Revocable and Irrevocable Trusts in Maryland
What Is a Trust?
A type of legal fiduciary agreement between three parties:
1. The creator of the trust, otherwise known as a grantor;
2. The individual responsible for managing the trust, or trustee;
3 …and the person/organization receiving funds from the trust, or beneficiary
By creating a trust, the grantor gives the trustee the authority to manage certain funds or assets on the beneficiary’s behalf. Trusts can be established to manage and distribute a variety of assets — from real estate holdings to personal property, investments, charitable donations, life insurance policies, and beyond.
Types of Trusts
Trusts can be established to fit a variety of purposes, from charitable giving to managing funds for the benefit of a minor or special needs individual, for example. Accordingly, there are many different types of trusts.
Aside from the trust’s primary purpose, the main distinguishing factor between different kinds of trusts is whether it is revocable or irrevocable: essentially, whether and how the terms of a trust can be changed after its creation. The terms of a revocable trust can be changed at any time after it is established without the consent of the beneficiary, while an irrevocable trust requires a beneficiary or court to approve changes to the terms (in most cases).
What’s the Difference Between a Will and a Trust?
A will outlines how your assets will be distributed after you die, while a trust allows a third party to hold and manage your assets for the benefit of the designated beneficiaries. The most common myth about trusts? That they’re overly expensive and reserved for the wealthy. In reality, there are many circumstances under which a trust may serve your needs best — like if you’re caring for family members with special needs or have young children.
At Z Family Law, we design trusts as unique as the parties involved. Whatever your needs entail, our team can help you execute and manage the following types of arrangements:
- Irrevocable trusts
- Revocable living trusts
- Marital trusts
- Bypass trusts
- Charitable lead trusts
- Charitable remainder trusts
- Testamentary trusts
- Life insurance trusts
- Special needs trusts
- Pet trusts
How Do Trusts Work?
To start, the person establishing a trust (the ‘grantor’), transfers formal ownership of assets to the trust, at which point the trustee will assume responsibility for managing the funds in accordance with the trust’s intent. Depending on the type of trust you’ve built, you’ll either be able to administer it yourself during your lifetime or you will appoint an independent trustee.
Why Do I Need a Trust?
Although they can accomplish many different estate planning goals, all trusts have one thing in common when properly designed and implemented: They give you the much-needed certainty that your assets will be applied exactly as you intended — both during your lifetime and beyond.
Curious to learn what trusts can do? Here are some different purposes this type of agreement may serve:
- Securing your legacy
- Providing for your minor children or special needs family member
- Protecting your privacy
- Minimizing certain tax considerations
- Protecting assets from creditors
- Avoiding probate or preventing challenges to your will
- Separating assets
- Keeping your wealth in the family
A Trusts Attorney Can Help You:
- Draft your trust document(s)
- Ensure the trust is secure, legally binding, and not vulnerable to any forthcoming challenge
- Facilitate the administration of the trust in the event of your death
- Modify or update your trust terms as your goals and assets evolve over time
Finding the Right Trusts Lawyer in Maryland
While there is no legal requirement that an attorney create a trust for you, finding an experienced, knowledgeable lawyer is key to ensuring your plans are properly captured and executed. After all, when it comes to securing your assets and wishes for the future, why leave anything up to chance?