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Track: Law

Estate Planning: The Brady Bunch Edition

Posted on by Brian Della Rocca
(To the tune of the Brady Bunch theme song)
Here’s the story, of two single parents
Who were bringing up their children separately
‘Til the one day when they met each other
And they formed a blended family 

We all know the story of the Brady Bunch.  What you didn’t see on the show, that happened behind the scenes, was how Carol and Mike planned for their blended family. Allow us to take some artistic license to explain to you how we think it went.

 

FADE IN: The scene starts with Carol meeting with her attorney, Mr. Wills, in his office furnished with mahogany furniture and decorated with orange and black large pill shape wallpaper.

Carol explains to Mr. Wills that she and Mike would like to get married but want to make sure their separate children are protected.  Mr. Wills then explains that he can help her by preparing a prenuptial agreement.  He also explains that Carol and Mike should consider keeping their finances separated and should execute an estate plan after their wedding. Concerned, Carol says that she loves Mike and doesn’t want to start their marriage off with arguments about finances.  Mr. Wills explains that by putting a plan in place now, arguments can be avoided since important decisions are being made at a time when Carol and Mike are happy and rational, not when they are angry and irrational. Carol looks at the camera and says, “You’re right, Mr. Wills. My number one priority is protecting my daughters, and I am going to Mike tonight about the need for a prenuptial agreement and an estate plan.”

CUT TO: The kitchen in Mike’s house at 11222 Dilling Street, Studio City, CA
As Alice prepares dinner, Carol, looking concerned, tells Mike that she has something important to tell him.  Mike then tells Carol that he has something important to tell her.  They decide that they will say it at the same time.  Both Mike and Carol then say together, “We need a prenup!”

CLOSE UP OF ALICE: Alice responds with, “Anyone offering a trip to Europe for the right answer?”
Carol says to Mike, “I just want to make sure my daughters are taken care of and I know we can work something out that we both agree to.” Mike agrees and holds Carol’s hand, “maybe we should keep our finances separate.  We can create a joint account for family expenses, but we will maintain our assets separately.” Carol responds by saying, “That’s exactly what Mr. Wills told me!  And we can then create an estate plan where we leave our own assets to our kids.”  Mike cuts in, “I want to take care of you first, so I am going to have a trust created that will name you as the primary beneficiary with my sons as contingent beneficiaries.”

In the end, Carol and Mike created a loving environment for their blended family by discussing the difficult topics up front.  Discussing your estate planning concerns prior to marriage expresses how much you love your spouse and respect that he/she has children of his/her own.

The attorneys at Compass Law Partners can help you in starting your blended family off right!

 

https://mailchi.mp/compassadvocacy/compass-law-navigator-september-2023-9089528

Maryland 529 Plan

Posted on by Jen Kidwell

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.

 

https://mailchi.mp/compassadvocacy/compass-law-navigator-july-2023-9086552

Time To Revisit Employee Handbooks, Policies, & Agreements

Posted on by Rob Garagiola

There has recently been a slew of changes and new trends in employment law that require all businesses to revisit their employee handbooks, policies, and agreements.

  • Paid Family Medical Leave is coming to Maryland. The state is expected to announce employer/employee contribution rates to the system this October and contributions will be required 1-year later with benefits set to begin on January 1, 2026.
  • The Pregnant Workers Fairness Act, a federal law, took effect less than 2 months ago and requires certain businesses to provide “reasonable accommodations” to a worker’s known limitations related to pregnancy, childbirth, or related medial conditions.
  • Federal Government and States are Moving to Ban Non-Competes. The Federal Trade Commission has proposed regulations curtailing non-competes and the National Labor Relations Board published a memo taking the position that non-compete agreements violate federal law in certain circumstances. In addition, many states, including Maryland and DC, have taken recent actions limiting non-compete agreements.

With these and other changes in employment law, and to limit potential liability, now is the time to revise your policies.

Compass Law Partners’ Rob Garagiola (RGaragiola@Compass-Law.com) can help you navigate these policy changes and update your employee handbooks and agreements.

 

http://mailchi.mp/compassadvocacy/compass-law-navigator-august-2023-9085056

To Bequeath or Not to Bequeath: That is the question when it comes to vacation homes

Posted on by Brian Della Rocca

For those who are lucky enough to own a vacation home, deciding what to do with that home after your death is often a quandary.  Do you leave it to your children, equally? Do you force its sale? Or do you leave it to a trust for the benefit of your descendants?

We, at Compass Law Partners, frequently have to advise on these issues so I will break down a few of the options, one at a time.

 

Leave Vacation Home Equally to your Children

This option, in my experience, is frequently where problems can arise.  After the inheritance, the children will expect equal contribution to the expense of the home but will frequently not utilize the home equally.  Perhaps one child lives in California and another is in Maryland.  If the vacation home is in Delaware, it is likely the child in Maryland will utilize the home much more. This could lead to resentment by the child in California who may still be expected to cover his/her share of the expenses.

