Estate planning is an essential aspect of securing your family's financial future, yet it is often overlooked. The history of estate planning can be traced back to ancient Greece, where the Athenian statesman, Solon, first formalized the concept of a will in the 6th century B.C. Fast forward to the present, and estate planning has become a critical aspect of the financial planning process for individuals and families in Maryland and across the United States. In this blog article, we will discuss the history of estate planning, the importance of having a will, and the benefits of utilizing trusts to safeguard your family's wealth.
A Brief History of Estate Planning in Annapolis
The roots of estate planning can be traced back to ancient Greece, where the Athenian statesman, Solon, is credited with introducing the concept of a will. Prior to Solon's reforms, a person's wealth would revert to the state upon their death. Solon revolutionized the system by giving individuals the ability to devise their wealth as they saw fit. This fundamental principle of allowing individuals to control the distribution of their assets after death has endured through the centuries, eventually making its way to the United States and modern-day Maryland.
The history of estate planning in Maryland can be traced back to its founding as a British colony in the 17th century. As one of the original thirteen colonies, Maryland has a rich history that has shaped its estate planning laws and practices over the centuries.
Colonial Era
In the early days of the Maryland colony, estate planning was primarily governed by English common law. During this time, the concept of "primogeniture" was the norm, which dictated that the oldest son would inherit the entire estate of a deceased landowner. This practice ensured the continuity of land ownership within families and was prevalent throughout the colonies.
Annapolis is home to the Maryland State House, which houses the Maryland General Assembly, the legislative body responsible for creating, amending, and repealing laws related to estate planning in the state. Over the years, the General Assembly has passed numerous bills that have shaped Maryland's estate planning landscape, including laws pertaining to wills, trusts, intestate succession, and estate administration.
The Maryland General Assembly, established in 1634, began to enact local laws to address estate planning and inheritance issues. One such law, the Maryland Intestate Act of 1674, provided a framework for the distribution of property when someone died without a will or "intestate." The act laid out the guidelines for the distribution of assets among a deceased person's spouse, children, and other relatives, which significantly deviated from the English common law practice of primogeniture.
19th and 20th Centuries: Throughout the 19th and 20th centuries, Maryland continued to develop and refine its estate planning laws. The Married Women's Property Acts, passed in the mid-19th century, granted married women the right to own and control their property, a significant change that affected estate planning practices and which Maryland adopted in 1840. As society progressed, laws were updated to reflect evolving views on inheritance, property rights, and the importance of planning for the future.
Modern Estate Planning in Maryland: Today, estate planning in Maryland is governed by a combination of state laws and federal regulations. The Maryland Estates and Trusts Article is the primary source of law for matters related to wills, trusts, and the administration of estates. This comprehensive code provides detailed guidelines for drafting wills, creating trusts, and administering estates, ensuring that the wishes of the deceased are respected and carried out.
In addition to state laws, federal tax laws play a significant role in estate planning in Maryland. The federal estate tax, gift tax, and generation-skipping transfer tax all impact how estates are planned and administered. Proper estate planning in Maryland involves taking these taxes into consideration to maximize wealth preservation and minimize the tax burden on beneficiaries.
Estate planning in Maryland has evolved significantly over the centuries, from its early colonial roots to the modern, sophisticated legal framework that exists today. As Maryland residents continue to plan for their families' futures, they can benefit from the rich history and comprehensive legal framework that guides estate planning in the state.
The Importance of Having a Will
Despite the long-standing right to leave one's wealth to their intended beneficiaries, a staggering 6 in 10 U.S. adults do not have a will, according to the AARP (formerly called the American Association of Retired Persons). When a person dies with assets in their name but without a valid will, they are considered to have died "intestate," and the laws of their state of residence determine the distribution of their assets. This can lead to unintended consequences and may not reflect the true wishes of the deceased.
The Role of Probate
It is important to understand that even with a valid will, an individual's assets must go through a government process known as "Probate." This process is public, intrusive, expensive, and time-consuming. A common misconception among legal consumers is that having a valid will allows them to avoid Probate. However, assets solely in a person's name when they die must go through Probate, whether they have a will or die intestate.
The Value of Trusts in Estate Planning
To avoid the complications and costs associated with Probate, individuals and married couples are encouraged to explore the benefits of trusts. A trust is a valuable estate planning tool that can protect a family's wealth throughout their lifetime and even after their death, without involving the government in the management and distribution of their assets. Trusts offer numerous advantages, such as privacy, control, and flexibility, making them an attractive option for those looking to secure their family's financial future.
Take the First Step Towards Comprehensive Estate Planning
If you are interested in learning about proper estate planning, Stouffer Legal offers free online webinars to help you understand the process and make informed decisions. To access one of these webinars, simply click this link. After viewing the webinar, you will be entitled to a free consultation with one of Stouffer Legal's experienced estate planning attorneys. Don't leave your family's financial future to chance; take control today by exploring the benefits of estate planning with Stouffer Legal.
