There was much controversy recently as lawmakers were arguing about where the estate tax exemption level should be. However, in the end lawmakers decided the exemption should be at $5.25 million, which means that most people in Maryland and elsewhere will not be subject to the federal estate tax. On the other hand, this does not mean one should stop worrying about creating a proper estate plan. Even those with a modest amount of assets need to have a will.
Failure to do proper planning can result in problems for future intended beneficiaries while trying to administer one's estate. Dying without a will, otherwise known as intestate, will leave one's assets in the hands of state laws. This includes all personal property, bank accounts and even what happens to one's minor children. Unless one wishes to leave everything in the hands of state law, one must create a will in order to inform estate administrators of one's wishes.
A properly drafted will names the guardian for any minor children as well as an executor of one's estate. The will should also specifically name which beneficiaries should receive which assets. Intended charity donations should also be specified in a will.
The guardian will be responsible for caring for minor children until they reach legal adulthood. The executor will be responsible for paying any debts owed by one's estate as well as any tax liabilities. It is also the executor's duty to make sure assets are delivered to intended beneficiaries as well as make specified charitable donations.
Along with other important estate planning documents, a will helps to prevent the need for a lengthy probate court process in Maryland. This will save one's intended heirs significant time and money on legal and court fees. However, one must be certain follow the correct format and requirements in order to make the will legally valid after one's death.
Source: MarketWatch.com, "Estate planning for the rest of us," Bill Bischoff, May 21, 2013