Often the nature of wills and trusts are such that competing interests arise. A careful look at the issues is suggested, and by experienced counsel. Matters that arise to the level of a dispute require a detailed and knowledgeable assembly and review of the underlying documents. Counsel is advised for legal review, research and strategy to fashion a remedy.

A “transition binder” (or “how-to folder”) is one of the most valuable gifts you can leave for your family. While many detailed versions of “what to do in case of my death or disability” forms exist, they are often overly complicated and left incomplete.

Burgess Law recommends starting with a few key items and building from there:

• Annual Statements and Last Year’s Tax Return
  • Bank Accounts, IRAs, 401ks, pensions, investment accounts
  • Statements can be net worth and/or income expense from Quicken
• Passwords for digital assets and social media
• Net worth or income/expense statements (e.g., from Quicken)
• Contact Numbers for Advisors, both Financial and Health and others, etc.
• Estate Planning Documents which include wills, trusts, powers of attorney, and health care directives
• Checklist for Disability / Death to-dos:
  • Disability care plan and alternatives / Caregiver Agreements (e.g., family members)
  • Funeral or memorial gathering plan
  • Contact list for memorial gathering
  • Photo thumb drive for memorial gathering
  • Adult child on funeral account or prepay funeral
• Final To-Do: Sell the baseball and stamp collections, and the Florida or West Virginia lot or timeshare, now.

Probate or estate administration fees vary from state to state. It is not unusual for persons in high probate fee states to use account designations or trusts, as will- alternatives to avoid or limit these fees. Maryland tends to have lower probate or estate administration fees, thus allowing professionals more flexibility in selecting planning strategies. Trusts are not for everyone, especially in Maryland. Options should be considered and discussed.

Burgess Law encourages a multidisciplinary approach and advises clients to work with financial planners. Their work is essential and supports the drafting and administration of the trusts and wills we prepare.

With the new high exemptions, most people will no longer be subject to the federal estate tax, but this fact should not be interpreted toas to mean that planning is not necessary. Federal estate, gift and GST taxes are but one component of the myriad of issues addressed in the estate planning process. In addition, many states including Maryland now impose state estate tax, and the state estate tax exemption, if any, may be much lower than the federal exemption. Many practitioners have shifted their planning focus to cCapital gains tax on assets held within an estate or trust.

The federal gift, estate, and GST tax exemptions were set at $13.99 million in 2025. An individual can transfer property with value up to the exemption amount either during lifetime or at death without paying any transfer tax. In other words, any portion of the exemption used during lifetime reduces the amount of exemption available at death for estate tax purposes. For example, if you made a lifetime taxable gift of $2 million in 2025, your remaining exemption amount that could be used by your estate at your death would be $1.99 million ($13.99 million exemption, less the $2 million lifetime gift). The GST exemption essentially allows the earmarking of transfers, made during lifetime or at death, that either skip a generation or are made in trust for multiple generations. Certain gifts are not applied toward the exemption, such as “annual exclusion” gifts and direct payments to medical or education providers and can be made completely tax-free.
Transfers between spouses and to certain trusts for spouses, made during lifetime or at death, may be made without the imposition of any tax. These transfers also do not use any exemption. This is known as the “unlimited marital deduction.” Maryland taxes estates over $ 5 million dollars and $10 million per married couples.

In both federal and Maryland tax laws, estate tax exemption is “portable” between spouses so that a surviving spouse may take advantage of a deceased spouse’s unused exemption (DSUE) through lifetime gifts by the surviving spouse, or at the surviving spouse’s later death. “Portability” is an important concept for surviving spouses and there is a limited time to elect or file for portability.

Inheritance tax is a type of tax on the right to inherit a bequest has largely been phased out throughout the country. However, Maryland is a state that still has an inheritance tax but there are many exemptions including those for close relatives and charities. For example, nieces and nephews are subject to the tax so a bequest or gift to an adult sister or brother should be considered. Income taxes are important issues and must be dealt with from both: 1. A planning perspective, often with a focus on capital gains, and 2. A bookkeeping and reporting perspective, with fiduciaries responsible for tax filings. Estates have two levels of income tax returns on the last year of death, and they result in an income tax filing related to the time period from January 1 to date of death and a separate fiduciary income tax filing for the time period date of death forward.

