Estate Planning

In estate planning, trusts fall into taxable and nontaxable categories. Taxable trusts operate as independent entities, filing separate tax returns and paying taxes on generated income. Nontaxable trusts, typically with a unified creator and beneficiary, are treated as disregarded entities. Key considerations for taxable trusts include their independent status, the need for an Employer Identification Number (EIN), and strategic income distribution to optimize tax rates. Given the complexities, seeking guidance from a proficient trust attorney is crucial for successful trust establishment and management.

This article explores trusts in estate planning, highlighting their types and fundamental structure involving trustor, trustee, and beneficiary. Trusts provide a flexible way to manage property, ensuring both efficient resource utilization and clear identification of beneficiaries. The narrative emphasizes the stability trusts provide amid unpredictable events in one's estate, making them a vital tool. The example of an aging parent establishing a trust for specific asset distribution and educational purposes illustrates the practical benefits. The complexity of trusts necessitates expert guidance for effective estate planning.

When delving into estate planning to maximize the value of one's estate, understanding key terminology is crucial. This post focuses on the concept of "joint tenancy" in the context of Maryland estate planning. Joint tenancy involves co-ownership where each owner has an equal share in the property and the right to inherit the entire property if the other co-owner passes away, commonly used among relatives. This form of ownership is compared to "tenancy-in-common," which allows multiple co-owners with varying percentages to freely sell their stakes without disrupting the property's structure, making it relevant in IRC Section 1031 contexts for exchanges.

The post provides an introduction to fundamental terminology in the field of estate planning. It defines and explains five key terms: will, beneficiary, revocable and irrevocable trust, intestate, and power of attorney. It emphasizes the importance of having a basic understanding of these terms to ensure effective estate planning and consulting with professionals in the field.

This post discusses two main pillars of estate planning in Maryland: the use of trusts and the minimization of tax consequences. Trusts are legal entities that can be established for various purposes, such as ensuring assets are distributed to beneficiaries in a specific manner or for a particular purpose. Trusts have three key players: creators, trustees, and beneficiaries, with the trustee being responsible for carrying out the instructions set forth in the trust. The post emphasizes the importance of selecting a trustee who can fulfill their fiduciary responsibility to the trust.

The IRC Section 1031 is a powerful tool for tax deferral and wealth-building in real estate investment. It allows taxpayers to defer their tax liability from the sale of an investment property and reinvest the profits in a replacement property. By exchanging more valuable properties, taxpayers can potentially increase their earning power and overall financial condition. In estate planning, the beneficiaries of real estate assets acquired through 1031 exchanges will receive a "stepped-up basis" equal to the fair market value of the property at the time of the original owner's death. This enables beneficiaries to sell the property without incurring a significant tax burden, resulting in a substantial financial improvement.

In our most recent piece, we discussed some basic facts about the federal estate tax. Let's go over some other issues involved with Maryland’s estate tax.

This article should be sufficient to round up our series on Maryland’s state-level estate tax and inheritance tax...

In our most recent piece, we discussed some basic facts regarding the federal estate tax, Maryland’s estate tax, and Maryland’s inheritance tax. This post will discuss some of the other issues involved with Maryland’s estate tax.

Most people are aware that the government imposes a federal estate tax. However, fewer people know that individual estates often impose an additional tax on their own.

Divorce will bring up multiple estate planning issues which are commonly overlooked. You’ll need to resolve these issues the sooner, the better. Let's identify a few of the estate planning issues in post-divorce situations.