Rockville Trusts Lawyer
When someone wants to transfer ownership of some or all of their property to another, one of their options for doing so is to create a trust. A trust involves a grantor, or the person giving their property, and a beneficiary, the person inheriting the property. Trusts are managed by trustees who ensure that the specific terms given by the grantor are honored.
Whether you are seeking to use a trust as a rightful beneficiary or want to establish a plan for distributing your assets, a Rockville trusts lawyer could help you achieve your goals. Speak to an experienced trust and estates lawyer to learn more.
Common Types of Trusts in Rockville
Trusts come in many different forms and are used for a variety of long-term planning purposes. Below are some of the most common trust instruments used today.
Some people establish trusts to gift their property to the public or a local community. Charitable trusts are often funded by wealthy individuals seeking to reduce substantial capital gains taxes on assets they own. These types of accounts, however, are not automatically tax-exempt. The IRS’s organizational test is used to determine which instruments qualify as a charitable organization and are exempt from taxes.
A charitable trust can be an excellent solution for certain needs, but there are many things to consider before creating one. Retaining a reliable trust lawyer in the community could help ensure that the intended recipients can enjoy any charitable gifts.
A living trust is funded during the guarantor’s life. Upon death, the assets are held in trust for the beneficiaries. Common assets like bank accounts, investment accounts, or homes can be used to fund the trust. Living trust assets are free from estate taxes and are not subject to probate.
Qualified Terminable Interest Property Trust
A qualified terminable interest property (QTIP) trust lets the grantor place assets in trust for their spouse. After death, the surviving spouse receives income from the trust as the assets appreciate. Upon the spouse’s death, the remaining assets are split among beneficiaries as specified by the grantor.
QTIP’s are especially useful when beneficiaries exist from a previous marriage, and the grantor passes away before their new spouse does. Estate taxes are not assessed upon the grantor’s death and are only calculated after their spouse has passed. A Rockville trust lawyer can explain local trust laws and guide those looking to establish a QTIP trust.
Testamentary trusts are created by a will document. This instrument gives the grantor more control over the distribution of their assets. There are two common types of testamentary trusts.
A discretionary testamentary trust gives a beneficiary the option to take all or part of their inheritance via the trust. With this instrument, the beneficiary has the power to appoint and remove trustees. They can also appoint themselves as trustees and manage their own inheritance.
A protective testamentary trust requires beneficiaries to take their inheritance via trust. In this type of trust, they have no appointment or removal powers with regards to trustees. This option is useful when a beneficiary is not in the position to correctly manage their inheritance due to age, disability, or other financially-related factors.
Modification and Termination of Trusts
The Maryland Trust Act (MTA) requires both the beneficiaries’ and trustee’s consent to any proposed modification or termination of some types of trust. However, a court approves a proposed change without consent if it determines that the interests of all beneficiaries will be adequately protected.
The MTA also allows a court to modify the administrative terms of a trust if the existing terms are considered impracticable or wasteful. Making changes to a trust may require the help of a local lawyer who understands the provisions applicable in Rockville.
Choose a Rockville Trusts Attorney You Can Trust
A Rockville trusts lawyer could help guide you through the legal process of creating or enforcing trust. Dedicated attorneys could explain all resources available to you in deciding the best plan for your situation. Reach out today to get started.