The Fundamentals of

Estate Planning

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The Fundamentals of

Estate Planning

Angela M. Vallario

Carolina Academic Press

Durham, North Carolina

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Copyright © 2012Angela VallarioAll Rights Reserved

Library of Congress Cataloging-in-Publication Data

Vallario, Angela M.The fundamentals of estate planning / Angela Vallario.p. cm.

Includes bibliographical references and index.ISBN 978-1-59460-629-8 (alk. paper)1. Estate planning--United States. I. Title.

KF750.V35 2011346.7305'2--dc23 2011037255

Carolina Academic Press700 Kent Street

Durham, NC 27701Telephone (919) 489-7486Fax (919) 493-5669www.cap-press.com

Printed in the United States of America

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Contents

Table of Statutes xixPreface and Acknowledgments xxi

Chapter 1 · Overview 3Overview 3I. The Documents 4A. The Will 4B. Trusts 5C. Power of Attorney 71. Agent or Agents 82. Effective Date 93. Durable Power of Attorney 104. Gift-Giving Power 105. Revocable Trust Power 116. Enforceability 127. Advantages and Disadvantages 128. Sample Form 13

D. Advance Medical Directives 131. Appointment of Agent 142. Nutrition and Hydration 153. Organ Donation 154. Pregnancy 165. HIPAA Provision 166. Sample Form 17

II. Will Substitutes 18A. Life Insurance 181. Policy Ownership 182. Insurance Products 203. Liquidity 21

B. Joint Accounts 23C. Retirement Arrangements 24D. Gifts 251. Annual Exclusion, Educational, and/or Medical Gifts 252. Gift Basis 263. Implementing Gift-Giving Program 27

Chapter 2 · Ethical Issues in Estate Planning 29Ethical Issues in Estate Planning 30I. Ethical Rules Relevant to Estate Planning 30A. Rule 1.1 301. Estate Planner’s Level of Skill 30

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2. Reliance on Client-Provided Information 303. Execution of Estate-Planning Documents 31

B. Rule 1.2(a) 321. Educating the Client 322. Limiting Scope of Representation 32

C. Rule 1.3 321. Timetable 322. Avoiding Misunderstandings as to Scope of Representation 33

D. Rule 1.4 331. Means of Communication 33

E. Rule 1.5(a) 341. Communication of Fee 342. Contingency Fee in Estate Planning 34

F. Rule 1.6 351. Legal Assistants, Secretaries, and Office Staff 352. Consultants and Associated Counsel 353. Obligations after Death of Client 35

G. Rule 1.7 361. Existing Client Asks Attorney to Prepare Will or Trust for Another Person 36

H. Rule 1.8(c) and (f) 361. Gifts to Attorney 37

I. Rule 1.14 (a) and (b) 371. Discussing Options in the Event of Diminished Capacity 38

J. Rule 1.18(b)–(d) 381. Conflicts Check 38

II. Identifying the Client 38A. The Elderly Client 39B. Multiple Clients 401. The Married Couple 412. The Family Attorney 43

III. Liability to Third Parties 43A. Strict Privity 44B. Balancing of Factors 46C. Third-Party Beneficiary 47D. Foreseeable Reliance 48

Chapter 3 · Establishing the Attorney — Client Relationship 49Establishing the Attorney-Client Relationship 49I. The Role of an Estates and Trusts Attorney 49A. Estate Planner 50B. Estate Administration 50C. Estate Litigation 51

II. The Plan 51A. The Client 52B. Assets and Liabilities 52C. Valuation 53D. Family 53E. Existing Plan and Intestacy 53

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1. Surviving Spouse 542. Issue 553. Parents 564. Collaterals 565. Other 57

III. The Client Interview 58A. Initial Meeting 58B. Fee and Engagement Letter 59C. Mock Interview 60

Chapter 4 · The Last Will and Testament 67The Last Will and Testament 68I. Basic Principles of Wills 68A. Contingencies 69B. Statutory Defaults 701. Survival 702. Simultaneous Death Act 71

C. Domicile 71D. Integration 73

II. Will Formalities 73A. Legal and Testamentary Capacity 731. Legal Capacity 732. Testamentary Capacity 74

B. Statutory Formalities 741. Writing 752. Signed by the Testator or Proxy 753. Attested and Signed by Two or More Credible Witnesses in the Presence of the Testator 75

