If you are someone who is researching creating an estate plan that works best for you and your family, the first step you’ll take is most likely creating a will. That being said, there are various other documents that all work together to comprise one comprehensive, healthy estate plan that works to serve you and your family for years to come. One of the most important documents in the estate planning process are trusts. Trusts can protect your assets from various legal troubles, and they can preserve them for your beneficiaries. You should understand, however, if you or one of your beneficiaries has incurred debt and is filing for bankruptcy, assets in certain trusts may not be exempt from various collection activities on the part of creditors. Please continue reading and speak with our experienced Maryland estate planning attorney to learn more about trusts and how bankruptcy may affect those trusts. Here are some of the questions you may have:
What is the difference between revocable and irrevocable trusts?
If you are looking to create a trust, there is a very good chance that you have heard of the two primary types of trusts: revocable and irrevocable trusts. Essentially, a revocable trusts allows individuals to stay in control of the assets they place in that trust until their passing. Once they pass, those assets will be transferred over to the beneficiary named in the trust. On the other hand, if you are someone who creates an irrevocable trust, the beneficiaries you name will own those assets from that point forward. Fortunately, in certain cases, you can add a spendthrift provision to your irrevocable trust which can protect it from credit seizure, should the beneficiary you name ever have to file for bankruptcy.
What are the benefits of creating a trust in Maryland?
There are various perks to incorporating a trust into your estate plan. To start, many people create irrevocable trusts for the following reasons:
- Estate tax reduction
- Charitable estate planning
- They can protect and preserve your assets
That being said, there are many additional benefits to creating revocable trusts. Those benefits are as follows:
- They can help you financially plan for mental incapacitation
- They can help your family avoid the probate process upon your passing
- They can protect your privacy until you pass away
If you have any additional questions, please do not hesitate to speak with our experienced Maryland estate planning attorney today.
Contact our experienced Maryland firm
The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.