Estate planning comes in many forms, so it is imperative for those who are creating estate plans to understand the different types of directives. One type of directive that should be understood is the trust. In Maryland, individuals can choose to put parts of their estates into trusts for legal or tax reasons. By utilizing a trust, a person’s included assets will be held separately from the rest of the estate.
By creating a trust, one can bypass the probate process. Avoiding the probate process can benefit heirs in a number of ways, including by relieving some of the tax burden and by keeping the details of an estate out of public record. However, subtle differences in how a trust is set up can make a huge difference. Therefore, having someone with knowledge of how a trust functions is a real help when deciding which kind of trust best suits a particular situation.
Revocable trusts are those that allow the grantors to make changes to or even terminate the trusts as they see fit. Conversely, irrevocable trusts can never be changed for any reason, regardless of the wishes of the grantors. Intervivos trusts are applicable during the grantors’ lives, while testamentory trusts only become active upon grantors’ deaths.
Making estate planning decisions can be very confusing, so having a full understanding of the directives one is putting in place is important. An attorney who focuses his or her practice on estate planning can explain the different types of trusts. In addition, he or she can help a Maryland resident determine which type of trust will be most beneficial according to his or her individual situation.
Source: myrtlebeachonline.com, “Real Life | Examining the different forms of estate anatomy”, Gary Newman, March 21, 2015