C. Will Execution Ceremony 77D. Safekeeping 781. Testator Retains Will 782. Attorney Retains Will 783. Will in Safe Deposit Box 794. Will on Deposit with Register of Wills 79

E. Communication 80F. Holographic Will 81

III. Basic Structure of a Valid Will 81A. Dispositive Provisions Section of a Will 821. General Organization of a Dispositive Section 822. Beneficiaries or Legatees 823. Multiple Takers 834. By Representation 845. Survival Condition Imposed on Beneficiary 866. Charitable Bequest 87

B. Details of Dispositive Section 881. Specific Bequest 882. Demonstrative Bequest 923. General Bequest 924. Residuary Bequest 93

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C. Non-Dispositive Provisions Section of a Will 941. Opening Statement 942. Identification of Family Members 953. Funeral Provision 964. Debts and Administrative Expenses 975. Tax-Payment Provision 996. Definitional Provision 1017. Simultaneous Death Provision 1028. In Terrorem Provision 1039. Disinheritance Provision 105

D. Fiduciary Provisions Section of a Will 1171. Fiduciary Powers Provision 1172. Appointment of Personal Representative 1193. Compensation of Personal Representative 1214. Appointment of Guardian 1225. Minors Provision 124

IV. Revocation of Wills 125

Chapter 5 · Trusts 129Trusts 130I. Trust Requirements 131A. Ascertainable Beneficiary 131B. Trust Intent 132C. Trust Property 133D. Lawful Purpose 133E. Formalities 133

II. Parties to a Trust 134A. Settlor 134B. Beneficiaries 134C. Trustee 135

1. Trustee Fiduciary Duties 1362. Selection of Trustee 137

III. Testamentary Trusts 139A. Creation 140B. Funding 140

1. Specific Bequest Held in Trust 1402. General Bequest Held in Trust 1403. Residuary Estate Held in Trust 141

C. Advantages and Disadvantages 141D. Drafting the Testamentary Trust 141

1. Trust Terms 1412. Terms Unique to Testamentary Trust 1423. Dispositive Provisions 1424. Spendthrift Provision 1455. Rule Against Perpetuities 1486. Trustee Appointment and Resignation 1497. Trustee Powers 1508. Trustee Compensation 1549. Trustee Bond 155

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10. Premature Termination 156IV. Inter Vivos Revocable Trust 156A. Creation 157B. Funding 158

1. Additions to Trust 158C. Advantages and Disadvantages 159D. Drafting the Revocable Trust 159

1. Purpose of the Trust 1592. Terms Unique to the Revocable Trust 1613. Dispositive Provisions on Death of Settlor 1634. Spendthrift Provision 1665. Rule Against Perpetuities 1676. Trustee Appointment and Resignation 1677. Trustee Powers 1688. Trustee Compensation 1709. Trustee Bond 17110. Premature Termination 17111. Acceptance by Trustee 17212. Selection of Forum 172

V. Irrevocable Trust Agreement 173A. Creation 173B. Funding 173

1. Additions to Trust 173C. Advantages and Disadvantages 174D. Drafting the Irrevocable Trust Agreement 175

1. Purpose of the Trust 1752. Terms Unique to the Irrevocable Trust Agreement 1753. Dispositive Provisions 1774. Spendthrift Provision 1785. Rule Against Perpetuities 1796. Trustee Appointment and Resignation 1797. Trustee Powers 1808. Trustee Compensation 1829. Trustee Bond 18310. Premature Termination 18311. Acceptance by Trustee 18312. Selection of Forum 18413. Limitation of Powers 18414. Insurance Policies 184

Chapter 6 · Transfer Taxes 187Transfer Taxes 187I. Overview of the Transfer Taxes 188A. Gift Tax 188B. Federal Estate Tax 189C. Maryland Estate Tax 189D. Generation-Skipping Transfer Tax 189E. Historical Summary of the Transfer Taxes 190

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II. The Federal Gross Estate 192A. Probate Property 192B. Property Transferred During Life 192C. Special Assets 194

