Trusts

Serving Frederick & Montgomery Counties, and the surrounding Maryland communities

Trusts

There are numerous types of trusts, but the one about which clients most commonly inquire is the revocable trust. Often referred to also as a living trust or inter vivos trust, the revocable trust is used primarily to avoid probate. The assets owned in a revocable trust upon the death of its creator are not considered to be owned by that person for purposes of probate law. As a result, many of the legal requirements that must be satisfied to probate an estate are not applicable to revocable trusts. This usually results in a savings of time and money. Revocable trusts are effective tools for other purposes, such as enhanced privacy, asset management in the event of incapacity, and protection against Will contests. Irrevocable life insurance trusts are an effective means of excluding the face value of life insurance policies from a person's estate tax base. Because they are rather complex, they are not typically used unless a policy with a significant death benefit is involved. Persons who own insurance policies and likely have estate tax exposure, or those who are purchasing insurance to provide liquidity to pay death taxes, are good candidates for an irrevocable insurance trust.

Trusts are being used increasingly to provide protection for adult children whose marriages are at risk or in the process of dissolving, who are struggling with addictions or substance abuse, or who cannot manage their finances effectively. Assets can be insulated from such threats until the child’s circumstances have improved, ensuring that your legacy is not wasted or diverted to a former spouse.

Trusts can be created for persons with disabilities who are, or might be, eligible for certain governmental assistance programs (e.g., Medicaid). Direct ownership of assets by such persons causes the receipt of these benefits to cease immediately. The solution is to create a Special Needs Trust which provides benefits for the disabled person in a way that does not jeopardize eligibility for benefits. Depending upon the circumstances, the Special Needs Trust might be a testamentary trust created upon the death of the disabled person's parents, or might need to be established while the parents are living.

Grandparents and other relatives often want to provide for the education of loved ones. There are several ways this can be accomplished. Where only post-secondary education is concerned, 529 Plans could be an appropriate solution. If assistance with the cost of elementary and secondary education in a private school is desired or anticipated, or where the trust might be intended to meet other needs in addition to education, other trust options may be advisable. We can help you sort through the various options to determine which best suits your overall objectives.

Maryland implemented legislation relatively recently that permit pet lovers to create a trust for the ongoing care of their pets when they are no longer able to care for them personally. Trusts for pets involve unique planning considerations that differ from those created for children and other family members.

There are many other types of trusts that can be used for specific purposes, whether it be transferring title to a vacation home to children in a more tax-efficient manner, or to avoid wasting the estate tax exemption of a person who owns less assets than his or her spouse, without the wealthier spouse's relinquishment of control of the assets.

Practice Areas

Estate Planning & Probate Services

Trusts

There are numerous types of trusts, but the one about which clients most commonly inquire is the revocable trust.

Planning For Incapacity

Planning addresses a broad range of scenarios that can impact a person's care and his or her assets both during life and after death.

Asset Protection

The desire to protect assets often extends beyond concerns related to taxes. At times, the objective is to protect assets for one's own benefit.

Tax Planning

Our tax planning services focus primarily on the effective use of our clients' estate and gift tax exemptions, and strategies to transfer assets.

Charitable Planning

Charitable giving in the context of estate and gift tax planning takes many forms, and as with most tax planning, ranges from simple, outright gifts and bequests...

Entity Creation

Partnerships...We also assist in creating Corporations and Limited Liability Companies for traditional income tax and liability protection purposes.

Estate Planning And Probate Services

Personalized Estate Planning and Probate Services tailored to your family's specific circumstances and needs, your assets and your goals.

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