Estate planning can be a confusing and difficult process for our clients. The mere decision to start the process of creating an estate plan forces one to face the unpleasant reality that we will not live forever. Others will talk themselves out of consulting with a qualified estate planning attorney due to several common myths. Below, I will discuss a few of the most frequent misconceptions people have regarding estate planning.

Myth #1: Only the Rich Need an Estate Plan

When a story about estate planning or a post-death probate dispute makes the news, these stories typically involve either a celebrity or wealthy businessperson. When the public follows these stories in the news or reads about them on the internet, the celebrity or wealthy individual either did not have an estate plan, had a flawed estate plan or there are family members angry about the terms of the plan. A mistaken reaction many have to hearing these stories is only the wealthy need an estate plan because they have so much in assets and, therefore, they can afford to have a comprehensive estate plan. A common reaction is to think by comparison, when an average person thinks about their own planning needs, they assume their possessions are unworthy of necessitating an actual estate plan.

This reaction is not only wrong, but has the potential to wreak havoc on both themselves and their families. For starters, estate planning is not merely about post-death administration. While it is true that a suitable plan permits an individual to determine who inherits their money and property upon death, there is much more to the planning process. For instance, a comprehensive plan also addresses what happens if one becomes incapacitated and is unable to manage their own affairs. In this instance, it is best for the person to name someone to make decision on his or her behalf. Without an estate plan, court-supervised guardianship proceedings will need to be initiated to appoint someone to make the person’s medical and financial decisions on their behalf. Court-supervised guardianship is not only time-consuming but also expensive and public. Oftentimes, this process leads to disagreement among the family members regarding who should serve as guardian and how decisions should be made.

Even with clients with modest means, it is vital for them to consider who receives their hard-earned assets when they die. Without a plan, Maryland law will dictate who receives what, often contradictory to the individual’s actual desires. Therefore, it is best for all individuals to formalize their wishes in an estate plan.

Myth #2: My Spouse Will Get Everything, So I Don’t Have to Plan

It is common for married couples to jointly own assets, including real property, bank accounts, etc. When a couple owns property jointly or as tenants by the entirety, upon the death of the first spouse, the surviving spouse becomes the sole owner automatically. This is often the preferred outcome.

That said, there are dangers to overly relying on this approach. While it is convenient for bank accounts and property to pass automatically to the surviving spouse, this offers no protection. For example, if the surviving spouse gets in a car accident and gets sued after the jointly owned money and property automatically became solely owned by the surviving spouse, those assets would become available to creditors to satisfy any judgments against the surviving spouse.

Another scenario is a surviving spouse remarrying. When jointly owned property becomes the sole asset of the surviving spouse, they can spend it in any way they wish, without consideration for either the predeceased spouse’s wishes or remaining family members. The surviving spouse’s new spouse could theoretically receive the funds that the predeceased spouse intended to pass to their children. With the increasing number of blended families, this scenario is a real concern for many clients.

To clarify, there are many estate planning tools available to protect a person from this scenario short of disinheriting his or her spouse. It is best for estate planning practitioners to sit down with their married couple clients and proactively plan what would happen to their joint assets when one dies. This would ensure that the survivor is provided for, and the remaining assets are gifted in a way that is agreeable to both parties.

Myth #3: A Will Avoids Probate

Many potential clients mistakenly believe that after they have created a Will – whether drafted by an attorney or by using a do-it-yourself online form – they have an estate plan that avoids the probate process. Unfortunately, they are incorrect.

Obviously, a Last Will and Testament is an effective way for our clients to designate a person to wind up their affairs after their passing and for them to determine who will inherit their hard-earned assets. Furthermore, if necessary, a Will can serve as a method to appoint a guardian to care for minor children. Clients must understand that following their passing, their Will must be submitted to the Orphans’ Court to begin the process of distributing their assets. While the level of the Orphans’ Court’s involvement will vary depending on the circumstances, regardless the Will becomes a matter of public record, and the estate administration process is not private.

Probate proceedings differ depending on the state in which the Decedent was domiciled. In Maryland, estates are supervised by Orphans’ Court judges that oversee every step of the administrative process. Our probate court judges must approve the personal representative’s actions. All required documents must be filed with the Orphans’ Court and sent to all interested persons. Unfortunately, this can be a very time-consuming and expensive process.

Whenever a personal representative in an estate must take an action, he or she will need to file a form with the Court and send it to all interested persons. In contentious matters, this opens up the possibility for disagreements among the parties, often resulting in additional attorneys’ fees. For those clients looking to avoid probate and keep the process of transferring their assets private, the use of a revocable living trusts may be an attractive option to explore.

Zachary W. Worshtil is a Partner at Powers & Worshtil, P.C. He is also a member of the PGCBA Board of Directors and co-chair of the Probate, Estates, Trusts & Elder Law Section. He concentrates his practice primarily in estate planning, estate and trust administration, and probate litigation.