Dynamics of Maryland Estate Planning

Estate planning is state specific, and Maryland is one of the few jurisdictions that has both a state estate tax and an inheritance tax. Other local jurisdictions do not have both tax systems.  Because of the interplay of those tax systems along with the federal tax system, it is usually helpful to work with a Maryland attorney who is familiar with Maryland law to understand the ramifications of planning in the State of Maryland.

If you are interested in understanding the dynamics of Maryland estate planning, an experienced estate lawyer can help. A Maryland estate planning lawyer has an understanding of local laws and procedures that are necessary when building your plans for the future.

First Steps to Estate Planning

The first step in estate planning in Maryland is to complete the estate planning questionnaire. The estate planning questionnaire is meant to be a guide for the client so that they can begin thinking about some of the decisions that they will have to make during the estate planning process. It is also an opportunity for them to gather information regarding their financial holdings and do a bit of research that is often necessary when assisting with the coordination of estate planning.

Whether a couple is married or living together, they could benefit potentially from estate planning. When couples begin estate planning, they sometimes bring a prenuptial agreement after they have been married. It is important to take a look at what the client’s goals are and their overall assets to determine what estate plan would be a good fit. There are not specific steps that are overarching or recommended for all couples, but it is a good idea to begin the process of generally reviewing and seeing what estate planning documents could be a good fit.

Making Estate Plan Adjustments

Estate planning is often brought on by major life events, triggering individuals to review, update, or to create a new estate plan. Those generally include marriage or divorce, a birth of a child or grandchild, a move to another estate, a significant increase or decrease in assets, a death in the family or a significant change to tax laws.

For example, under the new presidential administration, there has been a proposed tax reform change that, if enacted, would potentially result in reviewing documents for clients who have already been through the estate planning process and perhaps causing the client to update their plan in light of the new tax law.

Multiple Marriages

Multiple marriages often lead clients to create estate planning documents that are specific to their family dynamic, wishes, and needs, because multiple marriages or a second marriage may be bound in some part by a prior divorce agreement or separation agreement. The estate planning agreement itself may impact the range of flexibility that a client has in future estate planning. For example, some settlement agreements will require that the spouse or children from the first marriage remain as the beneficiaries of an individual on retirement. If that is case, that asset may no longer be able to pass on to that individual’s second marriage or second family. Because of those certain circumstances, estate planning for second marriages is unique to the client and assets and to their specific fact patterns and are typically custom drafted to ensure that the client’s wishes and needs are met.