III. Taxable Estate 198A. Marital Deduction 198

IV. Valuation 199A. Deviations from Willing Buyer/Willing Seller Standard 199B. Valuation Discounts 199C. Actuarial Tables 200D. Alternate Valuation 200

V. Basic Estate-Tax Planning 200A. Goals 2011. Avoid or Minimize Transfer Taxes 2012. Defer Transfer Taxes 201

B. Estate-Planning Tools 2021. Non-Taxable Gifts 2022. Credit Shelter Trust 202

Chapter 7 · Non-Taxable Gifts 211Non-Taxable Gifts 211I. Taxable Gift 212A. Gifts in General 212B. Taxable Gift 212C. Filing Requirements 213

II. Income Tax Basis 214A. Asset Selection Considerations 215

III. Inter Vivos Transfers Between Spouses 215IV. Gift Tax Exclusions 216A. Annual Exclusion 2161. Present Interest Requirement 2172. Gift-Splitting by Spouses 217

B. The Educational and Medical Exclusions 218V. Methods of Inter Vivos Gifting 220A. Outright Gifts 2201. Gifts by Check 2212. Gifts to Minors 221

B. Gifts in Trust 2221. Crummey v. Commissioner 2222. Hanging Power 2263. Multiple Beneficiaries 2274. Minor’s Trust 229

VI. Special Rules for Certain Gifts Made in Contemplation of Death 230

Chapter 8 · Credit Shelter Trust 231Credit Shelter Trust 231I. Exemption Amounts 232A. Gift Exemption Amount 2321. Gift Exemption Amount Chart 233

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B. Death Exemption Amounts 2331. Federal Exemption Amount 2332. Maryland Exemption Amount 234

II. Credit Shelter Trust 235A. Purpose 235B. General Power of Appointment Exceptions 2361. Ascertainable Standard 2362. Five-or-Five Limitation 2373. Substantial and Adverse Interest Exception 238

C. Inter Vivos Credit Shelter Trust 239D. Funding the Credit Shelter Trust with a Formula 2401. Pecuniary Formula 2402. Fractional Formula 241

E. Disclaimer Funding 242F. Trust Terms 2441. Income 2442. Principal Distributions 2453. Fiduciary Provisions 245

III. Planning with Portability 246

Chapter 9 · Marital Deduction 249Marital Deduction 250I. Marital Deduction 251II. I.R.C. § 2056 251A. I.R.C. § 2056(a) Requirements 2521. Citizenship Requirement 2522. Surviving Spouse Requirement 2523. Gross Estate Requirement 2524. Passing Requirement 253

B. Terminable Interest Limitation 2531. Surviving spouse’s interest terminates 2532. Interest passes from decedent to someone other than the surviving spouse 253

3. Non-spouse receives property 253C. Exceptions to the Terminable Interest Rule 2541. Limited Survival Contingency 2542. Life Estate with General Power of Appointment in Surviving Spouse 2543. Qualified Terminable Interest Property 255

III. Outright Marital Deduction 255IV. Marital Trusts 257A. Estate Trusts 2571. Requirements 258

B. Life Estate with Power of Appointment Trust 2581. Requirements 259

C. QTIP Trust 259D. Comparison of Marital Trusts 260

V. QTIP Trust 261A. Passing Requirement 261B. Qualifying Income Interest Requirement 262

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1. Income to surviving spouse for life 2622. No general power of appointment in anyone during the surviving spouse’s life 262

C. Election Requirement 2631. Clayton v. Commissioner 2642. QTIP Advantages and Disadvantages 266

VI. Maryland-Only QTIP 268

Chapter 10 · Irrevocable Life Insurance Trust 269Irrevocable Life Insurance Trust 269I. Federal and Maryland Statutes 270A. I.R.C. § 2042 Proceeds of Life Insurance 2701. Receivable by Executor 2702. Incidents of Ownership 271

B. I.R.C. § 2035 Transfers in Contemplation of Death 272C. Maryland Statute and the Insurable Interest 272

II. Funding the ILIT 273A. Initial Transfer of an Existing Policy 2731. Existing policy 2742. New Policy 274

B. Subsequent Transfers to the ILIT 2741. Crummey Requirements 2752. Five-or-Five Limitation 2753. Hanging Power 275

III. The Irrevocable Life Insurance Trust (ILIT) 275A. Creation 276B. Funding 276C. Advantages and Disadvantages 277D. Drafting the ILIT 278

