One can never be too prepared. This is true for almost every aspect of life. However, many people in Maryland and other states are not aware that this is true even when planning for one's own death. Although it is not a cheery topic, planning for estate administration is important for everybody, no matter the amount of assets a person may own.
One of the most important documents in an estate plan is a last will and testament, which directs who inherits one's assets after one passes away. This legal document can also specify who will become the guardian of any minor children. However, when a person fails to create a will before he or she dies, the person's estate will be subject to the court's interpretation of state laws. This could result in problems for intended beneficiaries during the estate administration process.
Another useful estate planning tool is a living trust, which is a legal instrument which can help avoid the need for probate court. Trusts store assets in an account and is commonly used to limit estate tax liabilities. Many people will also utilize trusts in order to keep a minor child from being disqualified for government benefits which are based upon one's income.
Along with a last will and testament and living trust, there are a variety of other estate planning documents which can aid in the estate administration process in Maryland or in any other state. However, regardless of what estate planning strategy one chooses, it is important to have a strong understanding of the latest applicable laws. Also, correctly drafting these legal documents is important, since mistakes can open one's estate to probate court.
Source: Forbes, Estate Planning For The Rest Of Us, Liz Davidson, Sept. 12, 2013