Many people in Maryland hear the word "probate" and picture a calamitous situation wherein their loved one's assets are tied up in a legally complex system that takes an inordinate amount of time and money to work through. Therefore, they may seek to find ways to actively avoid probate.
While avoiding probate may be worthwhile for some, it is important to remember that sometimes probate is not as terrible as it may seem. Each state has its own probate laws that must be followed. Depending on the state, fees may be minimal and there may be a way for simple estates to be expedited. That being said, there are some ways to avoid probate that Maryland residents may be interested in.
First of all, certain types of property do not go through the probate process at all. This includes retirement plan proceeds and life insurance benefits. These assets go directly to the beneficiary named in the policy, instead of going through probate. In addition, assets that are held jointly, for example, by two spouses with the right of survivorship, will be passed to the surviving spouse without going through probate.
In addition, certain types of living trusts will not go through probate. In these situations, assets will need to be placed in the trust, be under the care of the trustee and then transferred to the named beneficiaries of the trusts. There may be costs associated with creating and administering a living trust, as well as certain other fees, depending on the state laws. Living trusts can be important, as they can cover major events beyond simply death, such as an illness or disability.
In the end, residents of Maryland should think very carefully about how they want to craft their estate plans. Some people may prefer a living trust, while others would rather have a simple will. In addition, it is important that the proper beneficiaries are established for retirement accounts and life insurance policies. Estate planning can be complex, so it is important that those who want to determine what type of estate planning vehicle is right for them seek the help they need to make appropriate choices.