I am often asked: What is the probate process and how can I avoid it? Simply put, probate is the government supervised process of transferring assets titled in an individual’s name according to the terms of that individual’s last will and testament, or if the individual didn’t have a will, pursuant to Maryland’s laws of intestacy. While Maryland’s probate process is not unduly complicated, it often takes at least nine months or more to complete. The process can sometimes bring avoidable stress and hardship to surviving family members.
One of the simplest ways to avoid the probate process is to own property jointly with another individual. Examples of this would be owning a bank account or real property with someone else, usually a family member. Jointly held property bypasses the probate process. Ownership automatically passes to the surviving owner. Another method of probate avoidance is to name a beneficiary for assets such as retirement accounts or life insurance policies.
However, one asset that often is overlooked in the planning process is a car. Most of us own our cars in our names alone.
It sometimes happens that 99% of a Maryland resident’s assets are excluded from the probate process and yet his heirs are still required to open an estate simply to transfer title to a car. Why is this problematic? Someone will need to determine if the estate qualifies as a small estate or if a regular estate needs to be opened. Either way, there will be forms to fill out and file, and an attorney hired to assist if the heirs aren’t comfortable going it alone. There may be probate fees that need to be paid. Someone must be appointed to be in charge of the estate, and if there is no will listing who that person should be, some family members may argue who should serve in that role. Such disagreements could lead to judicial hearings.
Thankfully there is an easy way to avoid this outcome. The Maryland Vehicle Administration lets you designate a beneficiary for your motor vehicle, via MVA Form VR-471, available at http://www.mva.maryland.gov/. You may designate a family member, friend, or even a business to inherit one or more cars, trucks, motorcycles or recreational vehicles. However, special care should be taken in making those decisions as additional vehicle inspections and transfer fees may be triggered depending on whom you name as your beneficiary. Contact an experienced Maryland estate planning attorney to learn more about this process and other probate avoiding planning techniques.