Providing Helpful Estate Planning Services to Clients Across the Baltimore Area
Estate plans are essential to preserving your legacy and looking after your heirs into the future. There are many different legal documents that can go into creating a comprehensive estate plan, with wills perhaps being the most well-known estate planning tool. But just because you have a last will and testament does not mean that your estate planning should begin and end there. Another legal document that you may consider adding to your estate plan is a type of trust. Depending on your estate planning needs, different types of trusts are available to families and individuals in the Baltimore, Maryland, area. One popular type of trust is the revocable living trust.
Trusts are useful estate planning tools that can supplement or potentially even replace a will. However, unlike wills, which are created and then only go into effect after the creator’s death, certain types of trusts can benefit the trust creator and their beneficiaries during the creator’s lifetime.
If you are considering adding a living trust to your estate plan, we strongly recommend working with a Maryland attorney with experience in establishing complex estate planning measures. Our legal team would be proud to assist you and your family members in creating, modifying, administering, and potentially revoking a living trust. In addition to helping you create and control your living trust, our legal staff has the experience to help you in other areas involving estate laws, including coming up with strategies to reduce estate taxes, draft wells, distribute property, and more.
How Do Trusts Work?
There are three main actors in the creation and management of trusts. First, there is the trust creator, sometimes referred to as the trust maker or the grantor. This is the individual who elects to create and fund a trust for the benefit of their beneficiaries. The beneficiaries are those who stand to recover assets and property from the trust. Finally, there is the trustee. It is the trustee’s responsibility as a fiduciary to manage the trust to the utmost of their abilities in accordance with both state law and the language as laid out in the trust legal document.
Do Trusts Avoid Probate?
Certain types of trusts can avoid the probate process.
Probate court begins at the time of death of the estate holder. At this point, the estate executor must settle debts, identify designated beneficiaries, distribute property to those beneficiaries, and eventually close the estate. The probate process can be long, complicated, fraught with emotional turmoil, and costly. If it could be avoided, it would be for the better.
A revocable living trust can help avoid the complex probate process. Assets within a living trust typically bypass probate, ensuring a smoother transfer of assets and property to heirs and beneficiaries. This can be especially beneficial during difficult times of grieving and for those with complicated estates.
What is the Role of the Trustee?
The trustee is the individual or entity granted the authority to control the money and assets within the trust for the benefit of the beneficiaries. Trustees are responsible for distributing assets according to beneficiary designations. Failure to uphold the instructions of the legal document the trust was created with could result in a breach of fiduciary duties, resulting in the removal of the trustee and a successor trustee taking over.
Selecting a reliable trustee to manage and administer the living trust for you and your loved ones is an important step of the estate planning process. For many, close family members or friends are those initially thought of as the ones who manage the trust, as they typically seem to have the best interests of the trust creator and the beneficiaries at heart. However, it is also essential to prioritize trustworthiness, competence, smart financial decision-making, and a commitment to the understanding of fiduciary duties when making the selection of a trustee. For some, an experienced estate planning lawyer may be the right choice to act as a trustee for an established revocable living trust.
If you need legal assistance selecting the right person or entity to manage your trust, please get in touch with our law firm for legal guidance.
Can the Trust’s Creator Act as the Trustee?
Yes. For a living trust in Maryland, it is possible for the individual who created the trust to act as their own trustee. However, it is essential that you name a successor trustee to manage the trust administration if you ever become unable to do so due to incapacitation or death.
What Are Living Trusts?
A revocable living trust gets its name for two main reasons. It is called ‘revocable’ because it can be revoked by the trust creator at any time during the life of its creator. And it is called ‘living’ because it is established and managed while the creator is still alive.
Assets, including real estate and bank accounts, can be transferred into the trust to be distributed to designated beneficiaries. The trustee, who could be the trust creator, is responsible for trust administration and management.
With a revocable living trust, the trust creator maintains control over the assets within the trust during their lifetime and can make changes or even revoke the trust if they so desire. When the trust creator eventually passes away, the remaining trust assets will be managed and distributed to beneficiaries according to the legal document, sometimes performed by a successor trustee.
To create a revocable living trust, we encourage clients to work with a Maryland trust attorney for legal assistance.
What is a Testamentary Trust?
Whereas a revocable living trust is meant to benefit the trust maker and their beneficiaries during the trust maker’s lifetime, a testamentary trust only activates upon death.
Testamentary trusts are usually written into a last will and testament. Like wills, they are not effective until the grantor’s death.
Living trusts, on the other hand, go into effect while the grantor is still alive.
What Are the Benefits of Creating a Living Trust in Baltimore, MD?
There are several benefits to creating and managing a revocable living trust in Maryland.
Such benefits include the following:
- Avoid probate: The probate process can be complicated and costly. Revocable living trusts can help you avoid probate. Assets placed within the living trust do not have to go through the probate process, allowing a more seamless transfer of assets and property from the trust to a designated beneficiary.
- Flexibility: Unlike certain other trusts, which are more or less set in stone once they are established, a revocable living trust may be modified and revoked at any time that the trust creator wishes. This provides an extra level of control and adaptability to changing circumstances in life. The control and flexibility that the trust creator has extends to the assets placed within the trust, allowing for adjustments without the need for court interventions or civil litigation.
- Peace of mind: Revocable living trusts are known for providing a certain level of Peace of Mind to individuals, especially young parents with minor children. By establishing a living trust, parents can designate successor trustees to manage the trust and distribute property to their children and any other young heir during the parent’s lifetime and after death. This allows parents to breathe a little easier, knowing that their children and other dependents are going to be well taken care of.
What Are the Differences Between a Revocable Living Trust and a Will?
