The Maryland Probate Process: What Is It?
Probate is the court-supervised process of identifying the assets, debts, and beneficiaries of the person who passed away (the “decedent”). If the decedent had a will, the will tells us how to ultimately distribute their property. If the decedent died without a will, they died “intestate” and the law tells us who inherits what and how much.
It is important to remember that probate is a process. It is not a single set of papers to fill out or a one-time trip to the courthouse. The process can last 6-7 months on the faster side, or years if it is contested.
For a more detailed look at the process, take a look at our video Everything you need to know about Probate in 7 minutes.
The Maryland Probate Process: What To Bring to the Register of Wills
Remember you have homework to do before going to the courthouse to open the estate. For more details on what to do before opening an estate and what to physically bring to the courthouse, take a quick look at our video about what to bring to the courthouse.
When you go to the courthouse, bring with you:
- Multiple copies of the certified death certificate
- The original will
- Car titles
- Funeral contract and expenses
- Names and addresses of interested persons
- Real estate deeds
- Your driver’s license
In the beginning of the process, someone is identified who will be in charge of the estate and be responsible to file paperwork with the court and with the tax collectors. They be very important here in the Maryland probate process. We call this person the Personal Representative.
The Different Types of Estates
The last decision to make before opening an estate is selecting the kind of estate. There are two types of estates in Maryland: a Small Estate and a Regular Estate.
A Small Estate is an estate with probate assets valued at $50,000.00 (or $100,000.00 if the spouse is the sole beneficiary).
A Regular Estate in anything valued above that.
For more information on selecting the type of estate and valuing the assets, see our video on The Different Kinds of Estates.
What is a Personal Representative?
The Personal Representative is the person empowered by the government to act on behalf of the estate.
When the Personal Representative is appointed, they receive Letters of Administration form the court. This is the court order that allows them to get to work. As the personal representative of the estate, you will be expected to guide the estate through the probate process.
Responsibilities Of The Personal Representative:
- Identify and begin to value the estate’s assets.
- Secure, insure, and maintain estate assets to avoid loss of value.
- File an estate inventory, which is due within 90 days of being appointed.
- Use the Letters of Administration to work with the banks to change bank accounts from the name of the decedent into the name of the estate.
- Notify creditors of the decedent’s death and allow for the submission of claims.
- Pay certain estate expenses and taxes. Remember there are the personal taxes of the decedent as well as the federal estate tax, Maryland inheritance tax and Maryland estate tax that the Personal Representative must keep in mind.
- Pay valid debts and obtain the proper releases.
- Make ultimate distributions of estate property to the beneficiaries.
- Close the estate with the court.
What is a Will?
A will is a written document that tells everyone what you want to see happen with your property when you pass away. A will can be very detailed and include testamentary trust provisions for minors, gifts to charities, and pet trusts, or could be as simple as a “sweetheart will” that directs that all your property goes to your spouse.
Also be sure to read about what happens if you die without a will in Maryland.
What Happens if Someone Dies Without a Will in the State of Maryland?
When someone dies without a will, the government has an estate plan for them.
Dying without a will is called intestacy, and the government’s intestate succession plan will decide who gets your property. It depends on what other family members outlive you. Based on who your heirs and descendants are at the time of your death, that determines the starting point for the ultimate distributions.
In our article about dying without a will, we walk through some common scenarios and who gets what percentages of an estate of someone who died without a will.
Which Assets Go Through Probate?
A probate asset is anything titled in the name of the decedent alone at the time of their death. Probate assets are identified, valued, and reported to the court on the official inventory filed within 90 days of the Personal Representative being appointed.
A non-probate asset is anything the decedent owned that was not titled in their name alone but that they still had control over when they died. Non-probate assets are identified, valued, and reported to the court on the information sheet filed by the Personal Representative. Typical examples are jointly titled homes, retirement accounts with beneficiaries designated, and life insurance policies.
Probate assets go through probate. Non-probate assets transfer outside the probate process.
- If Mary owned a home in just her name when she died, that is a probate asset.
- If Mary also owed a joint bank account with her husband Paul, that is a non-probate asset and goes automatically to Paul.
The 7 Most Commons Mistakes Personal Representatives Make
There’s a lot to know about the probate process, so do your research and try to plan ahead. We see lots of common mistakes – avoid them by doing your homework.
1. Comingling Funds
As the personal representative, the estate’s money is not your money. Even if you are the only beneficiary, it is very important to keep your money separate from the estate’s money.
➡Deposit your money into your accounts.
➡Deposit estate money into the estate accounts, and keep track of every dollar you spend from estate funds.
Comingling has very bad personal consequences for the Personal Representative, and can make them personally responsible for mistakes.
