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Most people may have heard of the idea of planning an estate; however, there are many who likely do not realize the importance of doing so. If one does not have an estate plan in place, intended beneficiaries may not be able to receive assets from a person's estate in the case of one's unexpected death in Maryland or in any other state. Therefore, it is important to have a good idea of how to go about creating a plan for estate administration.

It will not be sufficient to use a generic template for an estate plan. The first step in planning an estate consists of evaluating one's current situation to determine what makes one's personal situation different from others. Some of the important considerations are whether one has minor children or elderly parents to take care of. Also, one should take into consideration any special needs of intended beneficiaries.

The next step in planning an estate is to calculate one's net worth. This will require listing all assets one owns and then subtracting that amount from debts owed. Then, after accounting for living expenses, one will have a better idea of what assets are available to pass to intended beneficiaries. In some cases, it may be a better financial move to gift assets during one's lifetime.

On the other hand, in order to ensure that a plan for estate administration is properly executed, one must utilize the correct legal documents and instruments. In Maryland, these will include a will, trust, power of attorney and various types of accounts. With estate-planning goals clear and an estate plan properly formed, one's estate administration goals are more likely to be achieved in the case of one's demise.

Source: nasdaq.com, "Estate Planning Guide 101: A Basic Guide To Establishing Your Estate", Joe Young, Oct. 15, 2014

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