Law Office of Rick Todd Blog

For many people in the Columbia area, their estate consists almost entirely of their home. Their retirement accounts will fall to second place, but it will be a distant second place. This brings up the importance of maintaining a home for a person’s wealth portfolio.

Home values in the Columbia metropolitan area are off from their 2008 peak, but have rebounded nicely since then. Homes are basically savings vessels for people.

Trust administration is one of the oldest area of laws in the United States. Whether you live in Columbia, Maryland or Ellicott City, trusts can be used for a wide variety of purposes. For the most part, trusts are divided into two large categories: revocable and irrevocable. Both types of trusts are commonly created by estate planning attorneys and have advantages over wills in that they avoid or minimize the size of the estate for probate (and help to avoid the estate tax).

But, how are trusts administered? It's actually done similarly to the way wills are administered.

Howard County is unique in that it is one of the wealthiest counties in the country, on a per capita basis, yet it lacks some of the traditional hallmarks of more famous wealthy counties in the country. There are no notable country clubs and there are no famous resorts. The county is largely a bedroom county for people working in Washington DC and Baltimore. The western part of the county is farmland. The two largest cities in Howard County are Ellicott City and Columbia.

Lawyers who practice estate planning typically give people a bundle of documents. The foremost document in that bundle is usually the will or revocable living trust. But one of the key supporting documents is known as a living will. Living wills are for when the client is still alive, but unable to make simple decisions. The living will determines how the client wishes to be treated by medical personnel.

Columbia is an upper middle class city in Howard County, Maryland: a county with one of the highest per capita incomes in the country. Because of that, clients in this county needing legal services have high incomes and work in professions that subject them to civil litigation (lawsuits).

What kind of professions are these? Lawyers, doctors, dentists, rental property owners, small successful business owners. The main way to protect from lawsuits while in these professions is to take out a personal liability insurance policy. However, there are times when the policy will not cover damages incurred in an adverse judgment in a court of law, which is when they might turn to an asset protection lawyer.

What does the typical probated estate look like? For one thing, it is probably a female’s estate. Men die with most of their assets being jointly owned by a wife, or possibly a child. At that point there is no reason for a probate because there are no assets that are separately owned. But, when their spouse passes away, families must deal with probate.

A good probate lawyer will be familiar with this scenario.

For many clients, a trust is the optimal choice for administering an estate. Some wealthy clients need trusts known as irrevocable trusts in order to avoid the estate tax or to protect assets from creditors. Others will use trusts to avoid probate. The mechanisms of trust administration are similar to the mechanisms of administering a will, but there are some notable differences that clients need to be aware of.

Probably the biggest difficulty in being a trustee is seeing that the property meant to be inside the trust has been correctly retitled.

Estate planning is commonly thought of as something that individuals prepare for. However, estate planning is used to distribute a person’s property, and often one piece of that property is a business. Businesses need to have a clear path to beneficiary distribution just like a house or a car. If they don’t have one, the value of the business could be lost to your family.

What are buy/sell agreements? A business owner makes a deal with his partners or with another firm for his share in the business to be bought out in the event of his death.

I’ve written on the importance of a trust administration lawyer before, here, and I am going to touch on the process again. Trust administration is becoming more and more of an issue for Americans because of the growing popularity of revocable living trusts. While I believe that revocable living trusts are unnecessary for most people, if a trustee has been chosen to administer a trust, he or she must face a task that can be even more daunting than a probate. That means trustees may need the assistance of an attorney.

Trust administration is not overseen by courts in the same way that probate is.

Choosing an attorney is like choosing any service provider. Various factors need to be taken into account before making a decision, including cost, reputation, and even likability of the provider. Lawyers are licensed service providers who generally work hard to provide the best service possible.

Your will is a vital part of the organization of your estate. While writing your own will is perfectly legal, it’s generally not a good idea: having a wills attorney draft it for you is the best course of action.