An estate plan settles your affairs and determines who will inherit your possessions and valuables after your death. There are few remedies if a plan is not in place when you die, and your family members may face financial complications and disputes. These are the major reasons for having a plan.
Estate planning is required for most families regardless of size of their estate. Most individuals have assets such as retirement plans, investment, vehicles, and real estate.
One of the most important reasons for an estate plan is designating heirs for these and other assets. Without a plan, a court will apply Maryland law and decide who receives assets.
This process can be costly, last years and become contentious. Courts may not consider which family member is responsible, which person should not have ready access to these assets or automatically order that the surviving spouse receive all this property.
Parents of small children need to make plans for their care. A will should address the appointment of a guardian if both parents die before the children are 18 to assure that they receive care in a manner that you approve.
Without appointment of a guardian, a court who will decide who will raise your children which may conflict with your wishes or comply with the instructions you would provide to a guardian.
An estate plan can address transferring assets to your family in a way that carries the smallest possible federal and state tax liability for them. There are also methods to reduce your heirs’ income tax liability.
Disagreements can end up in court as a will contest or another legal dispute. Having more than one spouse or children from another marriage increase the odds for these disputes.
Estate planning can help prevent fighting among family members who can have different views on their share of the estate or who should administer it. It allows you to select who will control finances and assets when you die or if you become mentally incapacitated and helps assure that assets are managed as you intended.
Individualized plans can also deal with issues such as a child with health problems or special needs, whether the estate should be divided equally or creating a trust for a family member who is unable to responsibly manage a lump sum inheritance. Addressing a child who cared for you when you are older or received substantial assets to cover their education are other matters that may be addressed.
Attorneys can provide options and strategies. They may prepare documents that help assure that your wishes are carried out and your family is protected.