People may have told you that you should have a revocable trust to avoid probate and protect yourself and your family. To know whether you need one or not, you need to understand what these trusts are and how they work in Maryland.
Understanding Revocable Trusts
A trust is a legal device that is set up to hold property, and there are many different types of trusts that are used to serve various purposes. Revocable trusts are most often used these days to avoid probate. Because they are revocable, they can be changed or dissolved at any time as long as you remain legally competent.
These trusts are sometimes called living trusts because you set them up and use them during your lifetime, in contrast with a testamentary trust that takes effect after your death.
A trust operates with three roles. The grantor puts property into the trust, the trustee manages the property in the trust, and the beneficiary gets to use the property in the trust when it is distributed by the trustee. In a revocable trust, these three roles are handled by the same person. When you create a revocable living trust, you transfer property into the trust, you control it, and you use it, just like you did before it became part of the trust. The trust can hold all types of property, from cash and bank accounts to real estate and vehicles.
Advantages of a Revocable Trust
We create revocable trusts for clients for two primary reasons. First, if you should become incapacitated and unable to manage your own financial affairs, the successor trustee named in your revocable trust can step in to handle matters for you.
Second, when you pass away, the property in the trust will not be subject to the lengthy and expensive Maryland probate process. Instead, it will go directly to the people you name in the trust as your successor beneficiaries. This happens privately, out of court.
With your property in a revocable trust, you get:
- Flexibility because you can change the trust or remove property from the trust at any time
- A way to avoid the probate process to save time, money, and headaches for your loved ones
- Protection in case you become suffer an accident or illness that makes you unable to manage your property
- A way to avoid the need for conservatorship
- Immediate payment of assets to your loved ones after you pass, rather than waiting for up to a year or more for probate to conclude
- Privacy because unlike a will, which becomes a matter of public record when it is admitted to probate, the terms of the trust are disclosed only to a few people
Living trusts can be helpful for almost anyone, but they are especially useful if you own real estate in more than one state, own a business, or have a large number of assets. Creating a living trust now saves your loved ones time and money in the future.
Find Out More About Creating a Revocable Trust
The Law Office of Ralph W. Powers, Jr., P.C. can review your situation and determine whether it makes sense to create revocable trust. We can not only prepare the trust documents, but ensure that your property is transferred into the trust and that you understand how to administer the trust now and in the future. Just schedule a consultation to find out the benefits a revocable trust could provide.