A will is a written instrument, which has been properly executed, and not revoked, which provides for the disposition of an individual’s property upon his or her death.
This is also referred to as testate succession. It is very important that you use an attorney to draft a will for the correct disposition of your property, correct tax planning, if needed, and correct planning for minor children. Also, as basic as it sounds, that you ensure that the will is executed properly.
A living trust is an “entity” that is created by a person while alive to hold his or her property. Upon death of the creator, that entity continues to exist, so the property owned by the trust does not have to pass through probate. The trust is created by a grantor or settlor. The trust is managed by a trustee. The wealth within the trust benefits a beneficiary or several beneficiaries. Initially, these three persons may all be the same. To be effective, an individual should transfer their assets that would pass through probate into the trust while they are still alive.
These estate planning tools are used for probate avoidance and for property management. They can include tax planning mechanisms as well as planning mechanisms for minor children or beneficiaries with disabilities.
Powers of attorney are very important planning tools,
now governed by a specific Maryland statute. Individuals should sign the Maryland General or Limited Power of Attorney Form.
A power of attorney is a document where a principal appoints an agent to act on his or her behalf. The power of attorney can be general or specific. The power of attorney can also be effective immediately or can be “springing” which means it becomes effective upon the occurrence of an event. The power of attorney is an important tool because it allows the agent to manage the person’s affairs when he/she becomes disabled.
Maryland’s Health Care Decision Act adopted in 1994 permits an individual to execute an advanced directive.
This is a valuable planning tool with regard to your own health care decision making. You can sign a living will, which designates your own decision to be interpreted at some time in the future when you are unable to communicate your decisions, or you can sign an appointment of a health care agent, which appoints another individual who can make decisions on your behalf if at some time in the future you are unable to communicate your own decisions.