Avoiding Probate

If you live in Maryland, you may want to consider avoiding probate if you expect your total assets at the time of your death to be less than $1 million. Because the value of the estate is under $1 million, there would be no Maryland estate tax. (The Federal limit is even higher, currently at $5 million.) You can use joint accounts which means that someone else other than you has access to your accounts and upon your passing, the other individual(s) named would have “rights of survivorship”. Ownership of the account passes to them automatically upon your death.

Another account which will avoid probate is a “payable on death” account. In that circumstance, you do not share ownership of the account with anyone else but at your death, the proceeds would be distributed to those you have designated as beneficiaries on the bank forms. Likewise, you can do the same thing with brokerage accounts by what is known as “TOD” or “transfer on death” accounts.

Please be advised, however, that if your total net assets that are held in your name or in one of these types of accounts exceed $1 million, you will be subject to Maryland estate taxation.