Probate is the legal process in which the court, through the Register of Wills, oversees the transfer and distribution of a person’s assets after they pass away. The court is responsible for appointing a Personal Representative–someone who make sure that all debts are paid and that remaining assets are transferred to the persons named in the Will. (If the deceased does not have a will at the time of their death, Maryland’s probate court will distribute assets to their next of kin.)
Why Avoid Probate?
There are a number of reasons to avoid probate. Probate can be costly and involve hefty filing and attorney fees. The process can take anywhere from six months to two years for the average estate, and the assets in an estate are subject to claims from creditors. Additionally, probate records are public, which makes information about the deceased’s finances, including their debts, who receives their assets, and the value of those assets, available to anyone who is interested.
How To Avoid Probate
There are some simple steps you can take that will help your family members or partners avoid going through the probate process when it comes time to distribute your assets:
- Give Property as Gifts – Your property or assets can be transferred as gifts during your lifetime as a part of your overall estate plan. Just remember that some gifts could have tax consequences—it is important to consult with an estate planning attorney or accountant before making substantial gifs.
- Joint Tenants with Rights of Survivorship Accounts – If a spouse or other person is a joint owner of your bank account, investment account, or real estate, that account or property passes directly to the surviving joint owner, avoiding probate on that asset.
- Pay-On-Death Accounts – Having a POD or beneficiary designation on financial accounts will allow the money in those accounts to pass directly to that person or persons upon your death, avoiding probate of that account.
- Set Up a Revocable Living Trust – A Trust is a written agreement that provides for management of your assets while you are alive and well or if you become incapacitated, and provides for transfer of those assets upon your death. Once the agreement is signed, assets must be transferred into the trust, or titled in the name of the trust, in order to avoid probate. (Warning: Many people have old Trusts that they got from a “trust factory” or online, which don’t actually have any assets in them. They are essentially useless.)
- Work with an Estate Planning Lawyer – All of the above techniques will avoid probate, but some—if done incorrectly– may have unintended consequences, such as taxes, allowing assets to pass to minors directly or affecting a person who receives governmental benefits. One common problem is when a person makes sure that all their accounts pass directly to beneficiaries, leaving no money to pay for expenses to probate their house. (A good estate planning attorney can avoid probate on the house also). The best way to avoid probate is to get help from a legal professional and begin the estate planning process with someone who has thorough knowledge of probate law.
Your Best Resource for Maryland Legal Services
D. Kathleen Rus is an estate planning and probate attorney in Maryland with offices in Carroll and Baltimore County. She has the expertise and knowledge required to provide sound legal advice to anyone planning their estate. With over 20 years of estate planning experience, she can be an essential resource for you during every step of this process. Contact DK Rus Law today to schedule your free consultation.