When it comes to estate planning in Maryland, creating a trust can be a strategic move to manage and protect your assets, both during your lifetime and after you pass away.
Trusts serve various purposes, and with several types of trusts available, understanding which option best suits your needs is helpful for effective estate planning.
Revocable living trusts
A revocable living trust is a popular choice for many, as it allows you to retain control over your assets while you are alive. You can change or revoke the trust at any time. This type of trust helps avoid probate, making the transfer of assets to your beneficiaries smoother and more private after your death.
Irrevocable trusts
Unlike revocable trusts, you cannot alter or revoke an irrevocable trust once you have established it. This permanence can offer significant advantages, such as protection from creditors and estate tax benefits, because the assets you transfer into the trust no longer belong to you; they belong to the trust.
Charitable trusts
Charitable trusts are an excellent way to support charitable organizations while receiving tax benefits. There are two main types: charitable lead trusts and charitable remainder trusts. The former allows you to provide a charity with income for a set period, with the remaining assets eventually going to your beneficiaries. The latter does the opposite, providing your beneficiaries with income first, before transferring the remaining assets to a charity.
Special needs trusts
Special needs trusts aim to benefit individuals with disabilities without jeopardizing their eligibility for government assistance programs. This trust type ensures that a loved one with special needs can receive financial support that does not disqualify them from benefits they may rely on.
As you consider your estate planning goals, exploring these trust options can help you make informed decisions about how best to benefit your loved ones and any causes close to your heart.