2. Failing to Maintain Estate Property
One of the functions of the Personal Representative is to maintain the status quo of the decedent’s property. This means pay the mortgage or other encumbrances from estate funds to make sure the property is still owned by the estate at the end of the probate process.
Don’t stop paying a mortgage or a car loan and have the estate property repossessed or foreclosed on, that could result in the estate being worth less and the Personal Representative having to pay the beneficiaries for the loss out of their own pockets.
3. Failing to Insure or Secure Estate Property
It is important for the Personal Representative to insure estate property. This means you should keep paying the home-owners and car insurances during the probate process. It is important to make sure that if something happens, like a fire or a car crash, that the estate’s property is insured.
It is also important for the Personal Representative to secure property. This means to make sure estate property is not stolen, or that property is not abused or destroyed.
4. Incorrectly Valuing Property
Different types of property requires different methods of valuation. Some property requires a professional appraisal (don’t worry we have appraisers we work with), some requires a trusted reference source, and some can be ascertained from account statements.
It is important to remember that you are valuing property on the date of the decedent’s death.
It is important to be honest about value. You may think you are doing yourself or someone else a favor by undervaluing property, but you are setting the “taxable basis” for it, and not being truthful can actually cost you a lot more in taxes later on when the property gets sold.
5. Not Communicating With Beneficiaries
Experience tells us that a lot of problems can be avoided by communicating with the beneficiaries along the way during the process. Beneficiaries who are unhappy with their ultimate distributions will be more difficult for you to deal with than if you update them along the way with the realities of the situation.
Uninformed beneficiaries may have unrealistically big expectations, whereas informed beneficiaries will have more realistic expectations.
6. Not Understanding Taxes
Maryland has some unique aspects to its probate system, and taxes is one of the primary differences between Probate in Maryland and Probates in other states such as Louisiana Probate or California Probate.
For more information on the differences, we did a deeper dive into some of the differences in the video What makes Maryland Probate Unique.
Maryland has an estate tax that is collected by the Comptroller of the Treasury. It is graduated and depends on the amount of estate property. Estate property is the combined value of the probate and non-probate assets. It is paid by the Personal Representative on behalf of the estate.
The federal government also an estate tax that is collected by the IRS. It is graduated and depends on the amount of estate property. Estate property is the combined value of the probate and non-probate assets. It is paid by the Personal Representative on behalf of the estate.
Maryland has an inheritance tax that is imposed on certain people who receive property. The inheritance tax is 10% and it is collected by the Register of Wills. The person receiving the property is responsible for paying the tax, although that job is often passed on to the Personal Representative.
7. Improper Distributions
It is imperative that the Personal Representative only pay valid debts and valid claims. The probate process is designed to allow creditors to file claims and prove their legitimacy. It is important that the Personal Representative not be tricked into playing claims that are not valid, and that when claims are paid the Personal Representative receives the correct releases for the estate.
For a deeper dive into some of these common mistakes, check out our video on the Common PR Mistakes.
Real Estate in Probate – What Does the Law Say in Maryland?
What happens to real estate in probate in Maryland is pretty straight forward. When real estate goes through probate, it is an asset of the estate. As an asset of the estate, the beneficiaries can decide what they want to do with it as an ultimate distribution: do they keep it themselves, does one beneficiary buy the other out, do they sell it and divide the proceeds?
What about real estate owned by a Maryland resident that is located in Virginia, South Carolina, or some other state besides Maryland?
If that real estate was in the name of the decedent alone when they died, a separate probate action needs to be opened up in the state where the real estate is located. That means some people require more than one estate to tie up their affairs.
What about land owned in Maryland by an out of state resident who probated their will where they lived (another state)?
A second probate needs to be opened in Maryland where that real estate is located.
For more information on real estate in a Maryland probate, spend a few minutes watching this video.
Need Advice on the Probate Process or Planning Your Estate?
At Chesapeake Wills & Trusts, we’re here to help you protect your family, assets and life savings.
Check out more of our helpful resources:
- Maryland Register of Wills Forms – What You Need to Know
- Dying without a Will – What the Law Says
- Preparing for Probate Court
- Advanced Directives – How they Can Prevent Conflict During Your Lifetime
As Maryland estate planning attorneys, we are passionate about educating our clients so they can make the right decisions to secure a safe, happy, financially stable future.
Contact Us Now, Download Our Free Book & Sign Up For Our Free Estate Planning Webinar
For more information to help you understand Maryland Probate, download the free probate guide that was designed with you in mind. It will help you further understand the process and help guide you through the twists and turns of Probate.
An Introduction to Settling an Estate Through Probate is written by Maryland estate planning attorney Greg Jimeno.