MYTHS AND MISUNDERSTANDINGS
By Tim Barkley. September 2020. “If I don’t have a will, the State will get everything when I die!” “I don’t need a will, because everything is going to my spouse!” “If I have a will, my estate doesn’t go through probate!” “I need a living trust, so I can avoid probate! That lady on TV said so!” The author addresses these and similar misunderstandings on a daily basis. Some are alarmist, some induce heedless complacency; all can lead to bad results. If you don’t have a will, your assets are not given to the State. Your assets pass to the people that the State assumes – rightly or wrongly – you would want to have them. Sometimes the assumptions are odd. Assets owned by you in your sole name are divided between your children and your...
YOU HAVE THE POWER
You Have the Power. August 2020. By Timothy S. Barkley, Sr. The lady in the parking lot was excited: “Thank you! You don’t know how much you’ve helped us.” I was taken aback, but rose to the occasion: “Certainly!” I must have looked puzzled, because she laughed and said “I’m Sally Smith. You wrote up powers of attorney for my son when he left for college. We’d never thought about it until we read your article, but it seemed like a good idea, and we called. “He left for college a few days later, driving himself, and we got a heart-stopping phone call. He had been in an accident on the way down to school and was in the hospital. But he had the papers in the glove box of his car, and so they called us. “They said that without the power of...
FUMBLING THE BUSINESS
By Tim Barkley. July 2020. “I have a buyer for my husband’s work van, and he can’t sign because he has dementia. We need the money. What can I do?” “We have a buyer for my mom’s business, but she just had a stroke and can’t sign papers. What do we need to do?” The first thing is to look for a power of attorney. If the business owner signed one, that can “save the day.” But, if the business is incorporated or an LLC, not just any garden-variety online freebie power of attorney will do. The power of attorney needs to specifically give powers over your business interests and business assets, not just over investments and personal assets. Business owners are often so busy running the business that they don’t have time to attend to the...
GIVING THE BUSINESS
By Tim Barkley. June 2020. “My husband just died, and I’m trying to figure out what to do with his business. I don’t even have the code to the security system. His business records are all online or in his computer, and I don’t have the password. Can you help?” Of course. Glad to do so. Online public records can be a starting place. If the deceased owned real estate, in his name or in the name of the business, those records are online. In a recent case, we knew about a line of credit, because the bank sent bills. What we didn’t know until we looked at the online land records was that the line of credit was actually the purchase money for the office suite. The estate went from “seriously underwater” to “seriously solvent” almost...
ARE YOU BEING SERVED?
By Tim Barkley. May 2020. “I don't want to achieve immortality through my work; I want to achieve immortality through not dying. I don't want to live on in the hearts of my countrymen; I want to live on in my apartment.” These immortal words of Woody Allen present the human quandary. Yes, we all know somewhere in our subconscious that we have not actually achieved immortality “through not dying,” that we cannot; but it’s easy to continue with life as though we expect to just somehow “live on in our apartment” forever. Clients of this author used to sit in the conference room and explain what should be in their wills and powers of attorney “in case something happens to me.” “The Virus” has changed all of that. Now, the conferences are...
THE DANCE
By Tim Barkley. April 2020. It was a little like a scene from a sci-fi movie when representatives of alien cultures meet to sign intergalactic treaties. But these were just garden-variety wills – yet signed under very unique circumstances. They came in wearing gloves and masks. The documents to be executed had already been laid on the table. We respectfully backed away to the other side of the large conference table as obligatory but somewhat muffled pleasantries were exchanged. The initial ceremonies completed, they signed and retreated. We circled the table, staying diametrically opposite them at all times. We witnessed their signatures, then had their signatures notarized. The documents were taken to “the back office” for copying and...
NO NEW THING
By Tim Barkley. March 2020. Jack and Jill (not their real names) were sipping coffee when the attorney came into the conference room. “Thanks for calling,” the attorney greeted them. “I understand you want to update your estate plan.” “Well, really, we want to create one,” Jill clarified. “Jack got some papers a long time ago from a lawyer at his old work, but it doesn’t really deal with our situation now.” “Let’s see … two of you. Any kids?” “Three. All ours, and all adults. It’s really simple … everything to me, and if we die together, everything to the kids.” “Great. Simpler is better. What are we planning for? Real estate? Mutual funds? Vehicles?” “We own our house, and we have a couple of timeshares. We both have IRAs, and he has a...
HOME ALONE II
By Tim Barkley. February 2020. Last month's offering to our readers considered the effect of the Inheritance Tax on folks without spouse, siblings or children as estate beneficiaries. This month's article offers practical steps to ease the task of your surviving nieces, nephews, friends or other loved ones as they try to sort out your affairs. First, and most basically, be sure your estate planning documents are up-to-date, and that someone knows where to find them. An out-of-date will that leaves assets you no longer own to persons who are no longer living can be an invitation to expensive and time-consuming litigation. Changes in terminology, technology and social norms can make a decades-old medical directive worse than useless. This...
HOME ALONE
By Tim Barkley. January 2020. Estate planning is often discussed in the context of the “typical American family” - Mom, Dad and 1.8 happily adjusted children. But what if that's not you? Planning for unmarried, divorced or widowed clients who have no children presents a special challenge to the planning professional, and requires ingenuity and resourcefulness to avoid the traps for the unwary. The parents of the “typical American family” leave their assets to their children without a thought about the Maryland Inheritance Tax. Most folks don't even know that it exists. That tax is a flat 10% tax on distributions to anyone except lineal ancestors (parents and grandparents), lineal descendants (including stepchildren) and their spouses,...
BACK TO BASICS
By Tim Barkley. December 2019. Billy and Joan had lived across town. He was her only child, and as she grew older, helped with her care. Joan, a widow, had just been admitted to a nursing home with dementia. Immediately after her admission to the home, Billy suddenly and catastrophically died. There was no one to handle Billy’s estate. He had never married and had no children. There was no one to take care of Joan, either. No family or friends came forward. A caring neighbor came to our office with the tale, and we agreed to try to help. Billy and Joan were very private, and we had no way to know whether he had a will, or whether she had named someone in a financial or medical power of attorney to take care of her. We didn’t know who the...
MEDICAID BALANCING ACT
By Tim Barkley. November 2019. Susan sat across from the table and leafed through a manila file folder. “What do you need to know?” “Well, to figure out whether and when Mom might qualify for Medicaid,” replied the lawyer, “we need to know what she owns and what it's worth. “There are two basic categories of assets: Exempt and Countable.” He stood up, went to the whiteboard in the corner, and wrote the titles boldly, underlining each. “Exempt assets are assets that aren't counted for Medicaid qualification purposes. Countable assets are. “Medicaid requires that countable assets be reduced below certain levels before Mom can qualify. These levels are pretty low - $2,500 for a single person. “Countable assets includes everything not...
FREE RIDE
By Tim Barkley. October 2019. Susan caught the lawyer by his elbow in the restaurant. “I thought that was you. Can I ask you a question?” “Sure,” he replied, “what's on your mind?” “I was talking to a friend who told me that we should put Mom's houses and money in a trust so that a nursing home won't take everything.” “Here's the scoop,” the lawyer told her. “If your mother needs a nursing home to care for her, she has a large bill every month. It might be as high as ten or twelve thousand dollars a month if she lives in an expensive facility, or as low as six or seven thousand. It's a big bill, and it has to be paid. “If she stays there long enough, she'll spend a lot of her money.” “That's what worries us,” Susan said. “My father...