Estate planning has become an increasing topic of conversation in the media. High-profile celebrity disputes illustrate how badly a family's situation can turn volatile when the probate process goes wrong. No one wants to leave their estate in disrepair and their loved ones fighting over assets, which is why some suggest that estate plans should be updated if an individual's life situation changes. There are five primary life events that may make Maryland residents consider reviewing their estate plan and considering a trust as a viable option.
The first life event is marriage, whether it is the first one or a subsequent. It is important to make sure that estate planning documents such as a trust reflects the individual's wishes as to what assets and control the spouse will have in the event of death. The second life event is divorce or the death of a spouse. Most people will likely not want their assets passing to their ex-spouse rather than their children or loved ones, or a new spouse. This is one reason why it may be important to update trusts.
The third life event is purchasing or refinancing a residence. It is recommended that homes be held in a trust, and if refinancing does occur, that individuals ensure the lender place it back in the trust. The fourth life event is opening new financial accounts such as savings, mutual funds, brokerage accounts, etc. Ensuring that these accounts are included in a trust can help keep heirs out of an unnecessary probate process.
The fifth life event is changes in children's status, which can include adoption, having a baby, gaining a stepchild, etc. Each of these events may be reason for estate planning documents to be updated. Having a trust set up for children gives individuals the ability to set ages at which funds are available.
Estate planning is a multidimensional process that requires individuals to consider their assets and property, and determine who gets what and when after death. Keeping estate planning documents updated regularly and utilizing a trust when possible can help keep heirs from facing an unnecessary probate process. Maryland residents may find it challenging to regularly revisit their estate plans, which is why it may be beneficial for them to seek the counsel of a professional in order to ensure that their plans are organized and accurate.
Source: Forbes, "5 Life Events That Require An Estate Planning Review," Michael Chamberlain, Aug. 13, 2012