Many people think estate planning is for older, wealthy people who need to establish elaborate trusts to protect their assets. However, wills, trusts and other estate planning instruments are important for people of all ages and incomes.
Is choosing an estate administrator a big decision? Considering all of the duties that an administrator may face, our estate planning law firm would caution against naming someone solely for sentimental reasons. In fact, a neutral party may be best positioned to avoid disputes among loved ones and handle the administrative deadlines that can quickly pile up after the passing of a loved one.
In addition to all of the new potential challenges to the middle class in the coming tax year, the alternative minimum tax (AMT) is also finding its way into the ring. The AMT was originally directed at wealthy individuals, but it is increasingly an issue for middle class Americans, including those in Maryland. It can apply to a trust or estate as well as to certain taxpayer incomes.
Agricultural homesteads in Maryland may find better protection from high estate taxes, according to a new law. The Family Farm Preservation Act was signed in by Maryland Governor Martin O'Malley in an effort to preserve the future of farming in the state and reduce death taxes on smaller farms for the families left to run the operation. Estate administration has been a challenge for the families of deceased farm owners, and the new law aims to help significantly reduce the tax burden.
One important aspect of estate planning is deciding whether or not to establish a trust. A trust can help not only with managing the assets of the estate, but can also reduce the impact of estate taxes and save beneficiaries from having to endure the probate process. Yet a trust can be a legally complicated instrument and before establishing one, it is important for residents in Maryland and elsewhere to understand the potential consequences of different types of trusts.
Recently, we wrote on this blog about how the Maryland legislature is considering changes to the estate tax system that could benefit family farms. However, other bills currently pending legislative action could also help ease estate administration for everyone by reducing the tax burden in certain areas. The measures are aimed toward making Maryland more competitive with other states and keeping residents from locating outside the state.
One of the goals of estate planning is to minimize the impact of taxes while maximizing the size of the estate. This way, heirs and beneficiaries of the estate are not stuck with a tax bill that they cannot pay without liquidating much of what they are supposed to inherit. However, estate administration may become somewhat easier for some Maryland residents if legislators pass a bill that is currently before the House Ways and Means Committee.