Asset protection trusts are typically established by individuals in high-risk occupations (i.e., doctors and real estate developers) and very wealthy individuals that realize they are targets for creditors due to their net worth. Asset protection trusts can also be used in lieu of a prenuptial agreement. Asset protection trusts are generally irrevocable and have independent trustees.

Modern blended family situations are sometimes handled by trusts and sometimes by prenuptual and postnuptial agreements or a combination of both.

These persons are fiduciaries who are held to a standard under State law regarding their actions. Fiduciaries are encouraged to seek professional help with their duties. Often interdisciplinary help is recommended and includes a financial advisor / planner, attorney and accountant. The trust or estate will be responsible for reasonable professional fees related to professional advice and assistance for the fiduciary.

There are any number of circumstances under which a beneficiary is wise to say “no thanks” to a gift or bequest. There are many reasons why a decedent might want to still exercise post-mortem control over that gift once refused.

Trusts are legal agreements that govern the disposition of assets put into them. Trusts are administered by Trustees who are fiduciaries in a similar manner to executors or personal representatives of estates. Trusts are designed to distinguish between income and principal. Many trusts, especially older ones, provide for income to be distributed to one person at one time and principal to be distributed to that same person at a different time or to another person. For example, many trusts for a surviving spouse provide that all income must be paid to the spouse, but provide for payments of principal (also called the corpus, or main body of the trust assets) to the spouse only in limited circumstances, such as a medical emergency. At the surviving spouse’s death, the remaining principal may be paid to the decedent’s children, to charity, or to other beneficiaries. Income payments and principal distributions can be made in cash, or at the trustee’s discretion, by distributing securities as well as cash.

Never make assumptions, as the terms of every will and trust differ greatly. There is no such thing as a “standard” distribution provision.

Unless a fiduciary has financial experience, he or she should seek professional advice regarding the investment of trust assets. In addition to investing for good investment results, the fiduciary should invest within the applicable state’s prudent investor rule that governs the trust or estate and with careful consideration of the terms of the will or trust, which may modify the otherwise applicable state law rules. A skilled investment advisor can help the fiduciary decide how to invest, what assets to sell to produce cash for expenses, taxes or outright gifts of cash, and how to minimize income and capital gains taxes. Simply maintaining the investments that the decedent owned will not be a defense if an heir claims you did not invest wisely or violated the law governing trust investments. In all events, it is important to have a written investment policy statement stating what investment goals are being pursued.

During the period of administration, the fiduciary must provide an annual income tax statement (called a Schedule K-1) to each beneficiary who is taxable on any income earned by the trust. The fiduciary also must file an income tax return for the trust annually. Annual trust accountings should also be made by the fiduciary and given to the beneficiaries.

Trusts terminate when an event described in the document, such as the death of a beneficiary, or a specified date in the document, such as the date the beneficiary attains a stated age, occurs. The fiduciary is given a reasonable time period thereafter to make the actual distributions. Some states require a petition to be filed in court before the assets are distributed and the trust closed. When such a formal proceeding is not required, it is nevertheless good practice to require all beneficiaries to sign a document, prepared by an attorney, in which they approve of your actions as fiduciary and acknowledge receipt of assets due to them. This document protects the fiduciary from later claims by a beneficiary. These formalities are recommended even when the other heirs are relatives, as that alone is never an assurance that one of them will not have an issue and pursue a legal claim against you. Finally, a final income tax return must be filed and a reserve kept back for any due, but unpaid, taxes or trust expenses.

Real Property, meaning vacation homes or second homes, is governed by law of the state where held. Estate Administration and Probate in Maryland can be done together with ancillary administration in the other state.

Douglas L. Burgess works with families to handle out of state/ancillary administration issues in conjunction with local counsel.

Loved ones often go to a bank, credit union or life insurance company to get access to the deceased’s funds to pay the bills of the deceased and find out that they cannot without a tax identification number for the estate. This cannot be issued without opening an estate and preparing and filing the appropriate papers with the IRS.

Loved ones often go to a bank, credit union or life insurance company to get funds, to pay the bills of the deceased and find they cannot without letters of administration, letters testamentary or letter of representation.

What are letters of administration, letters of testamentary, letter of representation?

A document issued by the Register of Wills or Orphans Court that authorizes a personal representative/executor to administer an estate.   It cannot be issued without filing the will and estate administration or probate papers and involves an attorney preparing the paperwork.

