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Estate planning in Maryland – what should I do with my primary residence?
Dated: November 18 2023
Estate planning is a crucial component of responsible financial management, ensuring that your assets are distributed according to your wishes upon your passing. In Maryland, creating a basic trust-based estate plan can offer numerous benefits, one of which is the opportunity to retitle your primary residence into a revocable living trust. In this article, we will discuss what you need to know about establishing a trust-based estate plan in Maryland and why it may be advantageous to retitle your home into thattrust.
Estate planning in Maryland involves a range of legal tools and strategies to manage and distribute your assets efficiently. These tools can help you minimize taxes, avoid probate, and provide for the seamless transfer of assets to your heirs. One of the most fundamental aspects of estate planning is the creation of a revocable living trust.
A revocable living trust is a legal entity that holds and manages your assets during your lifetime and allows for their efficient transfer upon your death. As the grantor (the person creating the trust), you have full control over the trust and can amend or revoke it at any time. Note that as part of a trust-based estate plan, you should also receive a will (yes, when you have a trust, you still need a will), powers of attorney (which are vitally important should you become incapacitated) and an advanced directive, sometimes referred to as a living will.
For purposes of this article, we will focus on the potential benefits of retitling your Maryland primary residence into your revocable living trust. ‘Retitling’ assets into your revocable living trust comes at the end of the process because, well, you must have a validly executed revocable living trust before you can retitle anything into it!
If you are single, the process will likely only require one deed. If you are a married couple, you will want to first have your attorney review your deed and determine how you currently hold title to your property. If you lived together before you were married, or if you owned a home in one name prior to marriage, depending on your situation, you may need to have two new deeds created – one to get the property into ‘Tenants by the Entirety’ (or TBE as it’s often abbreviated) and another to then take that TBE property and title that TBE property into the name of your revocable living trust. Maryland has a wonderful law that, if followed carefully, allows otherwise elusive ‘asset protection’ to apply to the creditors of your spouse as it relates to your primary residence once it is properly retitled to your revocable living trust. In fact, even if you sell your home and downsize, you can continue to protect the proceeds of that sale (by putting them into an account in the name of that same revocable living trust). That is a powerful tool to have as part of your estate plan. Two important notes here:
1) We are talking about your primary residence in Maryland. If you own other properties in other states, or even in Maryland, you must talk to an experienced estate planning attorney before you attempt to change title to those properties
2) There are several specific steps that must be taken for your home to be protected against any future claims against your spouse and one of the most important is to be certain that there are no creditor claims against your spouse already.
Another benefit to retitling your primary residence into your revocable living trust is probate avoidance. Because our homes here in Maryland are often very valuable, and because probate fees (and any associated attorney fees) are assessed based on the value of the probate estate, the analysis to determine whether to invest in a quality estate plan can be relatively straightforward and doing so can help your loved ones avoid probate, maintain privacy, and secure your legacy.
Amy Lazas, Esq., M.A.S.
Providence Law Group, LLC
6990 Columbia Gateway Drive, Suite 240
I would like to acknowledge the assistance of ChatGPT in generating and refining content for this article.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.
It is essential to consult with a qualified legal professional for advice specific to your situation.
No attorney-client relationship is created by reading this content. The information presented here may
not be current or accurate. Laws vary by jurisdiction, and the information provided may not apply to
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Estate planning is a crucial component of responsible financial management, ensuring that your assets are distributed according to your wishes upon your passing. In Maryland, creating a basic trust