Essential estate planning documents

          Before a determination can be made as to what estate planning documents should be prepared for you, it is important to first inventory your assets and determine what your estate planning goals are.  Generally the goal of estate planning is to create a plan which provides for the management and preservation of your assets during your lifetime and for the disposition of your assets upon your death. A well-crafted estate plan can ensure financial stability for your spouse, your children, and your grand children, minimize potential taxes, promote family harmony, and provide guidance on how you wish to be cared for as you age or become incapacitated. There are three  essential documents which should be utilized to achieve your estate planning goals. Depending upon your circumstances, the preparation of other documents may also be essential to achieve your goals. Those documents  will be referenced later on in this article. 

            In addition to preparing the appropriate estate planning documents, you should also periodically review your financial accounts to be certain that the "payable on death" and "beneficiaries" designations you have made on your bank accounts and retirement accounts are living individuals whom you wish these accounts to pass to upon your death. This is important  because if at the time of your death all of the individuals you have designated are deceased,  those accounts will be considered  to be your part of your probate estate and will be administered through the Register Of Wills. You should also periodically review your estate planning documents to be certain that they reflect your wishes, address your circumstances, and the laws of the state of your domicile. The following is a synopsis of the three essential estate planing documents.

Last Will and Testament:

          A Last Will and Testament is a written document whereby you appoint individuals to serve as your Personal Representative, and you identify the individuals who you wish to receive your personal and real property at the time of your death. To be effective your Will must be executed according to the laws of the State where you reside.  There are many reasons to include a Will in your estate plan. First, your Will identifies the individual or individuals who you wish to serve as your Personal Representative. The person designated will step into your shoes at the time of your death, and will be responsible for collecting your assets, paying your creditors, and distributing your assets as you have directed, or if you have not, as required under Maryland law. In your Will you can state that your Personal Representative is not required to obtain an expensive Personal Representative bond.  You  may also designate a guardian for your minor children, and the individual(s) who you wish to serve as Trustee of any Trust you have created in your Will for your spouse, children, or grandchildren. If you have not named individual(s) to hold the foregoing provisions your Will, the Court will appoint individual(s) to fill those positions, and they may not be the individuals you would have chosen. 

          Of  upmost importance, in your Will you can designate the individuals whom you wish to receive your property upon your death. If you have not have an executed Will at the time of your death, you will be determined to have died without a Will, or "intestate", with the result that your property will be distributed to those persons who are designated under Maryland law to receive your property. Again, these may not be the individuals you would have chosen to distribute your property to. 

           In addition to including the above mentioned provisions in your Will, you may also  include provisions which minimize taxes, grant individuals the right to remain in your home after your death, authorize individuals to carry on your business, as well as other pertinent provisions, depending upon your circumstances.  

              It is important to note that even if you have created a Revocable Living Trust, you still need to execute a Will.  Such Wills are commonly referred to as  "Pour-Over Wills", for the reason that they provide that your assets are to pour over into your Trust, and are to be administered and distributed to the individuals you have named as beneficiaries therein. 

Durable Power Of Attorney:

          In a Power Of Attorney, the person creating the document, known as the Principal, appoints an Agent or Agents to handle their financial affairs.  In Maryland, all properly executed Powers Of Attorney are considered to be durable, and thus are not voided, upon the disability of the Principal.

          I find that some clients minimize the  need for a Power Of Attorney. I disagree for the reason that a Power Of Attorney allows your Agent to act for you during your lifetime. If you have not executed a Power Of Attorney, and you have assets which need to be managed (e.g stocks) or own real property titled in your name or with others, if you have not executed a Power Of Attorney, someone will have to file a Petition For Guardianship with the Court. A Guardianship proceeding is a contested court action, which is  costly and time consuming and could have been avoided if the Principal had executed a Power Of Attorney. 


          Since 2010, Powers Of Attorney which are created in accordance with "The Maryland General and Limited Power Of Attorney Act" (the "Act") are more effective than prior Power Of Attorney forms. This is because the Act provides that if a financial institution refuses to accept a Power Of Attorney which is prepared in accordance with the Act the Agent may file an action seeking enforcement and the financial institution is required to pay the Agent's attorney fees. A properly executed durable Power Of Attorney wherein an Agent is appointed to stand in the shoes of the Principal, who executes the Power Of Attorney, can prevent difficulties which may arise if the Principal becomes incapacitated. That is, a properly executed Power Of Attorney can avoid the need for a guardianship proceeding, which is an  adversarial, expensive and time-consuming process. 

Advance Medical Directives:

          Maryland law provides two methods by which an individual can designate an individual or individuals to make health care decisions for them 

          First, an individual may execute a Health Care Power Of Attorney, wherein they appoint another individual or individuals to be their agent to make health care decisions for them. This appointment can be effective upon the date that the document is signed, or provide that it is only effective when the principal is determined by two physicians to be incapable of making an informed decision regarding their health care. 

           Maryland law also permits the creation of a Living Will, which usually provides that if physicians have determined that an individual is not capable of making an informed decision regarding their health care, and they are in a terminal condition, end-stage condition, persistent vegetative state, or coma, that the individual may state their wishes that life sustaining procedures be continued for as long as possible, or that certain medical interventions be terminated and they be allowed to die a natural death.

            Both the Health Care Power Of Attorney and Living Will have been codified in Maryland into one form entitled an "Advance Directive".  I believe that an Advance Directive is an important document to include in your estate plan.  For example, if you have not executed a Health Care Power Of Attorney, your Agent will be chosen according to Maryland law, and that individual may not be the person you would have chosen to make health care decisions for you.  Additionally, if you have not executed a Health Care Power Of Attorney,  and you are a widow with five children, under  Maryland law, all of your children will be appointed to serve as your health care agent, and if they do not unanimously agree as to the health care action which should be taken, you could  be kept on life support until the hospital board can reach a determination.

              Obviously, it is also important for you to specify your wishes regarding the administration of life sustaining treatment in a Living Will. For example, if you do not wish to receive hydration and food by mouth, or if you wish to have all pain medications and palliative  care provided to you to relieve your pain and suffering your Living Will should state your wishes. You may also specify in detail, how you wish to be cared for during your final days, and whether you wish to donate your body and state your wishes regarding the burial or cremation of your body. 

              An Advance Directive should not be confused with the MOLST Form which was approved for use in Maryland in January 2013, and replaces the "Do Not Resuscitate Form" in this State. The MOLST form was developed for use by emergency medical services personnel.  Emergency services personnel who are commonly summoned when you dial "911", are not bound to adhere to an Advance Directive or a hospital's  Do Not Resuscitate Order in an outpatient setting. Emergency personnel are required to attempt resuscitation or other life-saving treatment unless a doctor who is physically present instructs them not to do so. Even if the emergency personal are shown an executed Advance Directive which states resuscitation is not to be provided, they may not waive their obligation under the law to revive and transport you to the hospital. Accordingly, if you wish to give emergency personnel instructions regarding the administration of life sustaining treatment, you should confer with your physician, who is required to  question you regarding your intentions and complete the MOLST form. 

Other Estate Planning Documents:

               Depending upon your circumstances and goals, your estate plan may also include other documents. One such document is an inter vivo trust, commonly referred to as a revocable living trust. A revocable living trust is a useful tool to manage property during the creator's lifetime, and upon their death.  It may also be advisable to include the creation of a Life Estate Deed, with full powers, in your estate plan. Before you decide to implement the foregoing documents or others in your estate plan, you should confer with a estate planning attorney, who can review your circumstances and goals and provide the appropriate course of action for you.

Prepared by Valerie A. Rocco, September, 2017