One of the most common ways to transfer accumulated wealth and reduce estate taxes is through gifting or transferring assets to designated individuals or institutions. Specific designations aim to keep Maryland assets out of probate court, but problems can occur if the person dies before the transfer is complete.
Some assets may have to go through probate
Transfers deemed incomplete must go through probate to determine the validity of the deceased’s wishes, making estate administration more challenging. Examples of incomplete gifts or transfers include checks written to a beneficiary during someone’s lifetime, but that individual dies before the recipient cashes the check. The intended beneficiary may not be able to get the intended money as the person issuing it no longer has control over it.
Rules governing incomplete transfers are complicated. Frequently, incomplete transfers result in higher estate taxes. The laws of intestate succession will apply to incomplete transfers. Maryland intestate law provides that the first $100,000 of an estate going through probate will go to the decedent’s spouse. If the decedent has no spouse, the children inherit the assets. The incomplete transfer assets may never reach the intended beneficiary.
Going through the probate process
Executors have a significant task to undertake. Probate law requires you to complete specific steps when administering an estate. These include gathering an accounting for estate assets, notifying creditors of the death, paying final bills and filing a final tax return, paying estate taxes and distributing any remaining assets according to the will, trusts or probate court instructions.
Even though your relative or close friend may have selected you to be their representative, you may find some of the steps confusing. Ensure you get help if you don’t understand some steps, especially when incomplete transfers are involved.