1. Purpose of Trust 2782. Terms Unique to an ILIT 2783. Dispositive Provisions 2794. Spendthrift Provision 2805. Rule Against Perpetuities 2806. Trustee Appointment and Resignation 2807. Trustee Powers 2818. Trustee Compensation 2819. Trustee Bond 28110. Premature Termination 28111. Acceptance by Trustee 28212. Selection of Forum 282

Chapter 11 · Elder Law 283Elder Law 284I. Representing an Elderly Client 284II. Federal Government Programs 286A. Social Security 286B. Disability Benefits 288C. Supplemental Security Income 289

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D. Medicare 2901. Medicare Part A 2902. Medicare Part B 2913. Medicare Part C – “Medicare Advantage” 2924. Medicare Part D – “Medicare Prescription Drug Benefit” 293

E. Medicaid 293F. Veterans Benefits 2941. Aid and Attendance 295

III. State Government Programs 296A. Older Americans Act Programs 296B. Maryland State Programs outside the Older Americans Act Programs 2981. Senior Care 2982. Senior Center Plus 2983. Congregate Housing Services Program 2994. Senior Assisted Living Group Home Subsidy 2995. Medicaid Home and Community Based Waiver 300

IV. Housing Options for Elderly Client 300A. Assisted Living 301B. Nursing Home Care 302C. Continuing Care Retirement Community 304

V. Preparing for Disability 304A. Power of Attorney 305B. Health Care Decision Making 3051. Advance Medical Directive 3062. Surrogate Decision-Making 3063. Medical Orders for Life-Sustaining Treatments 307

C. Guardianship 307VI. Financial Arrangements for the Elderly Client with Liquidity Concerns 308A. Reverse Mortgages 3081. What to Consider with a Reverse Mortgage 309

B. Life Estate Without Powers of Sale 310VII. Elder Abuse 311A. Elder Abuse Defined 312B. Maryland’s Civil and Criminal Elder Abuse Laws 313C. Nursing Home Abuse 314D. Elder Justice Act of 2010 315

Chapter 12 · Medicaid 317Medicaid 317I. Initial Meeting with Applicant 318II. Medicaid Eligibility 319A. Residency 319B. Citizenship 319C. Aged, Blind or Disabled 319D. Medical Eligibility 3201. Level of Care 320

E. Financial Eligibility 3211. Income Eligibility 3212. Asset Eligibility (Resource Eligibility) 321

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F. Exempt Transfers 323III. Application Process 325A. Application and Documentation 325B. Filing the Application 326

IV. Appeal 326V. Post-Eligibility Issues 327A. Cost of Care Contribution 327B. Community Spouse-Maintenance and Shelter Allowance 327C. Annual Recertification 328D. Reporting Requirements 328

Chapter 13 · Guardianship 329I. Overview 330II. Guardianship of the Person and/or Property 332A. Who Can Petition for Guardianship 332B. Where to File the Guardianship 333C. What Steps are Required for Guardianship 3341. Good Faith Basis of Need 3342. Certificate of Incapacity 3343. Petition 3354. Representation 3355. Service of Process 336

III. Petition for Guardianship of the Person 336A. Burden of Proof and Trial 336B. Grounds for Appointment 337C. Contents of the Petition for Guardianship of the Person 337

IV. Petition for Guardianship of the Property 337A. Burden of Proof and Trial 337B. Grounds for Appointment 337C. Contents of Petition for Guardianship of the Property 338

V. Role of the Court-Appointed Attorney 340A. In Re Sonny Lee 340

VI. Going to Court 342A. Burden of Proof 342B. Uncontested Cases 343C. Contested Cases 343D. Representing an Interested Person 344

VII. Costs and Fees 344A. Costs and Fees for Guardianship 344B. Fees for the ADP’s Attorney 345C. Fees for the Guardian of Property 345

Chapter 14 · Estate Administration 347I. Overview 348A. Administrative Probate/Judicial Probate 348

