Columbia, MD Wills + Estates Attorney
Trusts are incredibly versatile legal agreements. There are so many different uses for them that it really can boggle the mind. You can create a trust to obtain tax benefits, transfer property, help out friends and family, and so much more. Trusts are easy to set up, too. In fact, they are so easy to set up that sometimes people make mistakes and set up a trust that does not do what they want it to.
It is always a good idea to retain legal counsel when you are thinking about setting up or modifying a trust. We can work with you to figure out the right kind of trust for your situation that best accomplishes what you have in mind. Additionally, if you already have a trust and you want it modified, we can help with that, too.
Reach out to one of Rice Law’s trusts attorneys today by calling (410) 694-7291 and receive a free analysis of your situation.
What Can You Use a Trust for in Columbia, MD?
You can use a trust for anything that is legal. So, for example, you cannot set up a trust to fund an illegal methamphetamine operation. Apart from that, the world really is your oyster when it comes to what you can set up a trust to do. Some of the things you may set up a trust for include:
Paying for Education
One of the most common reasons people set up trusts is to help their children or other family members pay for an expensive education. When you set up this kind of trust, it is good practice to make sure that minor children cannot get their hands on these funds and that they are put to the correct use. To that end, our trust lawyers can put language in the trust document that prevents the beneficiaries from using the funds until they come of age and also language that ensures those funds go towards higher education or another fruitful endeavor.
Transfer Property
Another reason people frequently set up trusts is to transfer property without as much of a hassle as there otherwise would be. For example, you can put real estate in a trust and, not only can this make it easier to transfer in certain circumstances, but it can provide tax benefits. This is one way that people who own lots of properties can afford to do so without paying an enormous amount in capital gains taxes.
Estate planning is another major reason that people set up trusts to transfer property. When you place property in a trust, it technically no longer belongs to you. It belongs to the trust. Therefore, it does not go through probate when the time comes. Trusts are a way to circumnavigate the wording in a will or create a more fluid asset that can be altered easily without having to go back and alter your will and other estate documents frequently.
People frequently will also set up trusts to transfer firearms in a legally expedient fashion. If you own an item regulated by the National Firearms Act, you are the only person who can possess it. NFA items are often expensive, so people who own them may want to decide where they go in a will. However, if someone “unauthorized,” like an heir, possesses that item, they can get in legal trouble. The way to deal with this is to set up a “gun trust” where all of the trustees “own” the NFA item and are allowed to possess it.
What Kinds of Trusts Are There in Columbia, MD?
There are three main kinds of trusts in Maryland: revocable trusts, irrevocable trusts, and testamentary trusts.
Revocable Trusts
Revocable trusts can be ended by the grantor at any time. Additionally, the grantor has a lot of control over what happens to trust assets and trust terms in a revocable trust. They may even also be the trustee or the beneficiary. However, because grantors have so much control over the assets in revocable trusts, the law treats it like they possess those assets, so there are basically no tax benefits in revocable trusts.
Irrevocable Trusts
Irrevocable trusts, however, have many tax benefits that are possible. The tradeoff, though, is that the grantor has much less control over what happens in irrevocable trusts. The grantor sets up the trust, appoints a trustee, names the beneficiaries, and then the trust is on “fire and forgets” until the grantor takes some significant legal steps to have the trust modified.
One example of a reason that you may modify a trust is this: suppose a trust is set up to pay for a child’s college tuition, but when they grow up, they decide they want to pursue a career in a rock band. In that case, the grantor can modify the terms of the trust – with the help of an attorney – to benefit the beneficiary for another purpose besides going to college, which may no longer be in the cards.
Testamentary Trusts
Finally, testamentary trusts are made with the sole purpose of managing the distribution of assets after the grantor dies. In fact, testamentary trusts do not come into existence until a will is actually probated. These trusts operate similarly to irrevocable trusts in that their terms are not easy to change once they come into effect.
However, the grantor can modify the terms of the trust by changing their will before they pass away. One advantage of a testamentary trust is that it can hold onto assets until a certain event happens. For example, you can set up a testamentary trust to benefit your minor children but make no distributions until they turn 18 years old. A disadvantage of a testamentary trust is that it does not avoid probate, so it will be subject to certain taxes.
