How Long Can a Trust Fund be Maintained in Maryland?

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If you are considering leaving a trust to a loved one, it’s crucial to understand how the trust works to ensure that they are adequately cared for after you are gone. A trust is a fiduciary arrangement that allows a third party to hold assets on behalf of beneficiaries- a minor child, a surviving spouse, a family member with special needs, a pet, or a charity. There are numerous benefits to establishing a trust fund. However, many wonder how long a trust fund can be maintained after someone dies. Please continue reading to learn how long a trust can remain open after death in Maryland and how a trusted Montgomery County Trust Attorney can help develop an estate plan that protects your assets. 

Is there a Limit to How Long a Trust Fund Can be Maintained in Maryland?

Generally, if you create a living trust, it will remain in effect throughout your lifetime. This is because a revocable living trust can be amended or revoked during your life if your needs and those of your family change. However, it’s important to note that the revocable trust instantly becomes irrevocable once you pass away. This means that the terms cannot be changed.

Under federal law, a trust can remain open for up to 21 years after the death of the person who created it. However, under certain circumstances, it can extend beyond this timeframe. For instance, a special needs trust can remain in effect throughout the person’s lifetime. This type of trust can stay open for as long as the beneficiary lives. Therefore, if the beneficiary is older, it’s advisable to name a successor trustee to continue to provide fiscal oversight to the trust. Nevertheless, trusts often stay option for a substantial period, especially when the beneficiaries are minors.

What Happens When a Trust Ends?

When the assets that make up the trust property are exhausted, meaning the assets held in the trust have been distributed to the beneficiaries, the trust fund will dissipate. The property will be distributed based on the decedent’s instructions. It’s important to note that a trust can end based on what the grantor dictates in the trust. If they specified an “end date” or condition for the trust, it would end once that date is reached or that condition is fulfilled. If no instructions are left behind, the trustee and the beneficiary will need to determine a fair distribution of the property.

If you want to establish a trust, please don’t hesitate to contact the legal team at JD Katz. Our seasoned Montgomery County trust attorneys are prepared to help you craft an estate plan that safeguards your assets and legacy.