II. The Personal Representative 350A. Identifying the Personal Representative 350B. Representing the Personal Representative 351C. Personal Representative Commissions 351

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D. Duties of the Personal Representative 352III. Types of Estates for Administration 352A. Small Estate 352B. Modified Administration 353C. Regular Estate 354

IV. Estate Administration Process 355A. Opening the Estate 3551. Last Will and Testament 3562. Death Certificate 3573. Petition for Probate 3574. Notice of Appointment 3585. Bond of Personal Representative 3596. List of Interested Persons 360

B. Inventory and Information Report 3611. Inventory 3612. Information Report 3633. Appraisals 364

C. Accounts 3651. Final Account 3662. Assets Previously Reported 3673. Disbursements and Payments 3674. Distributions 3695. Reconciling the Account 3696. Administrative Accounting for Small Estates 3697. Administrative Accounting for Modified Administration 3698. Notice of Filing of Account for Regular and Modified Administration 3709. Closing the Estate 370

D. Distributions 3711. Probate Assets 3722. Distributions to Minors 3733. Distributions to Trusts 373

E. Personal Representative Commissions and Counsel Fees 374

Chapter 15 · Will Caveats 377I. Preliminary Procedural Issues 378A. Proper Parties 378B. Jurisdiction and Venue 379C. Standing 379D. Limitations 381E. Procedural Aspects and Effect of Filing Petition 382

II. Grounds to Caveat a Will 384A. Lack of Formalities – Improper Execution 3841. In Writing 3852. Signed by Testator 3853. Attested by Two Credible Witnesses 386

B. Revocation of Will 387C. Capacity 3871. Mental Capacity – Of Sound Mind 3872. Presumption of Mental Capacity 387

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3. Insane Delusion 3884. Evidentiary Issues 389

D. Undue Influence 3931. In General 3932. Factors 3952. The Will Contains Substantial Benefit to the Beneficiary 3973. The Beneficiary Caused or Assisted in Effecting Execution of Will 3974. There was an Opportunity to Exert Influence 3975. The Will Contains an Unnatural Disposition 3986. The Bequests Constitute a Change from a Former Will 3987. The Testator was Highly Susceptible to the Undue Influence 398

E. Fraud 400III. Additional Matters for Consideration 401A. Discovery 401B. Trial 4021. Procedural Issues 4022. Burden of Proof 4033. Evidentiary Issues 4034. Dead Man’s Statute 4035. Hearsay 404

C. Settlement 404D. Appeal 405

Appendix

Chapter 1 · OverviewForm 1-1: Supplemental Power of Attorney 409Form 1-2: Advance Medical Directive 414

Chapter 2 · Ethical Issues in Estate PlanningForm 2-1: Joint Retainer Agreement 417

Chapter 3 · Establishing the Attorney— Client RelationshipForm 3-1: Estate Planning Data Form 420Table 3-1: Table of Consanguinity 428

Chapter 4 · The Last Will and TestamentForm 4-1: Last Will and Testament 429Form 4-2: Codicil 434

Chapter 5 · TrustsForm 5-1: Will with a Testamentary Trust 435Form 5-2: Inter Vivos Revocable Trust 446Form 5-3: Irrevocable Trust Agreement 454Table 5-1: Present and Future Interests 462

Chapter 6 · Transfer TaxesTable 6-1: Exemption Amounts 463Table 6-2: Gift Tax Table 464Table 6-3: Determination of Taxable Estate and Estate Tax Liability 466

Chapter 7 · Non-Taxable GiftsForm 7-1: Minor’s Trust — I.R.C. 2503(c) 467

Chapter 8 · Credit Shelter TrustForm 8-1: Will with Credit Shelter Trust 475

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Chapter 9 · Marital DeductionForm 9-1: Will with QTIP Trust 487

Chapter 10 · ILITForm 10-1: Irrevocable Assignment 499

Chapter 11 · Elder LawForm 11-1: VA Form 10-10EZ Application for Health Benefits 500Form 11-2: Nursing Home Transmittal No. 213 503Form 11-3: Medical Assistance Eligibility Review Form 3871B 506Form 11-4: MOLST Form 510

Chapter 12 · MedicaidForm 12-1: Checklist for Medicaid Applicant 512Form 12-2: Medicaid Application 513

