When we talk about Maryland estate planning, the conversation often revolves around how you can protect your family after you pass away. But what if you don’t have a family? Everyone’s circumstances are different, and there are plenty of people who are not married, have no children, and no close relatives. If this is your situation, you might think that it is not important to do estate planning. But it may be even more important for you, than for the traditional family.
Why Single People Need an Estate Plan
Just because you don’t have a spouse, child, sibling or another close relative, doesn’t mean there is no one in your life you would want to have all or part of your estate. You may wish to leave something to friends, colleagues, neighbors or other people who are important to you. Or you may wish to leave money to a charity, a scholarship fund, a hospital or your volunteer fire department, so that your name and legacy live on. Even if you don’t have a lot of wealth, you can make a big difference in someone’s life.
There are examples in history of wealthy men and women who left parts of their estate to complete strangers. For instance, one man arranged for a portion of his estate to be liquidated several years after his death and the proceeds to go to a woman in his hometown who had the most children at that time. Isn’t that an interesting and generous way to help a person in need?
So, with this information in mind, let’s go over what estate planning steps you should take.
Get a Will and Name Your Beneficiaries
A Will is written for the future, but it is based on your current circumstances. Even if there is no one special in your life right now, you can always change your Will later if you meet someone significant. In the meantime, you should plan for the unexpected by naming persons or organizations that will inherit your estate. And don’t forget to name beneficiaries on your bank accounts, life insurance policies and other assets that typically bypass probate and go directly to the named beneficiary.
If you don’t have a Will or beneficiaries on your accounts, the court will follow Maryland Intestate law to distribute your assets. This means that your estate may go to distant relatives that you don’t even know (or like). If you have no relatives at all, your estate may go to the State of Maryland.
Consider a Trust
If you have a large estate, it may make sense for you to set up a trust. This strategy can help you avoid probate and minimize estate taxes. A trust will hold your assets and will release them when certain conditions are met. If you are considering donating some or all of your estate to charity, look into the charitable remainder trust. It is a good option for appreciated assets that could result in a hefty capital gains tax if sold. By transferring them to the trust, you can keep receiving income while you are alive, then give the assets to your charity of choice after you die.
Find a Person You Can Trust
You should determine who will handle your assets after your death—a Personal Representative if you are using a Will, and a Trustee if your assets will be in Trust. You should also have a durable financial power of attorney and a healthcare power of attorney to allow someone you trust make decisions for you if you are alive but unable to do so yourself. If you don’t have many candidates to choose from, you may have to find a single person to carry all of these responsibilities for you. This is not always easy, so it may take some time.
Speak to a Maryland Estate Attorney
Even if you decide to leave everything you have to one person or a single charity, you should still consult with an estate attorney first. It may seem straightforward, but there are many legal nuances you may not know about. For example, should you write your heir into the property title or pass this asset through the Will? Is there even a difference? What is the most cost-effective and simple way to accomplish your goals? What are the pros and cons of each method, including tax consequences, protection from creditors and other financial considerations? Contact us for a free consultation and we will be happy to speak to you about how to avoid costly mistakes.
Give DK Rus Law a call or contact online today to get your estate planning questions answered.