A frequent attempt to settle this dispute is by having the Maryland child buy out the California child’s interest.  However, unless your Maryland child has the funding to do so, this is frequently not an option.  Instead, the only option may be to sell the property, which could then lead to resentment by the child in Maryland.  This potential to create resentment between/among your children is frequently why we typically recommend against this option.

 

Force the Sale of your Vacation Home

This is frequently the easiest option but may not be very popular with your children.  To avoid the potential for resentment between/among your children, requiring the sale of the vacation home after your death may be your best option, especially if the home is the most substantial part of your estate. Once the home is sold, the net proceeds from the sale can be divided equally among your children and, if desired, your child can use those proceeds to buy a vacation home of his/her own.

We frequently recommend this option for those clients who do not have other assets of significant value.

 

Leave the Vacation Home to a Trust for your Descendants

For clients who have significant assets other than their vacation home, we typically recommend the use of an irrevocable trust created after your death to hold the vacation home.  The home would held and maintained by a Trustee of your choosing (frequently an independent Trustee) and you would provide additional seed money to the trust to cover expenses for a period of years.  That way, your children and/or grandchildren are able to utilize the vacation home but do not have to contribute to its expenses for a period of time.

At the expiration of that period of time (or when the money runs out), the Trustee can decide whether to sell the property or to request money from the beneficiaries to maintain the property.  This option frequently creates the least amount of friction among children so clients, if they can provide additional funding to the trust, will frequently choose this option.  For clients with the ability fund a trust, we frequently recommend this option for their vacation home.

If you have a vacation home and are not sure how to leave it to your children, the attorneys at Compass Law Partners are here to help you.

 

Read More Here!

New Parent and Legal Documents: What You Need to Know

Posted on by Brian Della Rocca
With Mother’s Day celebrations wrapping up and Father’s Day plans in the making, Compass Law has compiled a new parent checklist to assist new parents and remind current parents of the many forms you will want to have secured when your family expands.
Being a parent is tough – so let us help make it easier!
  • Will
    • Guardianship Document
  • Living Will (for those moms-to-be)
  • Trust
  • Advanced Medical Directive
  • Beneficiary change form
  • Changes to your IRA, 401k, life insurance
  • Life Insurance policy
  • Health insurance card
  • W4

 

Read More Here!

New Laws Require Business Tune Up

Posted on by Rob Garagiola

New laws in Maryland will:

  • Accelerate minimum wage increases to $15/hour;
  • Establish employer/employee contributions to Maryland’s soon-to-be implemented Paid Family Medical Leave Act; and
  • Prohibit non-compete clauses in certain circumstances.

In addition, the Federal Trade Commission is proposing regulations to ban non-compete clauses.

The bottom line: It’s critically important for all businesses to review their business and employment policies, including employee handbooks and employment agreements.

Business owners – even single-member owners – should also review their operating/buy-sell agreements at least every 3-5 years.

Compass Law can help update your employment and business agreements to meet your needs as laws continue to change. Reach out now for a consultation.

 

May 2023 Law Navigator

Supplemental Needs Trusts

Posted on by Jen Kidwell

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

2023 Employment & Business Legislation To Affect Your Business

Posted on by Rob Garagiola

More than 2,200 bills have been introduced in the Maryland General Assembly and 150 bills have been introduced before the Delaware Legislature. In Maryland, legislation has been introduced to:

  • Accelerate minimum wage increases;
  • Modify a law that will require most businesses to make contributions to a paid family leave insurance program; and
  • Prohibit non-compete clauses in certain circumstances.

In addition, the District of Columbia has made recent changes in laws affecting restrictive covenants. Now it’s more important than ever review your business and employment policies, including employee handbooks and employment agreements. Compass Law can help. Reach out now for a consultation.

 

March 2023 Law Navigator

Posted in Law

Preparing for Vacation

Posted on by Brian Della Rocca

 

As Spring (slowly) approaches, many families are starting to finalize their vacation plans. March and April are big months for winter-weary families to get away.

However, as families prepare for their vacations, one item is typically never found on their “To Do” list – estate planning. If you plan to travel with your family, you should really have your affairs in order in the event the unthinkable happens.  Whether it is death or disability, an estate plan will provide your heirs with the information they need to carry out your wishes.  Otherwise, you are at the mercy of State law and, potentially, a Judge who has no idea who you are.

The core documents in an estate plan are a Last Will and Testament, Financial Power of Attorney and an Advance Medical Directive.  While preparing an estate plan may seem like an onerous task, the attorneys at Compass Law Partners will walk you through the process and ensure your estate plan is completed in a timely manner.

Posted in Law

New Years Resolutions 2023: Guardianship

Posted on by Jen Kidwell

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
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