Frequently Asked Questions
about Estate Planning in Maryland and the District of Columbia
What is Probate?
Probate is the court process that looks after people who cannot make their own personal, health care and financial decisions. These people fall into three general categories: minor children, in Maryland and the District of Columbia that would be those under 18; incapacitated adults; and people who have died with wills or without wills. Probate proceedings can be expensive and time-consuming in the District of Columbia and Maryland. Additionally, the court proceeding and associated documents are all a matter of public record. As a result, many people choose to avoid probate by creating a revocable trust. A revocable trust unlike a will, avoids probate, keeps the decedent’s personal affairs private, and eliminates the time and costs associated with the probate process.
WHAT IS JOINT TENANCY WITH RIGHTS OF SURVIVORSHIP?(IN MARYLAND AND THE DISTRICT OF COLUMBIA “TENANCY BY THE ENTIRETY” WHEN BETWEEN SPOUSES)
This is the most common form of asset ownership between spouses. Joint tenancy (or tenants by the entirety) has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse should not add the names of other relatives as owners of their assets, doing so, makes their assets available to the creditors of the other relative. As a result, the surviving spouse could see their assets used to pay the debts, bankruptcies, divorces and/or lawsuits of the relative they made a joint owner.
What is a Will?
A Will is the document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the will maker dies and the original Will is delivered to the Probate Court. Still, everyone with minor children should at least have a Will. It is the only way for you to control who is appointed to be the new “parent” of your orphaned child. Special testamentary trust provisions in a Will can provide for the management and distribution of assets for your heirs; in particular, protection may be provided to disabled children. A carefully crafted Will can also help keep money in the family bloodline, protected from divorce.
What is a Living Will?
Living wills are the same in the District of Columbia and Maryland. Although a Maryland living will may also be called an Advance Medical Directive. A living will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself. Oftentimes a living will is executed at the same time as a Power of Attorney for Health care, which gives someone legal authority to make health care decisions for you when you cannot do so. Similarly, a Durable Power of Attorney allows someone to make financial decisions for you when you cannot make them for yourself.
Do I need a Will?
The importance of creating a Will is something that cannot and should not be downplayed. If you are on the fence about whether or not to create a Will, consider if you trust the State of Maryland or the District of Columbia, to determine how much each of your relatives receive. Do you want them to choose your executor or the guardian for your children. If you want to decide how to distribute your assets and legacy after death, then you need to put it down in writing. The creation of a Will allows you to choose who will inherit your wealth, and most importantly, who will raise your children. It allows you to control the circumstances surrounding the distribution of these assets and the raising of your children, as well.
By creating a Will, you reduce the chances that the wrong person will distribute your property, inherit your wealth, or raise your children. We can work with you to create an estate plan that provides the protection you need.
What does Intestacy mean?
If you die without a Will (intestate), the legislature of Maryland or the District of Columbia has already determined who will inherit your assets and when they will inherit them. You may not agree with their plan, but roughly 70 percent of Americans currently use it.
What are Beneficiary Designations?
You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and bank accounts.
What is a Durable Power of Attorney and when do I need one?
A Durable Power of Attorney allows you to appoint someone you know and trust to make your personal financial decisions when you cannot do so. If you are incapacitated without these legal documents, because of an accident for example, then you may be involved in a probate proceeding, where a judge determines who should make these decisions for you under the ongoing supervision of the court.
What is a Revocable Living Trust?
A Revocable Living Trust is a contractual agreement with three parties: the Trust-makers, the Trustees (or Trust Managers), and the Trust Beneficiaries. It replaces a Will and can be revoked until the trust maker dies. A person may initially serve all three roles, by: creating a trust, managing all the assets transferred to the trust, and having full use and enjoyment of all the trust assets as a beneficiary. The Revocable Living Trust can also grant a successor trustee the power to manage the assets should the trust maker become incapacitated or die. And, it allows the trust maker more flexibility to do complex estate planning provisions for distributions to heirs.
Who Should Have a Revocable Living Trust?
Whether you are young or old, rich or poor, married or single, if you owned titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan. It also allows for greater flexibility in providing more complex timing and control of the circumstances under which distributions are made to the beneficiaries of the trust.