Annapolis Trust Attorney
Trusts are an effective way for a person to set aside assets for their loved ones to avoid certain taxes and bypass probate. Trusts are not merely for the upper-socioeconomic tier of wealthy citizens. If you are considering how to plan your estate for the next generation, contact our Annapolis trust attorneys today for help.
Different Types of Trusts
- Revocable Trust—The revocable trust is also known as a living trust and it can be altered throughout your lifetime. It allows the grantor to leave assets to loved ones while avoiding probate.
- Irrevocable Trust— An irrevocable trust cannot be modified unless you have approval from all beneficiaries named in the trust. The grantor still has access to the funds in an irrevocable, but they are no longer considered the owner of assets listed in the trust. Unlike a revocable trust where the grantor must pay taxes on the property, property in an irrevocable trust is considered to belong to the trust itself and thus there are different tax implications.
- Special Needs Trust—Special needs trusts exist so that a decedent can leave a child or relative who has special needs with financial money to help with non-support items. This allows your loved one to remain eligible for the Maryland Medical Assistance Program. As The Maryland Attorney General points out, it is critical that all special needs trusts comply with the COMAR 10.09.24.08-2C and § 1917(d)(4)(A) of the Social Security Act so that your loved one does not suddenly lose critical long-term care.
- Medicaid or Long-Term Care Planning Trust—This type of trust allows people to plan into retirement when they may need to pay for a nursing home or other assisted-care. Instead of emptying lifelong savings to pay for long-term care, a person can place assets into this type of trust and still qualify for Medicaid in Maryland.
- Charitable Trust—According to How Stuff Works, the largest charitable trust in the world is the Bill and Melinda Gates Foundation Trust. Charitable trusts are a great way to benefit some of your favorite charity organizations while also easing the tax burden on your estate.
- Generation-skipping Trust—This type of trust also reduces the amount of estate taxes that will have to be paid. As the name suggests, this trust leaves property to grandchildren or anyone who is 37.5 years or more years younger. If your children are financially stable but you want to set the future generations up for success, this is a great option for your estate.
- Spendthrift Trust—If you are worried that the trust’s beneficiary struggles to manage their finances, this trust may be the solution. Assets in this type of trust are protected from creditors and are managed by a trustee who looks out for the beneficiary’s best interests.
- Marital Trust—Marital trusts allow all co-owned assets to be transferred to the surviving spouse once a person passes away without paying estate and inheritance taxes.
Contact An Annapolis Trust Attorney With Your Questions
Even within these broad types of trusts, there are different ways to set up a trust depending on your desired outcome. A knowledgeable attorney can assist you in choosing the right type of trust to set up and filing all of the legal paperwork. Contact our Annapolis trust attorneys at Frame & Frame at 410-255-0373 to schedule a free consultation today.