Similar to a Will, a Revocable Living Trust (or “living trust”) is a legal document that controls what happens to someone’s assets when they pass away. However, there are a few key differences between Revocable Living Trusts and Wills in the State of Maryland.
What is a Living Trust?
A living trust is a legal document that provides for the management and distribution of your property in the event of your death or incapacity. Once the trust is signed, ownership of the assets must be legally transferred into the trust by Deed or other transfer document. As the Initial Trustee, you will still remain in complete control of your property as long as you are capable. If you become incapable, a successor trustee you’ve named will be able to act on your behalf.
Key Differences Between A Will and a Living Trust
A Living Trust Protects Your Privacy
When you die with a Will, that Will is submitted to a probate court, and becomes part of the public record. Anyone who wishes to can see all of your debts, assets, and exactly who inherited your property. A Trust, on the other hand, transfers assets after death privately, usually leaving little or no public record.
A Living Trust Avoids Probate
Probate is the process through which the courts identify, assess, divide, and administer your assets to your heirs. Probate can often take many months (or years in the event of complex proceedings) and incurs costs for administration expenses, personal representative fees, attorney fees and court fees.
Assets such as real property, bank and investment accounts, and other items cannot be distributed until after the process is complete. If those assets are sold, the money must be placed into an Estate account until the Estate is formally closed. A Revocable Living Trust, on the other hand, provides for an easy transfer to your beneficiaries. Since the assets are owned by the Trust instead of by you personally, the new Trustee merely steps into your shoes and carries out your wishes.
Do You Still Need a Will?
Usually when you enter into a Revocable Living Trust you will also have a simple Will, known as a “Pourover Will.” This acts as a “back up” to make sure that any assets you have not transferred into the Trust, or that you receive after the Trust has been formed (or even after your death), go into the Trust and are distributed according to its terms. The cost of such a Will, when done in conjunction with the Trust, is usually minimal.
How Can I Obtain a Revocable Living Trust?
The first step in the process is to determine whether or not a Revocable Living Trust is right for you. A Trust is more expensive than a Will and some people only need a simple Will. However, if you own a great deal of property, especially in more than one state, or have business interests, children by a prior marriage, or other special circumstances, then a Trust can save time and money far exceeding the initial cost.
Give us a call at (410) 591.6992 for a consultation to determine if a Revocable Living Trust is right for you. As a living trust attorney in Maryland, we can answer any questions that you may have about the process and help you to create an estate plan that is cost effective and the right plan for you.