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Shielding assets from probate in Maryland

On Behalf of | Dec 13, 2023 | Estate Planning - Estate Administration & Probate

The probate process has the potential to be long, complex and costly.

Preparing in advance can save your heirs a great deal of worry and trouble. There are certain steps you can take to make some assets exempt from the probate process.

Use a living trust

Establishing a living trust is a common strategy to shield assets from probate. By transferring your assets into one during your lifetime, you maintain control over them while avoiding the probate process upon your passing since the assets are in the trust’s name rather than your own.

Become a joint owner

Another effective way to bypass probate is by opting for joint ownership with rights of survivorship. When you co-own an asset with this arrangement, it automatically passes to the surviving joint owner upon your decease.

Designate beneficiaries for accounts

For retirement accounts such as IRAs or 401(k)s, naming beneficiaries ensures a direct transfer of assets to them, bypassing the probate process. Opting for payable-on-death or transfer-on-death designations for bank accounts and securities also allows you to name beneficiaries who will automatically receive the assets upon your death.

Gift assets during your lifetime

Consider gifting assets to your heirs during your lifetime as a proactive approach to reducing the size of your estate subject to probate. By staying within the annual gift tax exclusion limits, you can transfer assets to loved ones while minimizing the impact on your estate’s probate exposure.

According to SmartAsset, under 23% of middle-aged Americans do not have estate plans in place. By reallocating and designating assets ahead of time, you can keep them out of probate and ease the process for your inheritors.