Trusts
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Trust Attorney serving Bethesda, Maryland, and Montgomery County
When an individual creates a comprehensive estate plan, they may want to ensure that there are trusts set up for their beneficiaries. There are a variety of reasons that individuals choose to create a trust but they all lead back to allowing the beneficiaries to maximize their inheritance and allow the probate process to move more efficiently. If you are thinking about creating a trust as part of your estate plan in Maryland, it is important to consult with an estate planning attorney that can guide you through each step. The legal team at JDKatz has what it takes to help you develop a trust and protect your assets. Contact our firm today.
What is a Will vs. a Living Trust?
What is a trust?
Trusts are an important part of the estate planning process. A trust simply creates a contract between the estate and a third party that is in charge of the administration of the trust, known as the trustee. The trustee of a trust has a fiduciary duty to the beneficiaries of the trust. It can be difficult for a trustee to understand their obligations, especially when facing vocal demands from beneficiaries. Our estate lawyers advise trustees, as to how to administer the estate or the trust and protect themselves from claims of breach of fiduciary duty. In the state of Maryland, if the trustee is a Maryland resident, they are subject to local taxes.
Irrevocable & Revocable Trusts
An irrevocable trust essentially requires the grantor to revoke all of his or her rights to the ownership of the trust. As a result, the trust cannot be terminated or changed in any way without permission from the beneficiary because the person who created it effectively gives up all of their rights to the assets upon creation. Unlike an irrevocable trust, a revocable trust can be modified or terminated by the grantor at any time, as long as the person who created it is of sound mind to handle their own affairs, without permission from the beneficiary.
Other Types of Trusts
When thinking about creating a trust, it is important to consider your options to determine which is best for your particular situation and the situation of your beneficiaries. A few of the most common trusts that people choose to draft in the state of Maryland include the following:
Irrevocable Life Insurance Trust
This allows an individual to remove their life insurance from their estate to help free beneficiaries of the tax consequences of your life insurance policy, as well as pay estate costs.
Testamentary Trust
A testamentary trust is one that is created as part of the grantor’s will and will only become effective after the grantor passes away.
Special Needs Trust
If a loved one has a disability, this trust can ensure they receive the financial support that is needed. However, in addition to receiving support through the trust, the beneficiary may be able to receive benefits through the government.