What is a Trust?
A trust allows you to set aside property for your loved ones that will bypass probate, as well as bypass certain taxation, if your estate is large. A trust can also be used to ensure that the beneficiary is not harmed economically by being bequeathed a sum of money that would, for example, cause the loss of public benefits such as Supplemental Security Income Benefits (SSI) or Medicaid. Trusts are used by all socioeconomic classes of people. You and your loved ones do not need to be rich to benefit from a trust. There are many types of trusts to suit you and your family’s circumstances. You may benefit from a simple revocable trust or an estate plan that includes others, such as a generation- skipping trust. The estate planning lawyers at Frame & Frame have been serving our community for over 65 years. Our estate planning attorneys can help you evaluate which trusts may be most beneficial for your unique situation. Contact our Maryland trust attorneys to schedule a private consultation.
What Type of Trust Do You Need?
There are many types of estate planning trusts. Your family’s unique situation and goals will help determine which type of trust will best serve your needs. When you meet with the experienced Maryland trust attorneys at Frame & Frame, we will review all the options with you to help you attain financial stability and ensure that your loved ones are properly cared for, in any eventuality. Some of the common trusts that we review are:
- Revocable Trust—A revocable trust is the most common type of trust for avoiding probate., A revocable trust, sometimes called a living trust, can be modified during your lifetime. A revocable trust will help you leave your property to your loved ones in the manner you best see fit, in a private manner outside the probate process. You can even leave property to be held in trust for several generations.
- Irrevocable Trust— Conversely, an irrevocable trust cannot be modified. An irrevocable trust can be used by a grantor with a taxable estate. Assets in an irrevocable trust are no longer the grantor’s property, an estate tax reduction strategy, although the grantor still has access to the funds in an irrevocable trust.
- Special Needs Trust—If you leave a child or other relative with special needs a large sum of money (even as little as $10,000 or so), you could ruin that person’s ability to collect public benefits this person depends upon. A special needs trust allows your loved one to continue receiving these benefits, while at the same time, have access to the financial resources that you leave to him or her.
- Medicaid or Long-Term Care Planning Trust—This type of trust is for those concerned about paying for senior living, assisted living or nursing home care. With the average cost of long term care rising significantly, a person can deplete their lifelong savings or the value of a family home by paying for such care. A Medicaid trust or a long-term care trust allows you to put your assets in a trust, potentially help you qualify for Medicaid or long-term care benefits, and ensure that your legacy is passed on to your children.
- Charitable Trust—If your estate is subject to estate taxes, there are many ways to reduce the tax burden. One of these is to set up a charitable trust, which can also help avoid the lifetime gift tax and can benefit your favorite charities, while minimizing your taxable estate.
- Generation-skipping Trust—Another way to reduce estate taxes is to set up a generation-skipping trust. Instead of leaving your property to your children, a generation-skipping trust passes down some or all of your assets property to your grandchildren, keeping the wealth in the family.
- Spendthrift Trust—Assets in a spendthrift trust are protected from creditors while being managed by a trustee working in the beneficiary’s best interests. This type of trust may be useful for a beneficiary who is unable to manage money properly since the trustee is in control of all of the assets.
- Marital Trust—When a spouse dies, co-owned assets can be moved into a marital trust. The income created by these assets is then transferred to the surviving spouse. When the surviving spouse dies, the property is then distributed to the couple’s heirs.
There are many different types of trusts that offer methods of maximizing what you leave behind for your loved ones. Our Maryland trust attorneys can help you establish the best trust for each situation.
A trust is a binding agreement with fiduciary responsibilities and duties. The trustee must act in the best interest of the beneficiary of the trust. As such, it may be required of the trustee to buy and sell stock and real property, or make other financial decisions. A trustee has important legal and fiduciary responsibilities. Learn more about how to choose a trustee wisely. Our Maryland trust attorneys can help you safeguard yourself and your family by establishing a responsible, dedicated and knowledgeable trustee. We can also provide trust administration and fiduciary services.