404, 128 A.3d 1 (2015).
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
FINANCIAL ACCOUNTS
Transfer on Death (TOD) designation serves the same purpose as a Pay on Death (POD) designation, but for an investment account. Joint ownership and TOD registration allow the ownership of the account to pass to a surviving co-owner or a TOD recipient without the need for probate.
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
LIFE INSURANCE
Beneficiary Designations
1. Beneficiary designations are contracts and interpretation is limited to the four corners
2. As with any contract, the insurance company’s form can be modified to suit the policy owner, as long as the modification is accepted by the insurance company.
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
LIFE INSURANCE
Beneficiary Designations can also include provisions for proceeds payment to a Custodian for a minor.
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
Sample Designation: Grampa Joe, father of the Insured, as custodian for
Chris Chisolm, child of the Insured, under the Maryland UTMA.
Sample Designation: David Doe, former spouse of the Insured, as custodian
for Chris Chisolm, child of the Insured, under the Maryland UTMA, and David
Doe as custodian for Pat Chisolm, child of the Insured, under Maryland UTMA,
in equal shares; provided, however, that if at the time of the Insured’s death,
either Chris Chisolm or Pat Chisolm is not living, the entire proceeds shall be
paid to the custodian for the survivor of them.
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
In this case, the grandfather received this check from the life
insurance company and converted it to his own use. The grandfather
has pleaded guilty to theft, repaid just over half of the misappropriated
funds and has a judgment for restitution against him.
WHOM DO YOU TRUST?
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
MOTOR VEHICLES
THE FINAL FRONTIER OF
NON-PROBATE TRANSFERS
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS &TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
TRANSFER ON DEATH FOR
MOTOR VEHICLESOVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS &TESTAMENTS
Transportation 13-115. Transfer-on-death beneficiary designation.
(a) In general. -- An individual who is the sole owner of a motor vehicle may apply to the Administration to designate a beneficiary to take ownership of the motor vehicle on the death of the owner.
(b) Manner of designation. -- The designation of a beneficiary may be shown by the words "transfer-on-death" or the abbreviation "TOD" after the name of the registered owner on a certificate of title.
(c) Effect of designation; cancellation or change. --
(1) The designation of a beneficiary for a motor vehicle does not affect the ownership of the motor vehicle until the death of the owner of the motor vehicle.
(2) The owner of a motor vehicle may cancel or change the designation of a beneficiary at any time without the consent of the beneficiary by applying to the Administration.
(d) Requirements. -- The designation of a beneficiary is not required to be supported by consideration, and the certificate of title of the motor vehicle for which the designation is made is not required to be delivered to the beneficiary in order for the designation to be effective.
(e) Death of owner. -- On the death of the owner of a motor vehicle who has designated a beneficiary, ownership of a motor vehicle shall pass to the beneficiary if the beneficiary survives the owner.
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
TRANSFER ON DEATH FOR
MOTOR VEHICLESOVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS &TESTAMENTS
https://securetransactions.mva.maryland.gov/emvastore/(S(douijlehqfxxdsqvkyhkdvl4))/MustHave2.aspx
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
LAST WILLS & TESTAMENTSEveryone Needs a Will – No Matter How Well You Plan
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
The will is the testator’s set of final technical instructions and should include
1. Indication that the executor may serve without purchasing an insuring bond;
2. Authorization for executor to pay funeral expenses without court approval;
3. Instruction as to the payment of any death taxes owed by any legatee;
4. Uniform Transfers to Minors Act instructions;
5. Nominations for Custodian and Guardian where there may be minors;
6. Nomination and contingent nomination for executor; and
7. Recipients and contingent recipients of gifts.
Even when you [think you] have designated everything to pass byDeed, Contract or Operation of Law:
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
GENERAL
ETHICAL CONSIDERATIONS& PRACTICE TIPS
ADVANCE MEDICALDIRECTIVES
POWERS OF ATTORNEY
LAST WILLS& TESTAMENTS
ET 4-102. Execution formalities
Except as provided in §§ 4-103 and 4-104 of
this subtitle, every will shall be (1) in writing,
(2) signed by the testator, or by some other
person for him, in his presence and by his
express direction, and (3) attested and signed
by two or more credible witnesses in the
presence of the testator.
OVERVIEW
TRANSFER OF REAL PROPERTY
FINANCIAL ACCOUNTS
MOTOR VEHICLES
LAST WILLS& TESTAMENTS
THANK YOU!
K. Alice Young, Esq.Nusinov Smith, LLP
6225 Smith Avenue; Suite 200BBaltimore, MD 21209
(410) [email protected]