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Maryland Estate Planning: Necessity of Having a Will

reichert_legal_family-croppedWithout a Will the State of Maryland, though its intestacy laws, determines the beneficiaries and what amounts they receive. This rarely satisfies one’s dispositive preferences. Maryland law in this regard is designed to be most “equitable” for the greatest number of its citizens and does consider the particular needs, objectives and wishes of a particular individual.

Creating a Will provides individual preference for the distribution of the estate assets including specific bequests to individuals, companies or charities. It also allows for the protection and care of minor children. Without estate planning and a Will, and often a Trust, Maryland law determines when and how a child will receive assets which could leave one’s children with unfettered and unsupervised control over assets at a young age and all at one time.

Creating a Will in Maryland allows for the opportunity to use Trusts for individuals such as a spouse or children. With proper estate planning the use of Trusts in Maryland can have important tax and assets management advantages.

Having a Will is even more critical for individuals with minor children. In the absence of a Will that appoints a guardian for the children, guardianship is determined through judicial proceedings. In this instance a Maryland court could select a guardian whom the parent(s) would not have selected. It is through a Will that a parent appoints guardians for his or her minor children.

In the absence of a Will, Maryland law establishes the priority for appointment of a personal representative which may not satisfy one’s wishes. Under Maryland law a surviving spouse and children are given the same priority in serving as a personal representative. By creating a Will, the individual may designate a personal representative which will take precedence over Maryland law. The individual may also name alternate personal representatives of their own choosing. In the absence of a Will, any court appointed personal representative must post bond, the cost of which will be determined by the size of the estate and this cost will become an expense of the estate, thus reducing assets passed-on to those named in the Will. In creating a Will, the individual may elect to save this expense and have their personal representative service free of bond.

If an individual dies without a Will, this could produce an untimely forced sale of the individual’s business resulting in family hardship and financial loss. By creating a Will, an individual may provide for the continuance, or a well-designed sale, of their business.

A Will, along with proper estate planning, can minimize or eliminate taxes paid to the Federal Government and the State of Maryland. No such opportunities exist without proper planning and a Will. With a Will the individual can also decide how any potential taxes will be paid.

A Will is necessary even when an individual has other forms of testamentary dispositions-such as Trusts-and when an individual has jointly held property. Even with the existence of a Trust, few individuals will want to transfer title of all their assets to the Trust and possibly lose control over those assets during their lifetime. Additionally, assets obtained after the creation of a Trust do not automatically become part of the Trust and are thus could be part of the probate estate. When property is jointly held and the first spouse dies, the survivor would need a Will and estate plan. There is also the need for a Will in the event of simultaneous death of those holding joint interest in the property. It is also very unlikely that two individuals would hold joint ownership in all of their assets. Having joint ownership of all assets can fail to take advantage of tax benefits available under a well-designed Will.

For a free, confidential conversation to discuss the benefits of a Will, and estate planning, contact Maryland Estate Planning attorney Stephen J. Reichert at 410-299-4959, or here.