Many people ask what is involved when there is a probate estate. Probate is the process of gathering and distributing a person’s assets after death. If the individual died with a will, the will must be filed with the Register of Wills. Property owned by the decedent must be inventoried and appraised. Only assets owned solely in the decedent’s name, as well as property owned jointly as tenants in common, are distributed according to the terms of the will. Common examples of probate assets include cars, real estate, and bank accounts if owned solely by one person.
If the decedent owned non-probate property, this property is not subject to the probate process. Non-probate assets include property owned by a trust, accounts with beneficiary designations, and joint tenancy accounts. With non-probate assets, the property passes to the beneficiary or the surviving joint owner automatically and outside of probate. A 401k with a designated beneficiary is a non-probate asset. Non-probate arrangements are often referred to as will substitutes because they avoid the need for probate and are not controlled by the terms of the will.
If a person does not make a will during his lifetime and dies owning property in his name, probate is still necessary. However, because there is no will to determine who will receive the decedent’s property, the intestate succession rules in Maryland govern how any probate property will be distributed. A surviving spouse is entitled to one-half of the probate estate when there are surviving children. Likewise, a surviving spouse is entitled to one-half of the probate estate when there are no living children but there is a surviving parent of the decedent.
Drafting a will allows you to control who will inherit your property upon your death and the manner in which they will receive their distribution. If you have minor children, you may also use a will to designate guardians in the event of your death. It is often preferable to leave an inheritance in trust. For example, for those who want to leave money to a minor child or someone with special needs, property can be left in trust under the terms of the will. However, if you die without a will or estate plan, the assets are transferred outright. This can be problematic for beneficiaries who are too young to manage an inheritance or may become disqualified from receiving governmental benefits upon receipt of the inheritance.
Probate can be complicated when a person dies owning real property in multiple states. For example, if Jack is a Maryland resident but has a vacation home in another state and both his primary residence and vacation property are titled solely in his name, a probate will need to be opened in both states. One way to avoid multiple probates is to title the properties in the name of your revocable living trust. Because a trust is a non-probate arrangement, placing the properties in the trust avoids moving the properties through probate.
Regardless of the size of your family or marital status, an estate planning attorney can talk to you about a plan that allows you to leave your property to those who you want to inherit from your estate, and distributed according to terms you establish.
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