What is Probate and Why Should I Care?
When an individual dies, unless, they have a trust, their assets first have to pass through probate before they can be transferred to beneficiaries. Probate is the legal process of validating a person’s will and making distribution pursuant to the terms of the will. During probate, the administrator to the estate is tasked with locating assets, paying debts and taxes, and, lastly, distributing assets to beneficiaries. Probate, which is implemented to combat fraud, is a time intensive and expensive process. It can take anywhere from six months up to several years, depending on the assets involved, and it generally eats up five to 10 percent of an estate’s value. Probate can be avoided, however, by placing assets in a trust. By doing so, you ensure that your family and children have access to these assets without waiting for them to pass through probate.
A Power of Attorney Dies With You
A power of attorney grants your loved ones the ability to make medical or financial decisions for you while you are incapacitated or unavailable. A medical power of attorney, which is also called an advance healthcare directive, is a valuable tool for anyone, but especially those near the end of their lives or with serious health risks or illnesses, according to the Maryland Attorney General. However, once you pass away, any power of attorney, either financial or medical, becomes invalid, and your will becomes the legal document that takes over decision making regarding your burial, funeral, last wishes, and finances. As such, it is vital that you have an updated will and that it is kept in a place that is easy to locate.
Should I Have a Will or Trust?
Not all property has to pass through probate. According to Maryland Courts, proceeds from life insurance policies, property held as joint tenants, and property that is payable “on death” do not go through probate. Moreover, property held in a trust does not have to pass through probate, which is one of the primary reasons many people choose to create revocable trusts. Revocable trusts (also called living trusts) can be altered at any time during your life, and can not only be used to bypass the expensive and time intensive process of probate, but they can also help you avoid over taxation and even direct what certain funds should be used for and by whom. When deciding between a will and a trust, it is important to remember that everyone should have a will. While a trust is optional, you should at least have a will.
Reach Out to an Experienced Maryland Estate Planner Today
Power of attorney, wills, trusts, advance healthcare directives—the terminology of estate planning can be complicated, but at Frame & Frame Attorneys at Law, we can help you understand what each of these tools accomplishes. Whether you are planning on creating a revocable trust or you want to update a simple will, our Maryland estate planning lawyers can help you with that. Contact us today to schedule a consultation. We’ve also created this free guide to Wills, Trusts & Probate. Download your free copy today!