Trust Attorney in Bethesda, Maryland
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 JD Katz has what it takes to help you develop a trust and protect your assets. Contact our firm today.
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 and 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.
It is important to consult with an experienced estate planning attorney who can assess your particular situation and your wishes for the future to determine which type of trust may be best for you. The options mentioned above are just a few of many types of trusts that an individual may want to consider. Some of the other options may include charitable trusts, generation-skipping trusts, marital trusts, among others.
Contact a Maryland Trusts Attorney
Planning one’s estate is no easy task. However, with the guidance of an experienced estate planning attorney, the process does not have to be complicated. The legal team at JD Katz has years of experience helping clients navigate each step of the estate planning process, including their creation of trusts. If you are thinking about creating a trust for your loved ones, contact our firm today.