Most people do not want to think about planning for what will happen if the unexpected occurs, but doing so provides invaluable peace of mind that their loved ones will be cared for after they are gone. When a loved one passes, it can place a heavy burden on family members and induce preventable stress. Planning your estate with the help of an experienced attorney will provide you and your loved ones with this peace of mind.
Estate planning is not just for the wealthy—it is crucial for anyone who wants to ensure their wishes are honored and their loved ones are protected. A well-designed estate plan addresses various aspects of one’s life and legacy, including how assets will be distributed, healthcare decisions, and guardianship for minor children.
As an experienced estate planning attorney, Clifford M. Cohen has helped individuals in various life stages draft comprehensive estate plans. Our office offers sophisticated estate planning services to clients in Washington, D.C., and Maryland, including Montgomery County. We understand local laws and regulations in-depth, ensuring your estate plan complies with all legal requirements.
While preparing legal documents on your behalf is our focus, we are genuinely invested in your well-being and establish long-term relationships with all of our clients. We provide compassionate and empathetic guidance, ensuring you feel supported.
Components of Estate Planning In Washington, D.C., and Maryland
Last Will and Testament, Guardianship Provisions, and Probate Administration
Last Will and Testament: This is a legal document outlining how a person’s assets and affairs will be handled after death. Creating a will serves as a safety net to ensure the proper representative is appointed on behalf of your estate and assets are distributed according to your wishes.
An individual may revoke or amend a will at any time before their death, provided they have the mental capacity to do so. You can amend your will by creating a new one or through a codicil, an amendment executed by the same legal standards as an original one.
Guardianship: Your will can address permanent guardianship and who will manage the day-to-day care of your children. It is possible to have the guardian separate from the trustee serving under your trust (if you have one). While permanent guardianship is incredibly important, you should also address who would care for your children in an immediate emergency.
Probate and Estate Administration: Probate is the legal process of validating the last will. Estate administration involves managing and distributing a deceased person’s estate according to their will or state law if there is no will. This includes handling the probate, paying debts and taxes, and distributing assets to beneficiaries.
Trust Documents
Trusts should be considered the foundation of any proper estate plan. In estate planning, several types of trusts can help ensure children are cared for after a parent’s death. Certain trusts are also beneficial in terms of minimizing estate tax liability.
Trusts are arrangements where one party holds property for the benefit of another. These trusts are like safety deposit boxes for your assets. You transfer the assets into a trust and then dictate how and when your beneficiaries will receive them.
Upon your death, these assets are controlled by the terms you’ve set within the trust document. Because the trust owns the assets, they are not subject to the probate process at death. Asset distribution can occur without the delays, entanglements, and public scrutiny associated with probate.
Common types of trusts include revocable living trusts, irrevocable trusts, testamentary trusts, and special needs trusts. These types of trusts will help ensure that children are cared for after a parent’s death. Certain types of trusts can also help to avoid or minimize estate tax liability. For example, an Irrevocable Life Insurance Trust (ILIT) can exclude life insurance proceeds from your estate. Bypass or credit shelter trusts can help married couples maximize their estate tax exemptions, potentially saving a significant amount in federal and state estate taxes.
At The Law Offices of Clifford M. Cohen, we carefully draft the trust to ensure that it meets legal requirements, protects assets for your loved ones, and allows enough flexibility to address unknown future events. We prioritize ensuring that your estate plan meets all your needs and that the law recognizes it.
Federal, Maryland, and Washington, D.C. Estate Tax Considerations
The estate tax is a tax on the right to leave assets at death. Individuals must know the consequences of federal estate tax and specific estate tax provisions in Washington, D.C., and Maryland. Federal, D.C., and Maryland estate tax exemptions are currently different amounts.
The federal estate tax threshold for 2024 is $13.61 million for individuals, which means married couples do not have to pay estate tax if their estate is worth $27.22 million or less. This exemption has helped affluent families pass along substantial gifts tax-free. However, this benefit will remain in effect only through the end of 2025. After that, the amounts will return to 2017 levels in 2026.
The Washington D.C. exemption for 2024 is $4,710,800 per person, and the estate tax threshold for Maryland is $5 million as of 2024 (and has been since 2019). To minimize estate taxes, individuals might consider various estate planning strategies, such as creating trusts, making lifetime gifts, and making charitable donations.
Healthcare Directives and Powers of Attorney
While it is certainly not fun to think about becoming unable to make your own decisions, it is crucial to plan for it. This consideration will also allow you to rest easier, knowing it is taken care of. Under a healthcare proxy, you will appoint someone you trust to make medical decisions if you cannot do so. If you feel strongly about end-of-life decisions, an advanced directive (or a living will) outlines your wishes for medical treatment. Lastly, a durable power of attorney is necessary to appoint a person to handle your financial matters, from paying bills to making investment decisions.
Digital Assets
In today’s digital age, we must consider digital assets like social media accounts, online banking, and cryptocurrency. Make sure to include them in your estate plan. Decide who will handle your digital footprint and ensure they have the information to do so effectively.
Review and Update Your Estate Plan Regularly
Life changes and your estate plan should change, too. Marriage, divorce, growing the family, acquiring new assets, and moving to a new state are just a few life events that should trigger a review of your estate plan. Consulting with a knowledgeable estate planning attorney in D.C. and Maryland is advisable to ensure your documents align with the current laws.
By taking the above steps, you are not just planning for your future—you are taking care of your loved ones and handling your legacy the way you want. It is worth the effort to try to do it correctly.
Contact “Cliff” Cohen Law Group—An Attorney Who Will Treat You With Dignity and Compassion
Our firm offers individuals and families innovative estate planning legal solutions, helping them protect what matters most. From wills and trusts to advanced estate planning strategies, we are the experienced choice for young couples, middle-class families, and high-net-worth individuals.
Founding Attorney Clifford (“Cliff”) Cohen has over 35 years of experience providing his clients and the communities he serves with the highest standards of professional excellence. When you partner with us, you will have peace of mind knowing our esteemed estate planning attorney is by your side. You can depend on us for compassionate, effective representation and personalized attention.