Setting Up a Last Will and Testament in Columbia, MD
For a last will and testament to be valid in Columbia, several conditions must be met. First, the person creating the will must be at least 18 years old. Next, it is essential to be of sound mind and fully comprehend the value of your property and assets. Furthermore, if you have an existing will, you must revoke it to prevent any confusion during the probate process after your passing.
While there is no legal requirement to hire an attorney, having the support of our lawyers can be immensely beneficial. Many people tend to use pre-printed wills or templates to save costs. However, these documents are not customized for your specific needs. Poorly constructed wills often put loved ones in a challenging situation when it comes time to distribute the assets.
With the expertise of an attorney who has spent over twenty years navigating Maryland’s probate laws, you can rest assured that your last will and testament will be both valid and enforceable. Our team is committed to honoring your wishes rather than simply filling in the blanks.
Our team will help you steer clear of common pitfalls, while also taking into account various factors that may not have crossed your mind if you were to draft your will alone. Additionally, our lawyers can devise tax strategies to include in your will that can avoid inheritance taxes that can ease the financial burden on your family, helping them avoid unexpected and unnecessary expenses.
What to Consider When Drafting a Will in Columbia, MD
There are numerous issues you will want to consider when drafting a will. You will need to name a personal representative to act as the executor of your estate. They will distribute the assets designated in your will after your passing. You must also name the beneficiaries you want your assets to pass to. If you have children, naming a guardian is also a crucial decision.
Designating Your Executor
Selecting an executor is one of the most crucial decisions when drafting your will. This individual will be responsible for ensuring that your wishes are fulfilled as intended and in accordance with your directives. They will submit your will to the probate court following your passing, allocate your assets to your beneficiaries, and act on behalf of your estate, like potentially filing lawsuits.
Being named the executor of a will is a significant responsibility, so it is essential to select someone who can handle the role. Testators may opt for their spouse, adult child, close relative, or a trusted friend to serve as their executor. An executor does not need to be a beneficiary of your will, nor is it necessary for them to be aware of the will’s contents prior to your death and its submission to the probate court.
Naming Your Beneficiaries
You must also determine who the beneficiaries of your estate will be and how your assets will be distributed among them. We will compile a list of all your assets, including real estate properties, personal collections, savings and investment accounts, and cash reserves, so you know exactly what inheritance you are leaving to your beneficiaries. Additionally, we can set up trusts for specific assets, ensuring they remain inaccessible to beneficiaries until they reach a certain age or condition is met.
Besides naming children, spouses, and other individuals as your will’s beneficiaries, you also have the option to allocate assets or specific amounts of money to charitable organizations. Our team can help you determine who you want to inherit and how to draft your will to distribute it.
Appointing Guardians
Having children often motivates individuals to create a will. This allows them to secure a safe and stable future for their children in the event of their unexpected passing.
One of the most significant aspects of drafting a will is the appointment of a guardian for your children, a choice with many implications for their welfare and upbringing. When designating a guardian, you should consider both a primary and secondary choice, giving yourself a contingency plan should your first choice be unable or unwilling to fulfill the role. Our lawyers will help draft the terms of your will to ensure that your children will be cared for by someone you love and trust.
Determining What Assets to Include When Drafting a Will in Columbia, MD
Your will should contain a detailed inventory of all the assets you own. The list should also including their value, where they are located, and specific instructions regarding their distribution after your passing. Named assets in your will include real estate, investment portfolios, bank accounts, and any other valuable personal possessions you own.
Our attorneys will identify all the real estate properties you possess and provide details on where to find the deeds and titles following your death. Your will should list your primary residence and its worth, as well as any rental properties or vacation homes you own and their value.
We will also evaluate and identify all your existing bank accounts, including both savings and checking accounts. These accounts must be solely in your name and not shared with anyone else, such as your spouse. Banking information can vary significantly over time, which is one of the many reasons it is essential to regularly review and update your will with the help of our attorneys.
If you possess any investment assets, such as stocks, mutual funds, or bonds, our attorneys will also include them in your will, along with any retirement accounts you may have.
Chat with Our Trusts Lawyers from Columbia, MD Today
Rice Law trusts lawyers are ready to give you a free analysis of your situation when you call our offices at (410) 694-7291.