is probate in maryland always required

IS PROBATE IN MARYLAND ALWAYS

REQUIRED? “Probate is not inherently negative, but it is time-consuming, and there can also be costs that accumulate during probate. If you would like to learn more about probate and probate avoidance methods, schedule a consultation with a licensed estate planning attorney.”

Colleen Sinclair Prosser

Annapolis, Maryland Estate Planning Attorney

http://www.sinclairprosserlaw.com/

Is Probate In Maryland Always Required? www.sinclairprosserlaw.com 2

You may assume that assets are immediately transferred to your heirs after you

die if you use a last will to state your final wishes. Many people are under this

impression, because a last will can seem like a very simple, straightforward

document. In reality, the heirs do not receive their inheritances right away,

because the will would be admitted to probate after your passing.

Probate can be briefly defined as the legal process of estate administration. The

heirs that are named in the last will may not be the only interested parties. There

could be outstanding debts, so creditors must be notified about the decedent's

passing. Plus, the court examines the will to make sure that it is valid.


The property that would pass through the probate process is property that was

in your sole, direct personal possession at the time of your passing. However,

there are a couple of exceptions to this rule. A simplified probate process could

be utilized if the estate is valued at $50,000 or less. The simplified process can

also be used if the estate is valued at $100,000 or less, and a surviving spouse is

the only inheritor.

All property transfers would not be subject to the probate process. Let's look at

some types of asset transfers that would not go through probate.


PAYABLE ON DEATH ACCOUNTS

A payable on death account is a bank or brokerage account that has a

beneficiary. These accounts are sometimes called transfer on death accounts or

Totten trusts.

If you create this type of account, you do not have to worry about surrendering

complete control while you are living, because the beneficiary would not be able

to access the resources while you are alive. After you pass away, the beneficiary

would assume ownership of the remainder in the account, and this transfer

would not be subject to the probate process.


PROPERTY HELD IN JOINT TENANCY

You can add another owner to property that is in your possession. If you add a

co-owner, this person is referred to as a joint tenant. As soon as you add the

joint tenant, this individual would own half of the property, and you would own

half of the property.

Joint tenancy typically comes with something called right of survivorship. After

the death of one joint tenant, ownership of the entirety of the property would be

transferred to the surviving joint tenant. Probate would not be a factor.


This can sound like a turnkey arrangement, but remember, you are surrendering

half ownership of the property while you are still alive, and this can potentially

cause difficulties. The portion of the property that is owned by the joint tenant

could be attached if he or she was to run into legal or financial problems. Plus,

you could not sell the entirety of the property, because you would not own all of

it.

LIFE INSURANCE PROCEEDS

You may have life insurance policies on your own life. After you die, assuming

the contractual terms were met, the company would pay the beneficiaries in a

direct fashion, and the probate court would not be involved.


REVOCABLE LIVING TRUSTS

Revocable living trusts are very popular among people who want to facilitate

efficient asset transfers. Once you create the trust, you convey assets into it, you

can act as the trustee while you are living.

You name a successor trustee in the trust agreement. After you die, the

successor trustee would distribute assets to the beneficiaries in accordance with

your wishes, and these distributions would take place outside of probate.


SUMMARY

We have looked at a handful of the ways that assets can be transferred outside

of probate, but there are others. These are simple scenarios, but people who

have more complex estate planning objectives may implement advanced

strategies.

Probate is not inherently

negative, but it is time-

consuming, and there can

also be costs that accumulate

during probate. If you would

like to learn more about

probate and probate

avoidance methods, schedule

a consultation with a licensed

estate planning attorney.

Many attorneys offer free, no obligation initial consultations, so you can take the

first step without making any firm commitments.


REFERENCES

Forbes

http://www.forbes.com/sites/janetnovack/2012/10/14/the-forbes-guide-to-

estate-planning/

Cornell University Law School Legal Information Institute

http://webserver.rilin.state.ri.us/Statutes/TITLE33/INDEX.HTM

http://www.forbes.com/sites/janetnovack/2012/10/14/the-forbes-guide-to-estate-planning/

http://www.forbes.com/sites/janetnovack/2012/10/14/the-forbes-guide-to-estate-planning/

http://webserver.rilin.state.ri.us/Statutes/TITLE33/INDEX.HTM


About the Author

Colleen Sinclair Prosser Currently the owner and manager of SinclairProsser Law, LLC, Colleen steers her firm with both a guiding hand and direct involvement with the clients, bringing to the table a wealth of Estate Planning experience from many years spent at the helm of a busy law practice. Colleen is currently serving on the Board of Trustees for By Their Side, Lifelong Advocates for

Marylanders with Developmental Disabilities. She formerly served on the Board of Governors of the American Academy of Estate Planning Attorneys in the past. EXPERIENCE An established member of the American Academy of Estate Planning Attorneys, Colleen offers years of experience in estate preservation and transfer. A strong proponent of the living trust, she also focuses on wills, powers of attorney, living wills, probate, trust administration, prenuptial agreements, nursing home planning, and special needs planning. She strongly endorses long-term care insurance and, in certain cases, life insurance and some annuities as valuable estate preservation vehicles, and strives to assure the compatibility of her clients’ estate plan and financial plan. Sensitive to the challenges presented by lifestyle and circumstance, Colleen addresses each situation with personal attention, wisdom, and skill.

SinclairProsser Law, LLC www.sinclairprosserlaw.com

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