Maryland Trusts: The Basics
A trust is an agreement that allows a third party, usually called a trustee, to manage assets on behalf of a beneficiary or beneficiaries. A trustee has fiduciary obligations and responsibilities outlined either by the agreement itself or by the laws of the state of the situs of the trust. A trust or several trusts can be useful tools in estate planning. You should consult with a Maryland trusts lawyer to help you create a trust to determine how the trust will fit into your overall estate plan, what type of trust you may need, and to help you decide who the best person or persons would be to fill the fiduciary roles that you are creating. If you have already established a trust, it is important to review your trust often, to determine whether the individuals you have named as trustee or trustees are still the best person or persons to serve, whether the trust accomplishes the purposes of its original creation, and whether it is properly funded. In addition, it is important to review your trust as part of your overall estate plan to confirm that all of the titling of your assets and beneficiary designations are coordinated with your trust.
Types of Trusts in Maryland
There are a lot of different kinds of trusts. You may decide to use multiple trusts in your estate plan to accomplish all of your goals. It is important to make sure that if you have a trust, you understand how it is administered and that you also have a trust that is the right fit for your estate planning needs. A trusts lawyer in Maryland can help answer any questions or concerns you may have about them.
Reasons People Create Trusts in Maryland
You may wish to create a trust for a multitude of reasons. The more common reasons include avoiding probate in multiple jurisdictions, providing for family members with special needs, or maximizing the use of your estate tax exemption. You may also create a trust to provide for your surviving spouse, to create the provisions for your minor children to inherit your assets, to protect your assets against creditors, and to generally help manage your family wealth to distribute it on to the next generation. People may create a trust to:
- Provide for their surviving spouse
- Provide for their minor children
- Provide for children or family members that may have special needs
- Ensure that their assets are protected against predators
- Take full advantage of someone’s estate tax exemption
- Avoid probate in multiple jurisdictions
- Provide for privacy
- Protect assets from the creditors of your beneficiaries
Trusts v. Bank Accounts
A trust and a bank account are different. A bank account is an asset, whereas a trust is an agreement usually created to assist in estate planning. A bank account may be owned by you individually, payable on death to a beneficiary, or owned jointly with a family member or friend. At your death, the titling of the bank account will dictate how it is distributed. A trust is an agreement that a grantor creates to provide for the governance of a certain set of assets. A trust agreement allows a fiduciary, known as the trustee, to manage assets on behalf of the designated beneficiaries. Often, trusts are funded with a number of different types of assets, one type of which may be bank accounts. It is important to review the titling of your bank accounts to ensure that they are coordinated with your overall estate plan. Since there can be many documents to go over, it is helpful to have a trusts lawyer in Maryland help you through the process.
Roles of Trustees and Beneficiaries
A trustee is a fiduciary that is nominated in a trust agreement to manage the assets of the trust on behalf of the beneficiaries of the trust in the manner described by the trust agreement. A trustee typically has the powers that are defined in the document as well as any additional specific duties or responsibilities that may be outlined by state law.
A trust beneficiary is the person designated to receive or inherit the assets of a trust agreement. Beneficiaries often include your spouse, children, grandchildren, other family members, charitable institutions, and educational institutions.
Hiring a Maryland Trusts Lawyer
It is important to find an attorney who has experience both creating and administering trusts. A relationship with an experienced and honest attorney can lead to continuity in your estate
plan, and provide for a trusted advisor not only for you, but for future generations.