Trusts Attorney in Dunkirk, Maryland
We all know it’s important to plan ahead for our future—not only for ourselves but for our loved ones as well. However, not everyone is familiar with just how to go about doing that. You may know that you need some kind of estate plan, but many people falsely believe that a will is sufficient. While a will may be a good place to start, you should learn about the benefits of a trust and be able to answer the question, “How is a trust different than a will?”
If you’d like to learn about the different types of trusts available and want to get started setting up a trust, contact our estate planning attorney at Law Offices of Julie A. Schejbal, CHTD. From our office in Dunkirk, we are proud to work with clients throughout Maryland, including Calvert County, Prince George’s County, Charles County, and St. Mary's County. Schedule a consultation today.
Overview of Trusts
A trust is a common estate planning document that allows you to allocate assets and set them aside for a beneficiary. In one sense, trusts work in the same way that wills do—but trusts differ from wills in a couple of key ways. With a will, you’ll name certain assets that you want given to your heir after you pass away, but first your estate must go through the process of probate. Additionally, with a will, the assets will stay in your name until you pass away and only then can ownership be transferred.
With a trust, on the other hand, you move the assets you want into the trust while you’re still living and the actual ownership of the trust is moved into the name of your trustee. This means that you’re not legally the owner of the assets anymore even though you still maintain complete control over it. Then, when you do pass away, the assets can be transferred directly to your beneficiaries.
There are two main types of trusts that may be useful to you while estate planning: a revocable trust and an irrevocable trust.
Revocable trusts: Also called a living trust, a revocable trust can be revoked or modified at any time during your lifetime as long as you’re still of sound mind. For example, you can move assets in and out of the trust, rename or name new beneficiaries, change the terms of the asset allocation, or even change who your trustee is. A revocable trust gives you the most flexibility, while also offering you the protections of a trust versus a will.
Irrevocable trusts: An irrevocable trust, on the other hand, cannot be modified once it’s been established and the assets are transferred over into the name of your trustee. Although they offer less flexibility by design, these can be preferable to some people because of the tax advantages and the added security because the assets will be protected from creditors or claims.
Process of Creating a Trust
The first step to creating a trust is to meet with an estate planning attorney. An experienced lawyer will listen carefully to what your wishes and priorities for the future are and help you craft an estate plan that’s specific to your individual needs. They can help you select the assets you want to include in the trust, make sure your beneficiaries are set up correctly, and help you choose a trustee. Then, your estate planning lawyer will ensure your trust is well-written and legally-binding so your assets can be transferred over smoothly and without involving the courts.
Why Having a Trust is Important
Trusts may not be a necessary part of everyone’s estate plan, but there are several reasons why you may want to create a trust in addition to a will.
Bypass probate: One of the biggest advantages of a trust is that it allows you to bypass the process of probate that most wills have to go through. Probate can be an expensive and time-consuming process—but with a trust, you know your heirs will have more immediate ownership over the assets.
Assets can be kept in trust until a future date: Trusts allow you more control over how your assets are distributed and used. For example, you can stipulate that an asset by held in the trust until your beneficiary reaches a certain age (such as 18 or 21), or until they accomplish a certain milestone (ie. graduating from high school or college).
Protection in case of mental incapacitation: None of us truly know what our future will bring. In case you unexpectedly become mentally incapacitated, you’ll know that your assets are in the good hands of your trustee and that your loved ones will be taken care of no matter what.
Private: Finally, trusts are always kept private, unlike wills which become public record after you pass away. For those who don’t want their financial details made available to the public, a trust is probably a better choice.
Choosing a Trustee and Beneficiaries
Everyone should take the time to seriously consider who their beneficiaries and trustee will be before finalizing any documents. This is even more important for an irrevocable trust since it cannot be changed. In any case, your trustee should be someone who’s financially responsible and who you trust to carry out your wishes after you pass.
Trusts Attorney in Dunkirk, Maryland
If you’d like to speak with an attorney about the pros and cons of setting up a trust, reach out to us at Law Offices of Julie A. Schejbal, CHTD to schedule a consultation.