The purpose of an advance directive / living wills is to allow you to express your preferences concerning medical treatment in a medical situation when you cannot communicate, including at the end of your life. By expressing such preferences in writing, you are ensuring that your preferences are made known. Physicians prefer these documents because they provide a writing from you as to your medical care and designate the person they should consult concerning unanswered medical questions. Rather than having to obtain a consensus answer from your family as to your treatment, the physician knows your preferences and knows who you want to provide decisions when you cannot do so. Also, providing such information and designating a health care proxy ensures clarity about whose direction should be followed in the event your family disagrees as to what medical treatment you would want.

If you do not have a power of attorney and become unable to manage your personal or business affairs because you are disabled, such as by stroke or dementia, it may become necessary for a court to appoint one or more people to act for you. People appointed in this manner are referred to as guardians. This involves a court hearing. Guardianship work is specialty work. Burgess Law refers these matters to colleagues.

POA Definition

A power of attorney gives one or more persons the power to act on your behalf as your agent.

Statutory Power Attorney

Maryland, like many states, has statutory powers of attorney. A statutory power of attorney or one substantially similar is given the full weight of the law.

Agent or Attorney-in-fact

The person named in a power of attorney to act on your behalf is commonly referred to as your “agent” or “attorney-in-fact.” With a valid power of attorney, your agent can take any action permitted in the document.

If you have real property in other states, you should consult with counsel. The simplest solution may be to execute an additional power of attorney on that state’s statutory power.

How to Sign as Agent or Power of Attorney for Someone Else. Assume John Doe appoints his spouse, Sally Doe, as his agent in a written power of attorney. Sally, as agent, must sign as follows: “John Doe, by Sally Doe, agent under POA” or “Sally Doe, agent/attorney-in-fact for John Doe.”

Deeds are specific to each state and the particular transaction. Please seek professional advice. For examples of some types, see Deeds.

Revocable Trusts or Living Trusts

A trust created during lifetime may be revocable, meaning it may be revoked or changed by the settlor (also known as the trust maker or grantor).

Irrevocable Trust

A trust may be irrevocable, which means it cannot be revoked or changed by the settlor. Irrevocable trusts are often used for asset protection and other purposes.

Either type of trust may be designed to accomplish the purposes of property management, assistance to the settlor in the event of physical or mental incapacity, and disposition of property or assets after the death of the settlor of the trust with the least involvement possible by the probate (orphan’s) court.

Trust Purposes include:

• Children
• Spouse
• Asset Preservation
• Spendthrift Prevention
• Wealth Accumulation
• Will Alternative
• Tax Planning

Wills

Wills are legal documents that provide written instructions for the distribution of a person’s property after death. A spouse and minor child may elect against a will to force certain distributions per the Maryland Code.

Beneficiary Designations and jointly owned property

Some assets, such as those covered by accounts or insurance policies with beneficiary designations and trusts, pass outside of a will.

Spousal Wills

These tend to be companion wills that mirror each other. Sometimes called “sweetheart wills”, these wills give everything to the surviving spouse. Families without wills ignore this critical planning technique at their own peril and when overlooked becomes problematic when there is no will and minor children.

Blended Family Spousal Wills

These also tend to mirror each other but are often paired with trusts under the will or contractual will agreements to assure conformity after death.

Specific Bequests

Specific items are designated for specific assets and/or specific beneficiaries. Careful drafting is needed to account for common issues such as pre-death gifting, loss of the item before death, or the beneficiary predeceasing the will maker. Will makers sometimes use hotchpot clauses to equalize gifts and bequests amongst children.

Residuary Bequest.

The residuary bequest (also called the rest and residue) includes the intended distribution of the balance of the estate after administration expenses and specific bequests. Careful instructions are needed to the will drafter related to the shares bequested for clarity on whether and how bequested shares are distributed if the beneficiary predeceases the will maker. The residuary bequest often carries the load as far as estate costs, so a careful understanding of the will maker’s intent is needed.

Guardian

You should name a guardian for your minor child(ren) in your will. Sophisticated drafters will add provisions for visitation by grandparents.

Trust for beneficiaries under age 25. In the unlikely event that a beneficiary is less than age 25 (such as when a parent predeceases and the share flows down the bloodline to the grandchild), then provisions can be put in a will for bequests being held in further trust pending the age provision requirement. This is generally called a trust under will.

Personal Representative or Executor

You may designate an executor (personal representative) of your estate in your will and eliminate their need for anything more than a nominal bond.