Estate planning is the arrangement of your assets in order to carry out your wishes for the disposition of your property upon your death and/or the administration of your assets during your incapacity.  Estate planning takes into account the laws of wills, tax, insurance, property, and trusts so as to gain the maximum benefits and protections under the law.  The most common forms of estate planning is the preparation of a last will & testament, revocable trust, financial power of attorney, and medical directive. 

A will is a document, executed under the formalities of state statutes, by which a person can direct the disposition of his/her property.  In order to create a will, a person has to be at least 18 years of age and competent.  A competent person can change his/her will at anytime under the formalities of law.  Periodic changes may also be necessary due to changes in the law and/or personal or financial situtations. 

It is recommended that you review your will and other estate planning documents at least every three years to make sure that they continue to meet your needs.  Some circumstances under which you may want to consider updating your will include:

• a new marriage or divorce,
• the death of a spouse, child, or other beneficiary,
• a change in financial status,
• changes in federal or state tax laws, or
• a change of guardian, trustee, or personal representative.

*** This list is not meant to be exhaustive. 

A revocable trust is a legal entity, created by agreement and executed under the the formalities of state law.  You as the creator of the trust (called the "grantor") and the person(s) whom you designate to administer the trust (called the "trustee(s)") would agree in writing to administer the assets that you title in the name of the trust according to the terms of the trust agreement.  Usually, in a revocable trust, the grantor is also the trustee.  This allows you to retain control over the trust assets.  A revocable trust also allows you to revoke the trust at anytime.  Upon your death or incapacity, your desiginated successor trustee would take over the administration of the trust assets and follow your wishes as expressed in the trust agreement.  Although trust administration avoids probate costs, there could be additional costs associated with the trust administration.  Also assets placed into a revocable trust by a grantor will still be included in the calculation of his/ her gross estate for estate tax purposes.  One example of when a revocable trust might be appropriate is when a person owns real estate in different states.  Having the real estate titled in the name of a revocable trust, could avoid multiple probate proceedings in different jurisdictions.   

In Maryland, a competent adult may appoint a person to manage and control his/ her assets during life.  By creating a durable power of attorney, the grantor can direct that the appointee (known as the attorney-in-fact) will continue to maintain control over his/ her assets during any period of incapacity.  A valid durable power of attorney may prevent the inconvenience and expense associated with having to petition the court for a guardianship in the event you become incapacitated.

Under Maryland law, a competent adult may appoint a person to make health care decisions for him/ her in the event that he/ she becomes incapacitated.  This document gives you the opportunity to express your intentions regarding the implementation of life sustaining procedures in the event you suffer from an incurable disease, injury or illness, or a condition which results in a permanent vegetative state.

Probate is the process under which a decedent's assets are collected, administered and distibuted after the payment of all expenses, debts, and taxes.  Any assets owned by a person (in his/ her individual name) at the time of death will be distributed under the state's probate laws.  The court will appoint a personal representative (whom you can name in your will) to handle the administration of your assets.

If a person dies with a will, his/ her assets will be distributed according to the terms of the will.  If a person dies without a will, state law will determine how your assets will be distributed.   

In Maryland, if a person dies without a will his/ her probate assets will be distributed according to the terms of state law. In general, under Maryland law the decedent's assets will be divided amongst his/ her immediate family members. The following list provides you an explanation of how the assets would be divided depending upon whom survives the decedent. 

1.   If a decedent dies leaving a surviving spouse and a surviving minor child/ children, the assets will be divided with one-half of the assets going to the surviving spouse and one-half going to the surviving child/ children.

2.   If a decedent dies leaving a surviving spouse and an adult child/ children (or other surviving issue), the assets will be divided with $40,000.00 plus one-half of the remaining estate assets going to the surviving spouse and the remaining assets going to the adult child/ children (or other surviving issue).

3.   If a decedent dies leaving a surviving spouse and a surviving parent(s) but no surviving issue, the assets will be divided with $40,000.00 plus one-half of the remaining estate assets going to the surviving spouse and the remaining assets going to the decedent's surviving parent(s).

4.   If a decedent dies leaving a surviving spouse, but no surviving issue or parents, then all of the decedent's probate assets will go to the surviving spouse.   

5.   If a decedent dies leaving a surviving child/ children but no surviving spouse, the entire estate will be divided amongst the surviving child/ children.  If a child predeceases the parent leaving issue, then the portion of the estate that child was entitled to will be distributed in equal shares amongst his/ her surviving issue.