Top 10 Tips for Estate Planning in Maryland
Whether you see yourself as a procrastinator or a control freak, we can all use some tips on planning for the future. The future will inevitably arrive, so you may as well prepare for it to have the best possible experience. Here are some ideas to think about as you consider your estate planning.
Protect Your Health DecisionsIn an instant, life as you know it could be forever changed. The person behind you in traffic could slam into your car while distracted or under the influence, and you could sustain catastrophic injuries. Your doctors might have to place you in a medically-induced coma for a few days or longer to stabilize you and minimize additional damage from swelling. You will not be able to make or communicate your decisions about your medical treatment while you are unconscious. Do you want to leave those choices in the hands of the people the hospital would call on to handle your medical decisions?
While we may love our close relatives, the thought of them making life-and-death decisions for us might be unsettling, if not terrifying. Do not worry - you have options. Now, while you are healthy and legally competent to do so, you should make a durable power of attorney for health care decisions. The document will name the person who will make medical choices for you. The paper can also provide instructions as to your wishes about treatments, life support, and other topics.
Protect Your MoneyContinuing the example from the previous section, you should make a durable power of attorney for financial matters. If you recover sufficiently to make and communicate your wishes, you are free to do so. Your durable power of attorney can be general or detailed. The paper empowers someone to handle your financial affairs if you are unwilling or unable to do that for yourself. "Durable" means that the document will remain in effect even after you are temporarily or permanently incapacitated.
If you do not create the power of attorney papers, your family might have to go to court to get a guardianship over you. If they do, you will not be allowed to make your decisions as long as the guardianship is in place.
Make Sure Your Assets Go to the People You ChooseIf you do not make a will, the court will apply the state statutes of intestacy to determine who gets your money and other assets. You might be surprised at how states distribute things through intestacy. If you prefer to select the people who will benefit from your generosity, instead of leaving it up to a stranger (a judge) to follow what can seem like arbitrary rules, then you need to make a will.
If you have significant assets or circumstances like a child or spouse with special needs or addiction issues, or a loved one who does not handle financial matters well, you should consider setting up a revocable living trust. With a trust, you have many more options for tailoring the asset distribution over a number of years, rather than all at once.
Provide for the People You Will One Day Leave BehindMillions of Americans live from paycheck to paycheck, never amassing significant savings or investments. You might think you have little to nothing to leave your family when you die. For a modest amount of money, however, you can buy a term life insurance policy to help ease the financial blow to your family.
Keep It Out of ProbateTry to shift as many assets as possible into forms that sidestep the probate court. You can make your bank accounts and investments payable on death (POD) or transfer on death (TOD). Instead of making your estate the beneficiary of your life insurance policy, you should identify on the policy's beneficiary designation the person or persons you want to receive the policy proceeds, and whether they are to split the money equally or follow a different formula.
Spare Your Family the Arguments and Second-GuessingIf you merely designate someone to serve as your decision-maker in your medical power of attorney but do not tell them precisely what you would want in a variety of situations, they will have to guess. Since you are asking people to make weighty choices for your benefit, you should provide them guidance. If they have to wing it, they may have guilt and regrets for the rest of their lives.
Communicate Your Wishes to Your Close Friends and FamilyMake sure that your loved ones know your wishes as to medical treatment in the event of catastrophic illness or injury and other choices you make, particularly if the choices are out of the mainstream or go against what some of your loved ones might prefer. Your family is less likely to contest or obstruct your wishes if they already knew about them.
Keep Your Papers Within ReachDo not make the mistake of putting the essential documents talked about in this article into your safe deposit box. It can take a court order to open a safe deposit box. By the time you get an order, it may be too late for your loved ones to use the documents. For example, if you place the instructions for your funeral in your deposit box, but your family has to wait a month for the court order, they will not get to read your papers until well after your burial. Put your documents in a logical place and tell a couple of trusted friends or relatives where to find them.
Update Your PapersChange is one of the few constants in life. If you leave bequests to your grandchildren by name in your will or trust but do not update it when more grandkids come along, they might miss out. You should update your documents whenever you experience a significant life event, like a marriage, death, or birth of a child or grandchild. You might also want to review your beneficiaries periodically. Even if there have not been changes in your life, you should take a look at your papers every three or four years.
Plan Your CeremonyWhether your preference is to be laid to rest in the family plot, have your ashes scattered on a mountaintop, or have a Viking ceremony (and no, those do not involve setting boats on fire), you can write up exactly how you want your final ceremony. If what you want is elaborate or expensive, make sure you set aside and designate funds to pay for your sendoff.
Some people have strong opinions about:
o Cremation versus burial
o Open-casket versus closed
o Funeral versus memorial service
o Secular versus religious theme
o Organ donation
If you anticipate your family will have a difficult time agreeing on the details of your arrangements, make the decisions yourself. Many people choose everything ahead of time, from the casket to the songs for the service.