There has been plenty of talk among financial professionals regarding the new changes to the federal estate tax and how it will affect those planning their estates. The new law has set the federal exemption for the estate tax at $5.25 million for individuals and $10.5 million for couples. This has many people in Maryland and elsewhere believing that only the wealthiest people need to worry about planning for estate administration. However, there are a variety of issues which still need to be addressed even if one is not wealthy enough to be affected by the estate tax.
One estate planning aspect which should be considered is designating heirs who will receive assets, such as an insurance policy. After designating heirs and beneficiaries many people tend to never think about the issue again. However, it is important to regularly review and revise these designations in order to make them fit into changes in one's life. Many people may want to make changes to these designations after either marrying or divorcing.
Another important item to consider is what will happen to minor children in the case of a parent's death. Many parents have yet to choose a designated guardian for their children in the unfortunate case of their own demise. Not specifying a guardian for minor children in one's estate planning documents can create a future legal conflict with the children stuck in the middle of contentious litigation.
Planning for estate administration in Maryland will help avoid a lengthy probate process as well as potential legal conflicts for the family of a person who has passed away. With all of the emotional turmoil as well as other related expenses, one's intended heirs and beneficiaries will greatly appreciate a concise and legally enforceable estate plan. It is essential to make sure that each estate planning document is properly drafted and executed.
Source: The New York Times, "Estate Planning Under the New Tax Law," Paul Sullivan, April 26, 2013