Chapter 13 · GuardianshipForm 13-1: Checklist for Guardianship 531Form 13-2: Certificate of Incapacity 533Form 13-3: Order to Show Cause 536Form 13-4: Advice of Rights 537Form 13-5: Notice to Interested Persons 539

Chapter 14 · Estate AdministrationForm 14-1: Probate Timeline 540Form 14-2: Fee Petition 541

Chapter 15 · Will ContestsForm 15-1: Petition to Caveat 544Form 15-2: Petition to Transmit Issues 547Form 15-3: Consent Order 550Form 15-4: Settlement Agreement and Limited General Release 552Form 15-5: Petition for Ratification of Agreement 556Form 15-6: Joint Stipulation of Dismissal of Caveat 560

Index 563

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Md. Code Regs. 10.07.14.13, 302Md. Crim. Law § 3-606, 314Md. Est. & Trusts § 1-101(i), 360Md. Est. & Trusts § 1-210, 55, 56, 84Md. Est. & Trusts § 3-102, 54Md. Est. & Trusts § 3-103, 55Md. Est. & Trusts § 3-104, 56, 57Md. Est. & Trusts § 3-110, 55Md. Est. & Trusts § 3-203, 106Md. Est. & Trusts § 3-205, 105Md. Est. & Trusts § 3-301 116Md. Est. & Trusts § 3-302, 116Md. Est. & Trusts § 4-101, 74Md. Est. & Trusts § 4-102, 75Md. Est. & Trusts § 4-103, 81Md. Est. & Trusts § 4-104, 72Md. Est. & Trusts § 4-105, 125Md. Est. & Trusts § 4-106, 126

Md. Est. & Trusts § 4-201, 80Md. Est. & Trusts § 4-202, 356Md. Est. & Trusts § 4-401, 70Md. Est. & Trusts § 4-403(a), 70Md. Est. & Trusts § 4-406, 98Md. Est. & Trusts § 4-407, 94Md. Est. & Trusts § 4-413, 104Md. Est. & Trusts § 5-103, 355Md. Est. & Trusts § 5-104, 350Md. Est. & Trusts § 5-105(b), 350Md. Est. & Trusts § 5-207, 381Md. Est. & Trusts § 5-708, 354Md. Est. & Trusts § 5-801, 357Md. Est. & Trusts § 6-101, 351Md. Est. & Trusts § 6-203, 120Md. Est. & Trusts § 6-403, 384Md. Est. & Trusts § 7-103.1, 358Md. Est. & Trusts § 7-201, 362

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Table of Statutes

United States Statutes and Regulations

I.R.C. § 1014, 26, 215I.R.C. § 1015, 26, 214I.R.C. § 2010(c), 246I.R.C. § 2035, 22, 193, 272I.R.C. § 2036, 193I.R.C. § 2037, 194I.R.C. § 2038, 194I.R.C. § 2039, 194I.R.C. § 2040, 195I.R.C. § 2041, 195I.R.C. § 2042, 18, 196, 270I.R.C. § 2044, 197

I.R.C. § 2056, 198I.R.C. § 2056(b)(7), 261I.R.C. § 2503(b), 25, 217I.R.C. § 2503(c), 229I.R.C. § 2503(e), 26I.R.C. § 2513(b)(2), 218I.R.C. § 2514(e), 226I.R.C. § 2518(b), 242Treas. Reg. 20.2042-1(c)(2), 196Treas. Reg. § 25.2503-6(b)(2), 219Treas. Reg. § 25.2503-6(b)(3), 219

Maryland Statutes and Regulations

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xx TABLE OF STATUTES

Md. Est. & Trusts § 7-202, 364Md. Est. & Trusts § 7-601, 121Md. Est. & Trusts § 8-103(a), 99Md. Est. & Trusts § 8-106(b), 96Md. Est. & Trusts § 9-103(b), 82Md. Est. & Trusts § 11-102(b)(5), 149Md. Est. & Trusts § 13-705, 334Md. Est. & Trusts § 15-102, 150Md. Est. & Trusts § 17-105 (a)(b)(c), 10

