When you are listening to the radio or streaming your favorite playlist, estate planning is probably the furthest thing from your mind. However, there may be hidden lessons regarding estate planning within some of the lyrics from your favorite artists.
“It’s like the more money we come across/ the more problems we see”- Mo Money Mo Problems by the Notorious B.I.G.
It is possible that the more money and assets included in your estate may require more advanced planning techniques. Currently, the federal estate tax exemption is $12.92 million and Maryland also has an estate tax exemption of $5 million. This means that if you have over $12.92 million dollars, you will owe federal estate tax on the amount that exceeds the $12.92 million. If you have over $5 million, you will owe the state of Maryland estate tax on the amount that exceeds the $5 million. However, there are different estate planning tools that can help to lower the tax that may be owed.
“Now my advice for those who die/ declare the pennies on your eyes/ Cause I’m the taxman” – Taxman by The Beatles
Estate taxes are not the only taxes that you have to worry about when administering an estate. There is also income tax on income into an estate or trust after death. Additionally, in Maryland there is an inheritance tax on assets passing to anyone who is not exempt. Again, it is important to have this in mind when initially creating your plan and it is essential that whoever carries out your plan gets assistance from qualified professionals who are well versed in handling these issues.
“I used to do a little, but a little wouldn’t do it/ so the little got more and more”– Mr. Brownstone by Guns and Roses
One of the biggest concerns we often hear from clients is that they have a financially irresponsible beneficiary. If you have concerns about how your beneficiaries will spend their inheritance, then there are estate planning tools to limit how they can receive and use the assets left to them. A discretionary trust is a solution to this problem. You can name a more responsible family member or bank as Trustee to manage and protect the funds held in the trust, but the funds will still benefit the individual intended.
“I have this dream my daughter-in-law kills me for the money/ She thinks I left them in the will.”-Anti-Hero by Taylor Swift
With Taylor Swift being one of the most successful pop-stars over the last decade, it’s not unusual that she would be concerned of predators wanting a piece of her large estate. However, she should rest easier knowing that if they did kill her for her money, most states have what is commonly referred to as the Slayer Rule. Generally, this rule states that you cannot inherit from someone that you kill.
“You just slip out the back Jack/ make a new plan Stan, you don’t need to be coy, Roy/ just get yourself free”– 50 Ways to Leave Your Lover by Paul Simon
Although Paul Simon names numerous ways to leave you lover in this popular song, none of them will help protect your estate if you are married. If you are legally married at the time that you pass away, then your spouse can take an elective share of your estate. Even if you disinherit them and leave them nothing in your estate plan, they can still take the elective share. When divorcing a spouse, it is absolutely critical to review your estate plan.
“Running on (running on empty)/ But I’m running behind”– Running on Empty by Jackson Browne
Although we may all at times be running on empty, we do not want the same for our trusts. It is extremely important to re-title your assets into your trust. If your assets are not titled in your trust, then the trust will not control them. If you do not fund your trust, then any asset in your individual name without a named beneficiary will be subject to probate. In addition to probate being stressful and expensive, failing to transfer assets to your trust means that your assets may not go to the people you intended.
“Here I am baby/ Signed, sealed, delivered, I’m yours/ you got my future in your hands”- Signed Sealed Delivered by Stevie Wonder
You may have your estate plan thought out perfectly in your mind or even written down a plan. However, if you do not properly execute that estate plan following state guidelines for witnessing and notarizing the legal documents, then it will not be valid. Once signed, it’s imperative that your fiduciary knows that the plan exists and can access the documents.
- The Importance of Being Earnest (And Funding Your Trust) - November 28, 2023
- Trustee Commissions Under the Maryland Trust Act - October 6, 2023
- The Great Estate Administration Myth: The Reading of the Will - August 1, 2023