For families that have accrued substantial wealth, there are a wider variety of options and scenarios that should be considered. Some of the most important concerns are:
Protecting Your Privacy
Do you want a stranger to have access to you plan, to know who was included and who was not, and how much each person received? Families with substantial wealth may not want their affairs to be public record.
A Will is filed with the court and all assets are appraised and report- ed to the court. All income and expenses are reported and a final distribution must be approved by the court. A Trust is completely private, is not recorded or filed with the Court, thereby protecting families and their heirs from people who may the opportunity to take advantage of children who have inherited large sums of money.
If there are any assets that need to be distributed pursuant to a Will, then the Will must be probated in the court. This is the legal process of transferring assets to heirs. This is a public process that typically takes 6 months to 1 year.
If there are real properties or businesses that must be sold, the probate process can get complicated and can take many years. There are also expenses involved with the probate process, such as probate fees, attorneys’ fees, and appraisal fees.
All assets in an estate are subject to creditors’ claims and claims by the State of Maryland to recover nursing home or Medical Assistance benefits paid during the decedent’s lifetime. Assets held in trust do not go through probate.
There is seamless management and assets are not subject to creditors’ claims as with a Will. The entire probate process can be avoided by having a trust in place.
Protection of your Family’s Assets
One the of biggest benefits of having a trust is that the funds passed on in trust to beneficiaries are protected from future divorce, bankruptcy, creditors, predators, and judgments. If a child gets married, as long as the funds are retained in the trust, a spouse cannot file for divorce and reach anything in the trust. Same with judgments and creditors, they could not get to the funds as long as the funds are retained in this trust.
Control After Death
Most people do not want their children receiving large sums of money by way of an inheritance. Families can set forth general or very specific instructions for the distribution of the trust monies.
Parents can decide at what age the children will get distributions, how much, for what purposes, and when they can have some or all control over their own funds. Some people want their children to get percentages or certain amounts of money at certain intervals (e.g. 10% per year for 10 years) or ages (e.g. 25% at age 30, 25% at age 35, and the balance at age 45). The trustee must follow the instructions as set forth in the trust agreement or be liable to the trust.
Protecting Disabled Children or Children with Substance Abuse Problems
Often a family is looking to provide for a disabled child but don’t want them to lose their government benefits, such as Medical Assistance, or they may want to protect a child who suffers from substance abuse from themselves.
We use special needs trust and family trusts with specific conditions and instructions to deal with these situations. We can make sure that a child has a place to live, with electric and food and prevent the child from accessing any monies directly for himself or herself.
This is a huge concern for families dealing with substance abuse and a trust can ease the family’s worries by ensuring adequate protection for the addicted child. In the case of a disabled child, we can protect the funds for their incidental needs and expenses while maintaining their eligibility for important government benefits.
Subsequent Marriages and Blended Families
Trust are often recommended for people on second or subsequent marriages who want to ensure that their biological children receive their fair portion of the assets, rather than risk the chance that their new spouse will change the estate plan to leave all of the assets to their own children and disinherit the deceased spouse’s children. Unfortunately, this situation happens all too commonly and was not what the deceased spouse intended to happen.
Contact an Experienced Maryland Asset Protection Attorney About Your Situation
Meeting with a Maryland asset protection attorney can help you to plan for the future. Contact Frame & Frame today to learn more about how we can help with your situation.