Estate Planning

In Maryland, a will can be contested by an interested party, such as a beneficiary or heir, if there are legitimate grounds. Common reasons for contesting a will include lack of testamentary capacity, undue influence, fraud, or failure to meet legal requirements. The challenge must be filed within 6 months of a personal representative being appointed. The process involves submitting a formal petition to the Orphan’s Court, presenting evidence, and possibly appealing the decision if the challenge is unsuccessful.

Selecting a personal representative (PR) for your will is crucial. The PR ensures the will’s terms are carried out, managing debts and distributing assets. Trust, dependability, and competency are essential qualities in a PR. It's also important to consider how the PR’s relationship with other beneficiaries might affect the process. Careful selection is key to avoiding issues during estate administration.

In Maryland, estate administration involves handling a decedent’s assets and debts. If the decedent had a viable will, the estate process is simpler, as the will provides instructions for distribution. The will must be filed with the Registry of Wills or the Orphan’s Court, and a personal representative is appointed to manage the estate. If there’s no will, the estate is handled according to Maryland’s intestacy laws. The personal representative pays debts and distributes assets, following the will or intestacy rules. Estates under $50,000 are considered small, while those above are regular, with some exceptions for spouses.

In Maryland, a trust is created through a "declaration of trust," where the trustor transfers assets to a trustee who manages them for the beneficiaries. The trustee assumes a legal obligation to follow the trustor's instructions. Trusts can end when a beneficiary passes away, a set date or event occurs, or when assets are determined to belong to the beneficiary. The Maryland Discretionary Trust Act provides rules for creating and managing trusts.

Direct transfer ownership is an essential estate planning tool that allows Marylanders to transfer assets outside of probate. There are three key subtypes: beneficiary designations, which apply to life insurance policies and retirement accounts; payable/transfer on death accounts, used for bank and brokerage accounts; and revocable/irrevocable trusts, which provide flexible asset distribution.

Life estate interests provide present possessory rights to the holder while allowing the original owner to control future ownership. This structure is commonly used in estate planning to ensure that property ultimately passes to a designated beneficiary. The main advantages include limited ownership control and predetermined future distribution. However, the downsides include increased legal complexity and a trend against limited ownership structures due to their technical nature.

Marylanders can hold title to property in different ways, impacting estate planning. Individual ownership gives full control but requires inclusion in a will for smooth distribution. Co-ownership structures include tenancy-in-common (TIC), allowing fractional interests with flexibility, and joint tenancy with rights of survivorship, where ownership automatically transfers to surviving co-owners, avoiding probate.

A last will and testament in Maryland consists of several key sections. It begins with a declaration of intent, which certifies the creator’s wishes. The next sections identify family members and beneficiaries, followed by the executor (personal representative). The will then outlines real and personal property bequests, specifying how assets are distributed.

Tenancy-in-common (TIC) is a form of property ownership in Maryland where multiple individuals or entities hold undivided interests in real estate. TIC interests can be freely transferred, lack a right of survivorship, and may be included in a will. They are often used for investment purposes, including revenue-generating properties, and can be involved in a 1031 exchange to defer capital gains taxes.

A trustor (also called a settlor) creates a trust to control asset distribution, appointing a trustee to manage it under a fiduciary duty. Trustees must follow trust instructions, ensuring assets are used as intended. Breaching fiduciary obligations can lead to serious consequences, including financial restitution, removal, and even criminal charges.

Wills are highly customizable, with each will having a structure tailored to the creator’s specific preferences and estate. One key section in a will is the Identification of Executor/Personal Representative, which must clearly identify the individual appointed to manage the estate, including their full name, address, and phone number, as well as any alternates.

Estate planning in Maryland involves more than just financial aspects; it covers various documents designed to serve specific purposes. A Last Will & Testament allows for the detailed distribution of assets and avoids intestacy. An Advance Directive (medical power of attorney) allows individuals to plan healthcare decisions in advance by naming agents to make choices when needed.

In Maryland, powers of attorney (POAs) come in various forms, with medical POAs referred to as "advance directives." These allow individuals to make healthcare decisions for someone else, following detailed instructions set by the principal. Advance directives, also known as living wills, provide clarity on life-sustaining treatments and healthcare decisions.

A Power of Attorney (POA) is a legal arrangement granting an agent authority to act on behalf of a principal in specific matters, such as medical or financial decisions. In Maryland, creating a valid POA requires adherence to several legal requirements, including the principal's capacity, witness signatures, notarization, clarity of terms, and compliance with the Maryland POA Act. This document must be written, witnessed, and notarized to ensure its enforceability and authenticity.

Creating and periodically updating a will is an essential step in estate planning, allowing individuals to ensure their assets are distributed according to their wishes rather than default intestacy laws. Life changes, including shifts in financial circumstances, relationships, or personal goals, often make it necessary to amend a will. Updates can help reflect current financial realities, evolving relationships with beneficiaries, and changing goals for asset allocation, such as setting up trusts or specifying asset usage. Regular revisions ensure a will aligns with the creator's intentions over time.

Trusts and wills are essential tools in estate planning. A will ensures that a person's assets are distributed according to their wishes, while trusts provide an additional layer of control over how those assets are used.