How can I avoid Probate?
What is Probate?
Probate is a legal process that takes place after someone dies. It includes filing a deceased person’s will along with probate paperwork in the county the person was domiciled, identifying and appraising the assets, publishing appointment notice in the local newspaper, preparing court inventory and accounting(s) among other things.
Should I plan to avoid probate?
Absolutely. Probate rarely benefits your beneficiaries, and it always costs them a lot of time and money.
How can I avoid probate?
There are several ways to avoid probate:
- Revocable Living Trust
A Revocable Living Trust is a legal document that you can change whenever you want (hence, revocable). In it you name: a trustee (usually you) to handle your assets during your life, and a successor trustee(s) to handle your assets when you can no longer do so. Initially a trust has nothing in it, and the key to a Living Trust is to fund the trust with your assets, which you do by retitling assets. It is important to think about which assets should be in your trust and which should not.
After your death the trust property is not part of your probate estate. It is, however, part of your estate for Maryland, District of Columbia and federal estate tax purposes and for Maryland inheritance tax purposes. (Note that we only represent Trustees, Personal Representatives and Executors in Maryland, Virginia and the District of Columbia. For any other state please consult with your local probate lawyer concerning your state-specific tax laws).
- Pay-on-Death (POD) or Transfer-on-Death (TOD) accounts
Many financial institutions let you designate beneficiaries (for example, bank and retirement accounts often provide this feature). When you die, the money goes directly to the intended beneficiary. Just like with trust assets, these assets are not subject to the probate but are countable for estate and inheritance tax purposes (if any).
- Assets owned jointly with someone else
Some (not all) joint forms of ownership will avoid probate (but not taxes, if applicable) when one of the owners dies. When properly titled, the assets go to the surviving joint owner(s).
- Irrevocable Trust
You no longer own the assets in your irrevocable trust and have no right to change the disposition of the trust. On a plus side, your creditors can’t reach that trust’s assets and the assets are not subject to the estate taxes.
Do I have to file a will in the state of Maryland, if the decedent had no probate assets?
Under Maryland Law, the decedent's Will must be filed in the county of the decedent’s domicile.
We publish this information for general information purposes only; it is not legal advice and is not a substitute for consulting an attorney.
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