In many ways, wills and living trusts operate fairly similarly. Both legal documents are essential estate planning tools that allow you to name beneficiaries to recover assets in the event of your death. The main difference is that, whereas a will must wait until death for property to be distributed throughout the probate process, a living trust allows assets to be distributed during the trust creator’s lifetime. Also, property can pass from the estate to beneficiaries without going through probate.
Finally, probate court is a public process. There exists a chance of disagreements and disputes over the assets after your death. By avoiding probate, you potentially avoid public family infighting.
For many, it is essential to have both a will and trust. To learn more about the differences and similarities between living trusts and wills, don’t hesitate to get in touch with our law office to schedule your free case evaluation today.
What is the Difference Between a Revocable and an Irrevocable Trust?
What is the difference between an irrevocable living trust and a revocable living trust? Both are living trusts, so they must be fairly similar, right? While there are many similarities, there are also many distinct differences and different pros and cons to each option.
A revocable living trust can be modified or terminated (revoked) by the trust creator at any time during their life. This grants them extra control over the management and distribution of assets within the trust. An irrevocable living trust cannot be so easily modified or revoked. Once it has been established, the irrevocable living trust operates for the benefit of the beneficiaries, not the trust creator.
While irrevocable living trusts limit the amount of control that trust creators can have over their own estate plans, there are benefits to irrevocable living trusts. Unlike a revocable living trust, where the assets of the trust are still seen as the property of the trust creator, assets within an irrevocable trust are seen as separate property. This grants a certain level of asset protection, eligibility for government benefits like Medicaid, and potential tax advantages to the beneficiaries of irrevocable living trusts.
To better understand the differences and similarities between revocable and irrevocable trusts, please contact our law offices to schedule your free, no-obligation case evaluation today.
Do You Need a Living Trust if You Already Have a Will?
Both wills and trusts serve many of the same benefits, particularly the distribution of assets to beneficiaries upon the event of the estate holder’s death. However, trusts have additional benefits that wills do not. Trusts avoid probate and allow greater flexibility. Trusts can also afford certain tax advantages.
Whether you require both a will and a trust will depend on your life circumstances. To learn more, please contact our legal team for assistance.
Do You Need Help with Trust and Estate Administration?
Trust administration is the process of managing and distributing a trust’s assets according to the rules of the state and the terms of the trust agreement. It falls on the shoulders of the trustees. However, it is important that trustees understand they needn’t go through this complicated process on their own. Trust administration attorneys are ready and able to lend legal guidance to trustees in the performance of their duties.
Our legal team can provide the following guidance:
- Advice to trustees and successor trustees on their legal obligations as fiduciaries
- Distribution of assets to designated beneficiaries
- Filing tax returns, including estate and income taxes, on behalf of the trust
- Inventorying trust assets
- Managing trust assets for the duration of the trust
- The identification of suitable assets to fund a trust
- And more
What Are Common Misunderstandings and Mistakes Involving Revocable Trusts?
While trusts are often considered an essential estate planning measure for many in Maryland, that does not mean they are easy to set up or simple to manage. Many mistakes can and have been made in living trust planning.
Common mistakes include:
- Attempting to do it all yourself without legal counsel
- Needless procrastination and delays
- Neglecting to update or review an estate plan
- Overlooking funding procedures
- The belief that estate planning is a one-size-fits-all legal matter
What is the Benefit of Working with an Estate Planning Attorney?
We recommend that everyone with a suitable estate consider adding different types of trusts to their estate plans. However, we do not recommend that you do so on your own. Our law firm strongly encourages clients to retain professional legal representation from experienced trusts lawyers when establishing, managing, or revoking a trust.
A trusts attorney from our law firm can provide the following legal services:
- Advising trustees and successor trustees of their fiduciary responsibilities
- Drafting a trust, as well as other estate planning tools, that fulfill your estate planning needs for both you, your loved ones, and your heirs
- Explain the marital deduction rule and how it may apply to you and your situation
- Explanations of the various types of trusts available in Baltimore, MD, including revocable and irrevocable living trusts, special needs trusts, charitable trusts, and more
- Helping to plan for contingencies and secondary options that you might not have come up with on your own
- Provide legal options that minimize the potential exposure to estate taxes while also coming up with strategies to protect your assets from creditors and claims
- Answering difficult trust administration questions and providing legal guidance throughout the trust administration process
What Related Practice Areas Can Our Law Firm Lend Assistance in the Estate Planning Process?
In addition to creating living trusts, our legal team believes in forming a lasting relationship with our clients so that we can help them with other legal issues throughout their lives.
Our law firm represents clients in the following practice areas:
- Criminal law
- Estate planning measures, including the drafting of wills, designation of guardianship, creation of powers of attorney documents, and more
- DUI cases
- Elder law, Medicaid planning, and long-term care planning
- Personal injury cases
Are Revocable Living Trusts Only for the Wealthy?
No. A living trust may be beneficial to many different types of individuals regardless of their income levels or backgrounds. Living trusts offer several advantages, such as avoiding probate, reducing tax vulnerabilities, and more, which may benefit you regardless of your level of wealth.
Schedule a Free Consultation with Our Experienced Baltimore Living Trust Attorneys Today
Our law firm offers free consultations to prospective new clients interested in retaining our legal services. To learn more about our estate planning services and how we can serve your behalf both in and out of court, please contact our Baltimore-based law firm to schedule your free initial consultation today. When you hire a trust lawyer at our law office, you can rest assured that you are putting your estate in trustworthy hands. Always looking after the best interests of our clients, we are proud to provide zealous and compassionate legal representation for all of your legal matters.
Our law offices are located throughout the Baltimore area, including Bel Air, Essex, Glen Burnie, and Columbia, MD.
Schedule your free case review today by calling us at 443-888-2062.