Many people create an estate plan during their life. This allows them to prepare for what will happen to their cherished assets in the event of their death. In creating an estate plan, many people set up a trust to manage these assets. The person who creates a trust is called a trustor, while the person receives the assets from the trust is known as the beneficiary. The person who handles the trust for the beneficiary is known as a trustee. When a trust is created, it is an arrangement that allows the trustee to hold and manage the assets on behalf of the beneficiary.
When creating a trust, it is important to know that there are several different types. This allows an individual to cater the trust towards the individual or entity that is meant to receive it. During the process of creating a trust, it can be very beneficial to have an experienced attorney at your side for assistance. This ensures that you are forming the right trust.
Revocable Trust
One of the two main types of trusts that are made is a revocable trust. This trust is able to be modified, changed, or terminated at any time. It is important to know that this can be done without the permission of the beneficiary, as long as the trustor is of sound mind to do so on their own.
Irrevocable Trust
The other main type of trust is an irrevocable trust. Different than a revocable trust, this type requires the trustor to nullify their rights to the trust when creating it. This means that once it is made, the individual no longer has any rights to the trust. This means they cannot change or terminate it at any time during their life.
Irrevocable Life Insurance Trust
When this type of trust is created by a trustor, it allows the individual to remove their life insurance from their estate. In doing so, it may allow a beneficiary to be free from any taxes that are placed on the trustor’s life insurance policy.
Testamentary Trust
When a testamentary trust is created, it is done as a part of a will. This only becomes effective after the individual passes away.
Special Needs Trust
A special needs trust can be created for an individual who has a loved one with a disability. This allows the trustor to ensure the individual receives any financial support they may need throughout their life when the trustor eventually passes away.
Contact our Firm
If you wish to create an estate plan and are seeking a legal representative to guide you through the process, contact JD Katz, Attorneys at Law today.
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.
