When an individual is working to create a comprehensive estate plan, one of the steps they will take is to research the different types of trusts available to them. A trust is a contract between a third party and an estate. The third party, who is referred to as the trustee, will administer the trust. The trustee is legally obligated to the trust’s beneficiaries.
What are the different types of trusts available to me?
The various types of trusts available in Maryland each pertain to various financial and personal circumstances. When making a decision, it is important to ensure that you are choosing the best fit for you and your family. The following are the most common trusts available to individuals in Maryland:
- Irrevocable Trusts: Irrevocable trusts generally require grantors to revoke their rights to the ownership of the trust; meaning, without the beneficiary’s explicit permission, the trust cannot be terminated or changed.
Revocable Trusts: Revocable trusts can be modified or terminated by the grantor at any time. The person who created the trust must be of sound mind and have the ability to competently handle their own affairs without the permission of the beneficiary.
- Irrevocable Life Insurance Trust: Irrevocable life insurance trusts are for individuals who wish to remove their life insurance from their estates to ensure their beneficiaries do not have to face the tax consequences of their life insurance policies. Another benefit of these trusts is that they will ease the burden of estate costs.
- Testamentary Trust: Testamentary trusts are created as part of the grantor’s will and will only take effect after the grantor passes away.
- Special Needs Trust: Special needs trusts are created for loved ones with disabilities to ensure they receive the financial support they require, plus, certain benefits through the government.
If you have any further questions regarding the different types of trusts available in Maryland, do not hesitate to give our experienced estate planning attorney a call. We will walk you through each of your options to discover which will be the right fit for you and your family. Contact us today to schedule your initial consultation with our firm to learn more about our services and how we can assist you.
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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.