Estate Planing/Administration Services

What is probate?

Probate, also known as estate administration, is the process by which the property (estate) of a deceased person (decedent) is distributed to heirs at law in an intestate (without a Will) death or to designated beneficiaries in a testate (with a Will) death. The probate process is controlled by the probate laws of the state in which the decedent maintained legal residence at the time of death and/or by the probate laws of the state in which property was left at the time of death.

During the probate process a personal representative (executor or administrator) is appointed to serve the estate. A personal representative is the individual or corporation (bank or trust company) appointed by the probate court to take charge of the decedent's property during the probate process. The personal representative must identify, value and assume control over all the decedent's property. The personal representative must also pay all lawful claims against the decedent's estate, including the decedent's debts, income taxes and death taxes, and expenses of administering the estate.

Probate can be difficult emotionally, mentally and financially inasmuch as the decedent's heirs are still living with loss of a loved one. However, proper planning and estate administration can alleviate some of those concerns.

What is a will?

A will is a written document directing the disposition of a person's assets after death.

Why should you make a will?

A will is one of the most important of all legal documents. It is the legal declaration your intentions and desires that you direct to be carried out after death. By making a will you can specify how you want your property distributed after your death; you can name a personal representative who has the responsibility to collect assets, pay bills and distribute your estate according to the terms of your will; you can make charitable bequests; and you can nominate someone in whom you have confidence to be a guardian of your minor children. More importantly you can eliminate any potential disagreements among your heirs about the distribution of your estate. Without a will, the intestate laws of the State of Maryland direct the order of priority for those individuals to serve as personal representative of the estate; what heirs are entitled to receive the assets of the estate; and in some instances the Orphans' Court shall make the appointment of a guardian for your minor children.

Who can start a probate?

Most people are surprised to find out that any "interested" person can commence a probate proceeding. This includes creditors, close family members, heirs, or anyone having a claim against the estate of the decedent.

Can an estate be administered without going through the court?

No. As a matter a law all estates are opened by the Register of Will Office . However, there are some assets that pass upon death that do not go through the probate process, thus no estate is involved. These cases involve assets of the decedent that are either titled in joint tenancy, titled in a Living Trust, or have a designated beneficiary tied to the asset (i.e. life insurance, bank accounts with "pay of death" beneficiary designations, IRA's).

Why have an estate administered?

If all the decedent owned were assets that were of little or no monetary value or the debt as it relates to an assets exceeds its value there may be may little gain by opening an estate. However, the decedents possessed assets that have a title, e.g. bank accounts, cars, homes, boats, then something must be done to change that title into the beneficiary's name. If no action is taken, then the beneficiary will not be able to take possession of the asset, sell or refinance the real estate, or get the benefit of the securities portfolio.

In what state should the probate take place?

This question can get complicated. As general proposition probate takes place in the state where the decedent resided at his death. However, a State court cannot issue an order affecting real property in another states. As such, a ancillary probate proceeding needs to be started in the state where the real property is located. This could mean more than one attorney (because often attorneys only practice in one state) and more than the usual fee.

What is a revocable living trust?

A revocable living trust ("RLT") is a legal device for holding title to property for the benefit of a beneficiary. With an RLT, you, the property owner are the settlor (creates and can amend the trust), the original trustee (manages and distributes the property held in trust), and the beneficiary until death, at which time, a successor trustee transfers the property to the successor beneficiaries . Control over the property remains with the owner(s) during life and the transfer of property after death occurs without probate. If you have property in more than one state, a trust can eliminate the need for probate proceedings in multiple jurisdictions. Also, if your estate is sizable and over the estate tax exemption amount (over $2 million in 2008 or over $3.5 million in 2009) including life insurance, a revocable living trust for you and your spouse can save your beneficiaries thousands in estate taxes.

How can a person change a will?

If a will is valid, it is effective until it is changed, revoked, destroyed, or invalidated by the writing of a new will. Changes or additions to an otherwise acceptable will can be most easily accomplished by adding a codicil. A codicil is a document amending the original will, with equally binding effect. Therefore, a codicil must be executed in compliance with applicable law, using the same formality as the original will. Wills cannot be changed by simply crossing out existing language or adding new provisions, because those changes do not comply with the formal requirements of will execution.

How can a person leave property to minor children?

Generally, the law requires that adults manage children's inheritances until the children turn eighteen. If a testator wants to leave property to children, it makes sense to name an adult to manage that property. Otherwise, a court will name someone to safeguard the property, a procedure that may delay speedy transfer of assets. There are several ways a will can provide for property management while heirs are underage:

Trusts: A will can establish a trust to handle property left to children. A trustee is named to manage the property for the children's benefit, and distribute trust property according to the testator's instructions. A will can either set up an individual trust for each individual child, or a pot trust that covers multiple children. The trustee usually follows instructions to spend trust funds to meet children's needs until they come of age. When the child or youngest child covered by the trust reaches eighteen or another given age, the trust funds usually are distributed amongst the beneficiaries and the trust ends.

Uniform Transfers to Minors Act (UTMA) custodians: The UTMA is a law that exists in almost every state, and gives a testator the ability to choose a custodian to manage property left to a child. If at the testator's death, the child is under eighteen, twenty-one, or twenty-five (depending on the specific version of the state UTMA law), the custodian will manage the property until the child reaches the statutory age. At that age, the child receives whatever is left of the property outright. Unlike a trust, the testator cannot change the age at which the child receives this distribution.

Property guardians: A will can name a property guardian for a child. At the testator's death, if the child is still underage, the probate court will appoint the chosen guardian to manage property for the child. This option is available when a trust or UTMA custodian is not specified.

The option chosen for gifts to children will depend on the testator's goals, the size of the intended gift, and the age and character of the children.