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Maryland Estate Planning: Avoiding Probate

The Probate Process

For more on the Maryland probate process, read my blog post.

Creating a Will without any other Estate Planning does not stop your estate from going through the probate process.

Avoiding Probate

Because probate can be a lengthy, costly and public process, many people choose to avoid it. There are a number of legal strategies that allow you to pass property to another person after your death, without going through probate.

Here’s one way:

Add another person to your assets as a “joint owner” or “joint tenant with rights of survivorship.” This will allow your property to pass to them upon your death without going through probate.

There are pitfalls to this strategy, however. For example, you potentially subject jointly owned assets to any claims (such as lawsuits) against the joint owner. Additionally, you make your assets available to the joint owner’s creditors, all while you are still alive and planning on using the assets yourself.

Here’s another way:

Maryland allows Transfer on Death (TOD) or Pay on Death (POD) beneficiary designations to be added to bank accounts. Beneficiary designations like these are preferable to joint tenancy in that they allow you to transfer property only upon your death without giving away current ownership.

One of the drawbacks, however, is that it can be difficult to obtain an equitable distribution of property among your heirs by utilizing beneficiary designations. Additionally, if you have beneficiaries listed on your assets, those assets will be distributed upon your death to the listed beneficiaries, even if your Will states otherwise.

Other Options: Revocable Living Trust

This is a legal document that allows you to establish a separate entity (the Trust) to “hold” legal title to your assets while you are alive, and to name Trustees to manage those assets according to the Trust terms.

Typically, you serve as the Trustee while you are alive, managing your assets for your own benefit. Upon your disability or death, the Trust terms appoint your successor Trustee who continues to manage, or distribute, the assets held in Trust.

A properly drafted Trust can accomplish many goals, including guardianship and probate avoidance for your estate, and bloodline, marital and creditor protection for your children.

For a free, confidential conversation to discuss these and other probate avoidance strategies along with other estate planning matters, contact Maryland Estate Planning attorney Stephen J. Reichert at 410-299-4959, or here.