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Estate planning

What is an estate plan?
What is a Will and why should I have one?
What happens if I die without a Will?
When should I change my Will?
Where should I keep my Will?
Can I simply handwrite my own Will?
Is there property that passes outside the scope of a Will?
Who is a personal representative?
What is a Power of Attorney?
When does a Power of Attorney take effect and how long does it last?
Is there a difference between a general power of attorney and a limited power of attorney?
What is an Advanced Directive?

Estate Administration

What is probate?
Where is an estate probated?
Do I need to an open an estate if there is no property?
Should probate be avoided?

What is an estate plan?
An estate plan may consist of many different types of documents and strategies.  In terms of documents, most simple estate plans will consist of a Will, Power of Attorney, and Advanced Directive.  An attorney can meet with you to discuss which estate plan documents and strategies will best suit your particular circumstances.

What is a Will and why should I have one?
A Will is a document that directs the disposition of your property after your death.  For your Will to be valid, you must be at least 18 years old and of sound mind when the Will was made.  Additionally, you must sign the Will and the Will must be signed by two witnesses who sign in your presence.  These witnesses must also be at least 18 years old.

A Will is important because it allows you to specify how you want your property distributed upon your death.  It also allows you to name your beneficiaries, your personal representative, and the guardian(s) of the person and property of your children.  Your Will may create trusts which allow you to control how certain assets will be passed to your descendants so that you can prevent funds being distributed to them before they are mature enough to use those funds responsibly.  Your Will may also make specific charitable bequests to the charities of your choosing.

What happens if I die without a Will?
If you die without a Will, your estate will be considered “intestate” and the Maryland laws of intestacy will determine how your estate will be distributed. In the State of Maryland, if you die and have a spouse and at least one minor child, your spouse will receive one-half of the estate that passes through your Will and your children will receive the remaining one-half share.  If you are married and your children are all over the age of majority, or if you have no descendants, if a parent survives you, then your spouse will receive the first $15,000 of the estate that passes through your Will, plus one-half of the balance of the assets with the remaining assets passing to your surviving descendants or children.  If you are married but have no descendants or living parents, then your spouse will receive your entire estate.  If you are unmarried at the time of your death, your descendants will receive all of your assets that pass through your Will.  If you die with no surviving relatives, then your estate will pass to the county board of education. 

When should I change my Will?
You can change your Will by drafting and executing a codicil or by executing a new Will.  A “codicil” is a separate document that allows you to change the terms of your Will without the necessity of re-writing your entire Will.  You should review your Will periodically and contact an attorney about the possibility of revising your Will in the event of personal or financial changes, such as a marriage, birth, divorce, death of a beneficiary or a named fiduciary, and/or substantial change in the value of your assets, or change in the federal or state tax laws.

Where should I keep my Will?
You should keep your Will, along with other documents that would help your personal representative manage your estate, is a safe location.  You may also file your Will with the Register of Wills in the county where you reside for a one-time nominal fee.  Be sure to inform your named personal representative of the location of your Will.

Can I simply handwrite my own Will?
Handwritten Wills, legally known as “holographic Wills” are not recognized in the State of Maryland except under the every limited exception of deployed military personnel. 

Is there property that passes outside the scope of a Will?
There are some types of assets that pass outside of the scope of your Will.  Some examples include property transferred to a trust, life insurance proceeds, payable-on-death accounts, securities held in a transfer-on-death account, funds held in an IRA, 401(k), or other retirement account, and property you own with another in a joint tenancy or tenancy by the entirety.  These types of assets pass to the surviving named beneficiary or co-owner, whether or not you have a Will.

Who is a personal representative?
A Personal Representative is commonly referred to as an executor of an estate.  The personal representative is the individual or entity who is designated to handle to administration of your estate. 

What is a Power of Attorney?
A Power of Attorney is a document in which you grant someone the authority to carry on financial or other business matters in your place and stead.  You, the person giving the power, are referred to as the “principal”.  The person who receives the power is called your “agent”.

When does a Power of Attorney take effect and how long does it last?
A power of attorney can be drafted to take effect immediately or may take effect at a later date.  A power of attorney may be “springing” meaning that it takes effect upon the happening of a certain event, usually the incapacity of the principal. This type of power of attorney only takes effect when the principal is unable to manage his/her own affairs. 

The power of attorney defines how long the agent will have authority A power of attorney may last as long as the principal and agent are alive or it can be drafted to expire upon a specific date.

Is there a difference between a general power of attorney and a limited power of attorney?
A general power of attorney grants the agent with broad powers to conduct many types of personal, financial and business affairs of the principal, such as paying bills, opening and closing bank accounts, etc.  A limited power of attorney has a specific defined scope wherein the principal specifies which powers are granted to the agent. A common limited power of attorney is a limited power of attorney for real estate transactions.

What is an Advanced Directive?
An advanced directive is sometimes referred to as a medical power of attorney, advanced healthcare directive, or living will.  This document allows the principal to appoint an agent to make medical decisions for the principal.  The document can also enable the principal to appoint an agent to make sure that the doctors, nurses and other healthcare professionals abide by his/her wishes, including end-of-life treatment and care, and wishes with regard to artificial feeding and resuscitation orders.

Estate Administration

What is probate?
Probate is the process in which a deceased person’s assets are transferred to the people who inherit them whether in accordance with a Will or by the laws of intestacy.

Where is an estate probated?
An estate is generally probated in the Register of Wills or Orphans’ Court in the county where the decedent resides at the time of his/her death.  In some circumstances, for example, if real property is owned in another state, it is necessary to probate an estate in several states. 

Do I need to an open an estate if there is no property?
Pursuant to Maryland law, the decedent’s Will must still be filed in the Register of Wills or Orphans’ Court in the county where the decedent resides at the time of his/her death.

Should probate be avoided?
Some people cringe at the thought of having to have their estate probated. Some wish to avoid it if at all possible.  However, the probate process in Maryland is not as costly and burdensome as other states.  There are times when it is more beneficial to avoid probate; however, there are also situations when the cost of preventing probate may not outweigh the costs of probating an estate.  An attorney can help you determine which option may be best considering your specific circumstances and desires. 

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