Frequently Asked Questions About Estate-Planning
Do I need an attorney to draft my will or trust?
Maryland’s laws do not require you to hire an attorney to draft your will or trust. However, simply because the law does not force you to hire an attorney does not mean that you should try to draft your will or trust yourself. DIY wills and DIY trusts often contain mistakes that result in unnecessary costs, time, and stress for heirs and beneficiaries. Wills and trusts must contain all required elements under Maryland’s laws to be valid. Also, a will or trust must be executed correctly to be valid.
In addition, an estate-planning attorney can help you structure your estate plan to minimize estate and inheritance taxes, protect your assets from creditors, and carry out your wishes regarding the distributionof assets.
What can happen to my family if I die without a will?
If you die without a valid will, Maryland’s intestate laws determine how your property is distributed. The state chooses your heirs and dictates the percentage of your estate that each heir is entitled to receive. Therefore, the state is in control of how property is distributed instead of you or your family making these decisions. You can avoid this by talking to an estate-planning attorney and creating a will now.
Do I need a living trust?
A living trust is used to hold title to your assets during your lifetime. The trust is administered for your benefit until your death. Upon death, the assets within the trust are distributed to beneficiaries according to the terms of the trust agreement. You can serve as the trustee during your lifetime thereby retaining control over the assets. A living trust can protect your assets from creditors, provide for your care if you become incapacitated, and avoid probate for the assets within the trust.
While living trusts can be beneficial for some people, there are some drawbacks to living trusts. Therefore, you may want to discuss living trusts in detail with an estate-planning attorney before deciding if a living trust is right for you.
What should I do in the first week after the death of a loved one?
The first few days after a loved one dies can pass by in a blur. For most families, the week after the death of a loved one focuses on making final arrangements, caring for family members, and grieving. In addition to preparing for the funeral and managing immediate needs, you also need to prepare to finalize your loved one’s financial affairs.
You need to locate important documents such as your loved one’swill, trust agreements, Social Security card, life insurance policies, title to property, financial account statements, and statements for debts. You may also need to secure your loved one’s property to ensure no one takes property that may not be leftto them in the will. You should notify the Social Security office and insurance companies. You can stop paying health insurance and car insurance policies.
As the weeks continue, you may need to open a probate estate, continue to gather documents, and distribute trust property. It can be overwhelming to handle a loved one’s estate, but a probate attorney can make the process less stressful and less time-consuming.
Who can serve as a fiduciary for financial matters?
A fiduciary is required to act in the best financial interest of the beneficiary or principal. The fiduciary must take steps to take the most prudent care of a beneficiary’s or principal’s assets, including financial accounts. A trustee, personal representative, or guardian may serve as a fiduciary of financial accounts as they execute their duties and responsibilities under an estate, trust agreement, guardianship, or conservatorship.
Can I limit the amount my spouse gets under my will?
In Maryland, your spouse can claim an elective share of your estate even if you attempt to limit the inheritance or disinherit your spouse. Under Maryland law, your spouse can claim one-third of your estate if you have surviving children, grandchildren, or great-grandchildren. If you do not have any surviving children, grandchildren, or great-grandchildren, your spouse can claim one-half of your net estate. The net estate is the property passing under your will. Therefore, if you want to limit a spouse’s inheritance, you might want to consider placing property in trust. Before taking any steps to limit the inheritance of a spouse, seek the advice of a trusted estate-planning attorney.
Are there benefits to going through probate?
There are some reasons why you may want to go through the probate process. An advantage of filing a probate estate is to abbreviate the creditors period for filing claims against a person’s assets. In addition, filing a probate estate can resolve claims by unknown creditors and heirs. Once the period for filing claims expires, creditors and heirs who did not assert a claim no longer have a legal claim to the assets in the estate.
Another reason to probate an estate is to settle disagreements between heirs. In some cases, family members may dispute the will or disagree on how property should be divided if there is not a will. The probate process can resolve these disputes in a legal forum with the assistance of a probate judge.
Are there ways to avoid going through probate?
Even though there may be some advantages of going through probate, the probate process may not be necessary in every case. There are ways to avoid probate, including the use of trust agreements and titling property jointly with another person. You can also avoid probate for certain assets that pass directly to heirs through a beneficiary designation, such as life insurance proceeds and retirement accounts.
How can I protect my child who has a mental health or addiction issue?
Employers are required by law to withhold payroll taxes from the wages of their employees, including There are a few ways you can protect a child who has an addiction issue or has special needs. Depending on the circumstances, you might be able to use a Special Needs Trust to provide for your child while protecting his or her eligibility for government benefits. You can also name a trustee in your will to manage the inheritance for a beneficiary or set up a trust outside of your will for that purpose.
Do I need a business succession plan?
Yes, if you own a business, you typically need a business succession plan. A business succession plan is a detailed strategy for exiting a business. A comprehensive business succession plan includes strategies and contingencies for your retirement, illness, and death. In addition to providing instructions for the smooth transition of ownership and management, a business succession plan allows you to create a long-term plan for the future.
How long does the probate process take?
Typically, an estate takes nine-months to administer, but can take longer depending upon the complexity of the estate, whether the will is contested, and several other factors. In some cases, the estate may currently qualify as a small estate if the value of the assets is $50,000 ($100,000 if a surviving spouse inherits the property). A simplified or small estate is often closed within two months. The process can take even longer if you do not utilize an experienced probate attorney.
How much does probate cost?
Maryland probate fee is roughly 0.1% of the size of the probate estate. Maryland statute limits the combined attorney's fees and personal representative commissions to roughly 3.6% of the probate estate. From my own personal experience, my fee usually is in the range of 1.5% to 2% of the probate estate. Typically, the probate estate also incurs fees related to posting notices, securing a bond, property appraisals, etc.