Md. Est. & Trusts §§ 4-201, 80Md. Est. & Trusts 8-103, 368Md. Estates & Trusts § 13-218, 345Md. Fin. Inst. § 1-204, 24Md. Health-Gen. § 5-601, 14Md. Tax-Gen. § 7-202, 19Md. Tax-Gen. § 7-203, 19Md. Tax-Gen. § 7-308, 100Unif. Probate Code § 2-503, 74

Maryland Rules of Professional Conduct

Rule 1.1., 30Rule 1.14, 37, 285, 330Rule 1.18(b)–(d), 38Rule 1.2(a), 32Rule 1.3, 32Rule 1.4, 33Rule 1.5(a), 34Rule 1.6, 35

Rule 1.7, 36Rule 1.8, 36Rule 5-701, 392Rule 5-702, 391Rule 6-431(c), 382Rule 10-106(a), 345Rule 10-107(a), 345

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Preface and Acknowledgments

This book brings the practical aspect of wills, trusts and estates into the classroom forstudents, and also serves as a practitioner’s resource for estate planning in Maryland. Thebook will be useful for estate-planning drafting courses, and, with a case supplement, forthe basic course in wills, trusts and estates.

The book is divided into three parts. Part 1 applies to all estate planning, and addressesaspects of estate planning applicable to an estate of any size. The coverage in this sectiondeals with ethical issues, the client interview, and the drafting of estate-planning documentsincluding the Will, the Will with a testamentary trust, inter vivos trusts, powers of attor-ney, and advance medical directives.

Part II covers federal and Maryland estate transfer taxes, which apply when the clients’net worth exceeds one-million dollars. This section provides an overview of the trans-formation of transfer taxes, and a discussion of the applicable Internal Revenue Codeprovisions. The focus is on estate-planning tools that avoid, minimize, and defer transfertaxes. These include non-taxable gift giving in trust, the use of federal and state exemp-tion amounts in a credit shelter trust, the unlimited marital deduction in a QTIP trust,and the irrevocable life insurance trust. A chapter is devoted to each estate-planning tooland provides a commentary along with charts articulating the advantages and disadvan-tages of the respective estate-planning tool.

Finally Part III represents a variety of topics ancillary to estate planning, includingelder law, Medicaid, guardianship, estate administration and Will caveats. The Part IIItopics were contributed by practitioners who are experts in their respective fields. Theyprovide a general overview of each topic and specific guidance in those areas of law forthe estate-planning attorney .

The book provides sample provisions, intake forms, and checklists that can be used aseducational tools or in the practice of law. There are complete forms in the Appendix thatallow the student or lawyer to examine the relevant discussion in a complete format. Inaddition, the book provides a series of problems intended to engage law students in theirstudy of wills, trusts and estates.

Acknowledgments

I would like to acknowledge and thank Jason A. Frank and his law clerk Sage Graham,Alisa Chernack, Ria P. Rochvarg, Victoria L. Grace and Michaela Cavanaugh Muffolettofor contributing chapters on elder law, guardianship, Medicaid, estate administration andWill caveats. Their expertise and willingness to make such contributions made coverageof these topics possible.

Special thanks to my current research assistant Brittany Ellwanger and my previousresearch assistants Lisa Yurwitt, Kristy Nunley, and Wendy Parcells Marshall for their ex-

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tensive and excellent research and writing. Thanks to my student Nicholas Young for hisassistance with Bluebook citations. Thanks to my administrative assistant Laurie Schnitzer,who assisted me in submitting the final manuscript. Many thanks to my dedicated copyeditor and former student, Phyllis A. Book, for her willingness to contribute, edit, andproofread the entire book. Thanks to my colleagues Charles S. Winner, Linda A. Schwartz,Richard T. Wright, Frank S. Baldino, Daryl J. Sidle, and others who read portions of thebook and provided insightful comments. Thanks also to my former students RobertMooney and Octavia Parks, who volunteered their time to assist me in this project.

I am grateful to my husband, Howard Lenzer, my daughter, Valarie, and my son, Brian,for their love, support, and the sacrifices they made to allow me the time to work on thebook.

Lastly I would like to thank my parents, Honorable Joseph F. Vallario, Jr. and MaryElise Vallario, whose support and encouragement gave me the strength to make this pos-sible.

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