Types of Trusts in Bethesda
Trusts in Bethesda and the State of Maryland are governed by the new Maryland Trust Act. The laws regarding the administration and the creation of trusts in Maryland are state specific. That is true for the administration and creation of a trust in many jurisdictions. While the trusts themselves may not look so dramatically different from other trusts, the laws and the interpretation of those laws with regard to the creation and administration of those trusts are unique to the State of Maryland. If you are looking to create a trust and are overwhelmed by the complexities and different types of trusts in Bethesda, a skilled trusts attorney can help you streamline the process.
Examples of Trusts
There are generally a few common types of trusts in Bethesda. One of those is the revocable living trust. A revocable living trust is created and funded during an individual’s lifetime. The purpose of the revocable living trust is to become a management vehicle of an individual’s assets. Assets that are prefunded into the trust are not included in probate. The revocable living trust is popular because it can be revoked, changed, or amended at any time that the original settlor maintains capacity and is alive.
Another common type of trust is a testamentary trust for minor children. When a married couple has minor children, they may wish to include provisions to provide for their children or even grandchildren so that another individual can manage those assets until the children become more responsible or of age.
Determining Which Works For You
There are many factors to consider when determining what type of trust or if any trust should be incorporated into an overall estate plan. Some common facts to consider are whether or not an individual is subject to Maryland Estate Tax or the Federal Estate Tax and the nature and composition of an individual’s assets. Of course, there are goals or wishes for the disposition of their assets after their death and also for their desires or their assets to be managed during their lifetime. Other purposes for different types of trusts in Bethesda address whether or not:
- An individual’s own assets are in more than one jurisdiction
- They have minor children or grandchildren they wish to provide for
- There is a concern regarding liquidity for their estate
There is a myriad of reasons why an individual may consider incorporating some type of trust into their comprehensive estate plan.
The authority for the trustee is given in the trust document. When a trustee is required to marshal assets, or change investments or assets, it is typically the trust document itself that provides the authority necessary for the trustee to act.
A common misunderstanding regarding an estate and trust attorney is that they are financial advisers. An estate and trust attorney in Bethesda plays many different roles such as advising a trustee on how to administer the trust pursuant to the provisions of the trust in Maryland law. They may also rely on an adviser or a financial adviser to advise them on how to effectively and properly invest the financial side of the trust.
Removing a Trustee
The trustee may resign from serving as trustee, but that depends on the nature and type of the trust, the terms of the trust, and the capacity in which the individual was appointed as trustee. For example, some trust documents allow for a trustee to resign and the document nominates a successor trustee. Other trusts documents may not allow a trustee to resign and do what might be required for the trustee to seek court supervision for just that limited purpose of appointing a new trustee.
The court may consider removing a trustee when it comes to the court’s attention that they have breached their fiduciary duty. The most common situation is when a beneficiary or a potential beneficiary of the trust requests that the court takes jurisdiction of the trust for the purpose of reviewing the trustee’s actions.
Working with an Attorney
A trust and estate attorney can assist the trustee with understanding their fiduciary obligations for administering the trust for which the trustee is named. The trust and estate attorney works closely with the trustee, especially for trusts in Bethesda that are intended to last a long time. The attorney gives advice about how to properly manage or administer the trusts.