Probate is the process by which a deceased person’s financial affairs are concluded and their assets are transferred to their legatees (if through a will) or heirs (if without a will). Because many people pass away with minimal probate assets, the State of Maryland provides a less burdensome process by which assets can be transferred for such estates.
When the value of a decedent’s property subject to Maryland probate is less than $50,000 (or less than $100,000 when a surviving spouse will be the sole legatee or heir), the estate under is allowed to be considered a “small estate” and use a simplified set of probate rules.
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To determine whether the $50,000 or $100,000 amounts have been exceeded, you will calculate the fair market value of all assets owned by the decedent that would be part of the probate estate. Non-probate assets, those that pass outside of probate, will not be included in the estate’s value for this purpose. Non-probate assets generally include:
- Property that is titled jointly with a right of survivorship or as tenants by
, as is often the case with a home or bank account between spouses; and, entirety
- Most property that passes to heirs via a beneficiary designation, such as retirement accounts, life insurance policies, and property held in trust.
Conversely, assets titled solely in the name of the decedent that are not of the type permitting beneficiary designations will generally be probate assets. However, any debts of the decedent secured against the probate assets will be subtracted from the estate’s value when determining whether it qualifies as a small estate.
Qualifying as a small estate does not mean you will be able to completely side-step probate. A Maryland small estate designation only allows you to use an abbreviated form of probate with less burdensome requirements. In Maryland, for property that’s supposed to be included in a probate estate to legitimately pass from a decedent to an heir, some form of probate will always be required. Of course, people naturally attempt to avoid probate, particularly when the first spouse passes, but complications sometimes force the estate to be opened. For instance, the MVA may prevent the family from transferring a car titled to the decedent without an estate being opened. In such cases where that vehicle may be the only item of value in the estate, the availability of the small estate procedure can be invaluable.
While Maryland estates with property will require probate, qualifying as a small estate certainly simplifies the job.
For additional information or to discuss wills, trusts, estates, or probate matters, please contact Jeff Rogyom at (410) 929-4578.
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