Maryland 529 Plan

Any parent or family member of a child probably knows that 529 plans can be powerful tax-advantaged tools for saving for educational expenses, especially those incurred in college. However, they can achieve some potentially helpful estate planning goals as well.

  1. Special rules allow for gifting into 529s up to five times the annual gift exclusion amount (this year, the yearly maximum is $17,000/person), so they can be particularly useful for people wanting to make larger gifts to loved ones who may have current or future educational expenses.
  2. Since owners of accounts can change beneficiaries among certain extended family members, they can develop pools of funds available for future generations of college students as well.
  3. Finally, as of 2024, new rules allow for up to $30,000 per beneficiary to be rolled over into Roth IRA for accounts that have been open for more than 15 years. Though we’re all waiting to see exactly how the new laws are applied, this adds flexibility for beneficiaries down the road.

Questions about how these accounts can help you achieve multiple goals for your family at once? Reach out to Compass Law and we’ll be happy to help.

Supplemental Needs Trusts

Trusts are fantastically flexible tools that people of nearly all income levels can use to ensure their loved ones are well cared for long into the future. This is especially true for loved ones who might have disabilities or special needs. Whether you’re planning for a child, niece or nephew, sibling, or older adult relative with special needs, supporting these family members means navigating the complex web of public benefits these individuals are often eligible – or may become eligible – to receive. Loved ones need to thread the needle of making funds available to “supplement” the support these programs provide without accidentally making the funds recoverable by these programs or accidentally disqualifying their loved ones from these services.

Thankfully, the attorneys at Compass Law Partners can ensure all the key components of a well-drafted Supplemental Needs Trust are present so you can stop worrying about the type of care your loved one will receive in the future, and focus on being present with them now.


April 2023 Law Navigator

New Years Resolutions 2023: Guardianship

Take the time to understand Guardianship and how it actually works:

If a child’s parents die and no relative or close family relation is immediately identified as being able to care for the child, a child will go into the foster care system. Hopefully, this is only for a brief stay until someone can be located, but sometimes these things take time. Next, a relative or family friend petitions the court for guardianship of the child. There are hearings, possibly multiple petitions from different people to deal with and possibly conflict. A judge has to do their best to guess who is the best person to be guardians of your kids. Judges try hard, but they aren’t you. They can’t possibly know or internalize all the reasons why someone who looks great on paper might not be the person you want raising your kids.
Even if the person you want to “win” is appointed guardian, they may still have had to go through an exhausting, contested, and expensive process. Contested guardianships often benefit from an attorney’s help, and those fees can be quite expensive in an involved proceeding.
Investing a bit of time, energy, and funds now ultimately saves your family the uncertainty of now knowing your wishes, the anxiety of a potentially contested proceeding, and the related expenses.
Contact the Compass Law team for assistance!
Posted in Law

Holidays and Estate Planning

The holiday season is just around the corner, and while that means that there will be delicious baked goods everywhere and your favorite movies on TV and great deals on all sorts of treasures, it also is a season of family and friends. Between travel and gifting buying and family traditions (both beloved, and otherwise), it’s hard to escape reflecting on family this time of year, regardless of what feelings that stirs up.

No matter what your family has been through in the 12 months, this is a good time of year to dust off those estate planning documents and remind yourself which important jobs you delegated to which sibling, uncle, child, or friend. Who has the power to manage your financial life or your health care decisions if you aren’t in a position to do so yourself? Who would have the power to manage your affairs after you pass away? Is your cousin really still the best person to be a back-up guardian for your kids, or did she commit to the ugly sweater competition with a little too much enthusiasm this year?

Here at Compass Law Partners, we routinely meet families whose loved ones died without estate planning documents, or whose most recent will was circa 1984. Loved ones come to us unsure of what to do if there aren’t documents in place or are unsure how to manage documents that are so old they’re hardly useful anymore. We are always happy to assist, but always do so knowing that there are ways their loved ones could have made the process easier for them.

We recommend you pair that trial version of the side dish you’re making for Thanksgiving with a review of your estate planning documents. We’re always on call to update or create new documents for you.

Posted in Law

Your Vacation Checklist

The summer heat and humidity are surely here to stay for another month or two, and hopefully you have time for at least one more getaway before the arrival of pumpkin-spice-everything. Whether you’re heading to the beach, hiking in the mountains, or exploring a new city, we have some suggestions for ways to make your trip even more relaxing.

If you have minor children and have managed to leave them at home, have you given their caretaker the authority they need to take care of them in an emergency? There are a few ways to approach this depending on your state, but most of them are variations of a Power of Attorney or a Standby Guardian Designation.

Have you officially designated back-up medical decision-makers if both you and your spouse are injured on that amazing parasailing trip? If you haven’t decided on at least two tiers of medical decision-makers, you could be setting your family up for conflict, and, the person you would trust the most to manage your health may not come out on top. Set up or review your Advanced Directive for Healthcare to make sure your wishes are clear so you can parasail in peace.

We can help you check these hidden items off of your vacation to-do list, in addition to creating or updating your will or trust and other important estate planning documents.

Posted in Law

Let’s Talk About Bruno

Sometimes, for kicks, attorneys who do estate planning imagine how they would go about creating a will or trust for a family from a popular TV show (yes, we know it’s weird and we don’t care). The Brady Bunch is a classic example, and the Modern Family crew is interesting too. But lately, the Madrigal family from Disney’s Encanto has been on my mind (and on a continuous loop on my TV).

One of the most popular songs from the movie is called “We don’t talk about Bruno,” in which family members explain their encounters with a mysterious uncle who disappeared under suspicious circumstances. Perhaps his secrets can reveal some of the complicated dynamics at play in the present. Perhaps all this secret-keeping wasn’t the best move. Perhaps not talking about him was actually making their situation worse!

Every family has unique dynamics and challenges, strengths, and secrets. When we work with a family to create their estate plan, we take the time to learn their values and the situations and relationships that are unique to their family. There’s no one-size fits all family; there’s no one-size fits all estate plan. The process of creating a will or trust to plan for the future invites us to navigate complicated scenarios together. We can help you understand the tools that support the priorities you have for your family – Brunos included.

Posted in Law
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