Maryland Trusts: Important Terms
Before someone delves into the process of creating a trust in Maryland, they should brush up on some important terms they will likely need to become familiar with. To learn about each of these terms and discuss your personal in more depth, call and schedule a consultation with an experienced Maryland trusts lawyer.
A trust is a document that allows for a third person to manage assets on behalf of the named beneficiaries pursuant to the provisions provided in the document. A trust is a common tool used in DC estate planning, and can be a beneficial part of a comprehensive estate plan.
The trustee is the individual selected by the settlor to manage the trust assets pursuant to the terms of the trust. The trustee has fiduciary obligations to manage those assets and to make distribution pursuant to the terms of the trust to the beneficiary as prescribed by the trust itself.
In Washington, DC beneficiary or the beneficiaries are the person or entities inheriting the trust assets. Beneficiaries named frequently include spouse, children, grandchildren, other loved ones, friends, charitable or educational institutions.
Probate is the term used to describe the court process of administering a decedent’s Last Will and Testament. It often involves filing the original last will and testament with the property court, and having the personal representative qualified to marshal the assets of the estate, pay the legally enforceable debts, and make distribution pursuant to the terms of the last will and testament or the laws of intestacy in the jurisdiction where probate was initiated. Assets that are in titled in the name of a trust do not typically pass through probate, and are not governed by the provisions of a decedent’s last will and testament.
Trust assets are assets that have been re-titled into the name of the trust. Trusts are not automatically funded by their mere creation. It is often necessary to re-title assets into the name of the trust for the trust provisions to govern how those assets will be managed or distributed. The method for re-titling assets depends upon the nature of the asset. For example, a new deed must be prepared to transfer real estate into a trust.
Estate planning is a process for planning for incapacity or potential incapacity and the disposition of your assets at your death. Estate planning can include the use of last wills and testaments, durable power of attorney, healthcare power of attorney, trusts and other estate planning techniques to accomplish your goals or disposition of your assets.
An estate tax is a tax on the right to distribute property at your death. Federal estate tax returns are currently due nine month from the date of death. The due date for state estate tax returns vary depending on the state of residence of the decedent, but are often also due nine months from the date of death. Estate taxes are often confused with inheritance taxes or estate income taxes. Estate taxes are just one of three taxing systems that may be applicable to your estate. You should consult with a Maryland trusts attorney to determine whether your estate what exposure your assets may have to both your state and federal estate tax.
Fiduciary describes the notion that an individual has been trusted with assets that he or she is managing for the benefit of another. A fiduciary has several obligations that may be proscribed by a last will and testament, trust instrument or state laws.