How to Create a Living Trust in Maryland

A living trust is a legal arrangement where an individual, known as the grantor, establishes a revocable trust during their lifetime to manage and distribute their assets. This trust allows the grantor to maintain control over their estate, potentially minimizing probate proceedings. Living trusts are common because they provide a flexible means of asset management and distribution.

Still, the process of creating a living trust in Maryland can be difficult without legal support. There are several considerations that must be made when establishing such a trust. Fortunately, after reviewing the specifics of your case, the team at our firm can help you set up a living trust that complies with all applicable rules and regulations.

Seek help from our Maryland estate and trusts attorneys at Rice, Murtha & Psoras by dialing (410) 694-7291.

Creating a Living Trust in Maryland

Creating a living trust in Maryland involves several crucial steps. For instance, failure to take any of the following actions may result in the production of an ineffective estate plan:

Understanding Living Trusts in Maryland

When initiating the process of creating a living trust, it is important to comprehend the nature and purpose of a living trust. As previously discussed, a living trust, sometimes referred to as a “revocable” trust or “inter vivos” trust, is established during one’s lifetime and allows the individual, known as the grantor, to maintain control over their assets. Unlike a will, a living trust enables seamless asset management and distribution while avoiding the probate process.

Identifying Assets for the Living Trust

The next step in creating a living trust involves identifying and listing the assets to be included in the trust. This encompasses real estate, financial accounts, and personal property. By providing a comprehensive overview of assets, individuals ensure that the trust can effectively manage and distribute their estate as intended. Additionally, meticulous documentation of these assets is crucial for the success and legality of the living trust.

Selecting a Trustee

Choosing a trustee is a critical decision in the establishment of a living trust. The trustee, responsible for managing and distributing the trust assets according to the grantor’s wishes, plays a pivotal role. It is essential to carefully consider a trusted individual or institution capable of fulfilling these responsibilities competently. In Maryland, adherence to state laws and regulations governing trusteeship is imperative to ensure the validity and effectiveness of the living trust.

Drafting the Living Trust Document

Once the assets and trustee are determined, the grantor should draft the living trust document. This legally binding document outlines the terms, conditions, and instructions for the trust. Assistance from our Maryland estate and trusts lawyers can be highly beneficial during this phase to ensure the document aligns with state laws and accurately reflects the grantor’s intentions.

Notarizing and Funding the Living Trust

After the living trust document is drafted, the grantor must sign it in the presence of a notary public to authenticate the document. Subsequently, the assets identified earlier must be retitled into the name of the trust. This process, known as funding the trust, is vital for the trust to effectively manage and distribute assets. Proper documentation of these transactions is essential, reinforcing the legal standing of the living trust in Maryland.

Regular Review and Updates

Finally, the grantor should recognize the importance of periodic review and updates to the living trust. Life circumstances, such as marriages, births, or significant asset acquisitions, may necessitate modifications to the trust document. Regular consultations with a knowledgeable estate and trusts attorney in Maryland can ensure the living trust remains aligned with the grantor’s evolving intentions and the state’s legal requirements.

Reasons to Create a Living Trust in Maryland

A living trust offers several potential advantages when compared with other types of trusts. For example, the following are all reasons why you may want to create a living trust:

Avoid or Minimize Probate

Creating a living trust offers the distinct advantage of minimizing or entirely avoiding the probate process for assets transferred into the trust during the grantor’s lifetime. By retitling assets into the trust, individuals can potentially save both time and money, streamlining the administration of their affairs after death. While the actual time and cost savings can vary based on the nature and extent of the assets, the avoidance of probate remains a key motivation for establishing a revocable trust in Maryland.

Avoid or Minimize Ancillary Probate

For individuals owning real estate in multiple states, the establishment of a revocable trust becomes particularly beneficial. It provides a means to sidestep ancillary probate, a separate probate proceeding required for out-of-state properties. By consolidating these properties within the trust, grantors can simplify the distribution process and potentially spare their heirs the complexities associated with ancillary probate, reinforcing the appeal of a living trust in managing multi-state real estate holdings.

Manage Assets During Illness

Another compelling reason to create a revocable trust is to facilitate the management of assets during times of poor health. This is especially relevant for individuals who may require someone else to oversee their financial matters. While a general financial power of attorney can serve a similar purpose, a revocable trust offers a more comprehensive and enduring solution. Unlike a financial power of attorney, a trustee’s asset-management powers under a revocable trust persist even after the grantor’s death, ensuring a seamless transition of asset management without the need for additional legal processes.

Assure Privacy

The establishment of a revocable trust provides an added layer of privacy compared to the probate process. With probate, details of a will and a list of the decedent’s probate assets become part of the public record. Conversely, a revocable trust maintains confidentiality, as neither the trust agreement nor the trust assets are disclosed publicly. While it does not guarantee absolute confidentiality, a revocable trust offers a higher level of privacy, making it an appealing option for those who value discretion in the administration and distribution of their estate in Maryland.

Contact Our Law Firm for Help Setting Up a Living Trust in Maryland

Get support from our Maryland estate and trusts lawyers by calling Rice, Murtha & Psoras at (410) 694-7291.