Waldorf, MD Wills + Estates Attorney
When you are thinking about setting up a trust fund, you have a lot of options. There are multiple kinds of trusts that you can set up, and the reasons for setting up a trust are truly endless. You could set up trusts to benefit charities, take care of relatives, fund a research project, or have any other purpose you can dream up. Moreover, it is fairly easy to create trust, especially when compared to other types of legal documents. However, it is precisely that it is so simple to create trust that many people set up the wrong kind of trust or set up its terms in an unfavorable way without even knowing it.
That is where estate and trusts-focused lawyers come in. There is a lot to work with in trust law, and an experienced attorney can help maximize the benefits of a trust to you and the beneficiaries you want to help out.
To get a free analysis of your situation, call the trusts attorneys from Rice, Murtha & Psoras at (410) 694-7291.
What is a Trust in Waldorf, MD?
Trusts are legal agreements where one party sets the terms of the agreement, another party administers the terms of the agreement, and a third party benefits. The party that sets up the trust is called the “grantor,” the party that runs the trust and carries out the terms of the trust is the “trustee,” and the people who reap the benefits of the trust are the “beneficiaries.”
The purpose of a trust is laid out by the grantor, and this purpose can be anything they want it to be that is still within the bounds of the law. Depending on the nature of the trust, the grantor may be able to change things easily, or they may need the help of an attorney.
What Do I Need to Do to Create a Trust in Waldorf, MD
All you need to do in order to create a trust in Maryland is have a declaration of trust stating who the grantor, trustee, and beneficiary are as detailed in Md. Code, Ests. & Trs. Art., § 14.5-406. Technically, you do not need a written “trust instrument.” However, if you do not have one, it can become much harder to prove that the trust you created exists, so our lawyers always recommend that any trust you create is memorialized in writing.
Types of Trusts You Can Create in Waldorf, MD
You can make a trust for any legal purpose. Accordingly, there are several different kinds of trusts you can create with the help of our trusts attorneys.
Revocable Trusts
First, there are revocable trusts. These trusts are arguably easier to set up than others because the grantor – the person who creates the trust and determines its purpose, can also be the trustee, the beneficiary, or both. Moreover, the grantor can more easily modify this trust during its lifetime than other kinds of trusts. Revocable trusts are not without downsides, though. Namely, since the assets contained therein are controlled by the grantor so heavily, the grantor is said to possess the things inside the trust. This can have undesirable implications, especially for taxes.
Irrevocable Trusts
Second, irrevocable trusts are a form of trust that is much harder for the grantor to modify once it is made. To change the terms of these kinds of trusts, you will usually need the assistance of our trusts lawyers to ensure that everything goes smoothly. The main benefit of an irrevocable trust is that capital gains tax and income tax are not paid on assets in these trusts, so many individuals set up irrevocable trusts for property or to provide funding for a certain purpose.
When creating an irrevocable trust, you need to be very careful about how you word your declaration of trust. Since these trusts are tougher to modify, it pays to go over things with an attorney before finalizing the document.
Testamentary Trusts
Finally, testamentary trusts are purpose-built to assist with estate planning and ensuring that certain assets go where the grantor wants them to. Testamentary trusts can be used to ensure that certain things go to certain people or to ensure that assets are not distributed to beneficiaries until a certain event transpires in the future.
Reasons to Make a Trust in Waldorf, MD
There are countless reasons you could make a trust in Maryland. Below, we will go over some common and no-so-common reasons why people create trusts.
Care for Children
A very common reason to set up a trust is to provide money to a child when they reach adulthood. Usually, these trusts have a specific purpose in mind for those funds and the trust documents will often state as much. For example, you can set up a trust with the purpose of paying for college tuition or other higher education purposes once the child comes of age.
Care for Animals
Under Md. Code, Ests. & Trs. Art., § 14.5-407(a), you can create a trust with any of your living pets, or all of them together, as beneficiaries. The primary reason people set up trusts to benefit pets is when they expect that their pets may outlive them, although it is perfectly fine to set up this kind of trust if you just want your animal best friend to have the time of their life.
Charitable Trusts
You can create a trust to benefit a charitable organization. In this case, instead of naming an individual or group of people as the beneficiary, you name the organization you want the trust to help.
Contact Our Waldorf, MD Trusts Lawyers and Talk About Your Situation Today
Rice, Murtha & Psoras’s trusts lawyers are here to assist you when you call our office at (410) 694-7291.