Estate planning is a process that allows you to decide how you want your personal affairs handled, including what you want to happen to your personal property, in the future. You can also draft certain documents that will allow you to maintain control over your medical care and financial needs in case of incapacitation. In many cases, it is necessary to consider more than just a will in order to have a complete estate plan.
A trust is an estate planning tool that lets you set aside and protect assets for a specific use. It could be for the support of a special needs loved one, for a beneficiary once he or she reaches a certain age, charitable giving, and more. There are different types of trusts, and you may want to learn about the options available to you and how one could be helpful in accomplishing your goals.
Types of trusts you may consider
A trust is a type of account managed by a trustee or an organization. There are trusts that are revocable over the course of your life, meaning you can change the terms, while others are not changeable once set. The right option depends largely on what you hope to accomplish with your estate plan. Some of the types of trusts you may consider include:
- Living trust – This is a type of trust created by a grantor, who usually retains the ability to change the trust while living. It becomes irrevocable after the grantor passes away.
- Charitable remainder trust – This is a type of trust that dispenses trust assets to beneficiaries for a certain amount of time, then gives the rest of the assets to charity.
- Irrevocable life insurance trust – This is a type of trust that is especially important for high-income, wealthy individuals. It can allow for some tax savings, and it provides protection and benefits for beneficiaries.
These are only a few examples of the types of trusts you may find beneficial for your estate plan. An evaluation of your goals, needs and finances can help you understand what options may be most beneficial for you and your loved ones. If you are unsure about whether a trust could benefit you or what you need to complete your estate plan, it may be helpful to speak with an experienced Maryland estate planning attorney.