Mistakenly, many people believe that an estate plan is only necessary if you are in your senior years or have considerable wealth. Nothing could be further from the truth! There are many legal strategies involved in estate planning, and unfortunately, not all of us will live to be 100. But, did you know that in the state of Maryland, without a viable legal estate plan, the State will distribute your estate according to Maryland’s laws of intestacy and not necessarily to your spouse or dearest family members? That means that every Maryland resident actually already has a plan in place (as established by the state) and it’s up to you to change it so that it reflects what you intend or wish. In this article, Baywoods of Annapolis shares some of reasons to have an estate plan and what it should include.
Tip #1: Don’t go it alone
Simple estate planning does not need to be costly, but it’s significantly better than no plan at all! Since the laws of each state vary and change frequently, an experienced estate planning attorney can provide valuable advice and help you avoid common pitfalls. They will work hard to understand your personal situation and advise you the best strategies to preserve your intentions and avoid timely, and often costly, legal issues down the road for you and your loved ones.
Tip #2: Your Last Will & Testament
Your will helps your wishes to be carried out, after your death. In Maryland, if you do not have a legal and proper will, your estate will be distributed according to Maryland’s laws of intestacy. In this case, state laws will determine how and to whom a person’s assets will be distributed and it’s not always the way in which you may have hoped. So, a legal will is very important and again, does not cost a lot of money.
Tip #3: Establish your Powers of Attorney
Prior to any health crisis, it’s important to establish a power of attorney so that important decisions may be made in certain circumstances. A power of attorney may be very broad or very specific, and there are different types so again getting good advice is important.
Tip #4: Trusts
There are a variety of different types of trusts that can be used for different purposes. According to Mike Lehr, Attorney at the Annapolis Estate Planning Law Firm, Holden & Campbell, “Depending on the situation, there may be many advantages to establishing a trust, including avoiding probate. In most cases, assets owned in a revocable living trust will pass to the trust beneficiaries upon the death of the trust-maker(s) much quicker by avoiding the public process of probate. Certain trusts also may result in tax advantages both for the trust-maker and the beneficiary. Or they may be used to protect property from creditors, or simply to provide for someone else to manage and invest property for the trust-maker(s) and the named beneficiaries. If well drafted, another advantage of trusts is their continuing effectiveness even if the trust-maker dies or becomes incapacitated.”
Remember, an estate plan is just that – a “plan” in the event of your death so without one, there is no plan and chaos can ensue. Baywoods of Annapolis is a local retirement community that cares deeply about our residents and our senior community at-large, we encourage you to seek out the resources you need to get your estate plan done today!