Attorney Answer:

A:  The short answer is that a properly created and funded trust should avoid probate.  It is very important to make sure a trust is or will be funded (meaning the with the property that was supposed be governed by the trust actually transfers into it). Unfortunately we’ve seen some planners go through the effort of creating a trust without doing corresponding deeds which forces the real estate to go through probate.  Our trust packages always include a deed for the owner’s Maryland home.  

You know the old saying about there only being 2 certain things in life - death and taxes?  A Trust does not automatically exempt from taxation.  However, many estates are exempt from death taxes.  If you meet with our planning attorney we will discuss taxes that may apply to your situation. 

Attorney Answer:

 A: To form a Trust at the most basic level, one needs 3 separate roles - a TRUSTOR (also called a Grantor or Settlor), a TRUSTEE and a BENEFICIARY.  The Trustor/Grantor is the person making the Trust, the Trustee is the person managing it and the beneficiary is (not surprisingly!) someone who benefits.   Usually a Trust is formed by a written document (called the Trust Instrument or Trust Agreement or Declaration of Trust) that spells out these three roles and describes what happens to the property.  While it is not unusual to see 75, 90 or 100 page trust documents, we aim to create clear, understandable trust instruments that fully outline clients’ wishes in a fraction of that length. 

A: Both a Will and a Trust explain the planner’s wishes. It is possible to have trust language in a Will (a testimentary trust) but when people talk about Trusts usually they mean a separate Trust instrument (like a Revocable Living Trust) that operates outside of the Will.  Both name someone to manage property after the planner’s death.  The biggest difference is that a Will goes through the courts and the probate process, while a properly set up trust should avoid the probate process and transfer property without any court involvement.  

Attorney Answer:

 As the names imply, a revocable trust can be revoked or changed by the planner, who typically maintains full control during their lifetime.  In contrast an irrevocable trust cannot be changed after it is made.  A planner does not need to get a separate tax identification number or file separate tax returns for a Revocable Trust while the planner is living.  In contrast, an Irrevocable Trust will need to file its own tax returns each year (besides the planner’s personal income tax returns).   Generally, most planners our firm sees who want a Trust as a part of their estate planning choose a Revocable Trust.

A:  marital trusts were historically used to allocate property among spouses to minimize federal death taxes. A few decades ago these were very popular and useful tools to minimize taxation. Due to changes in federal taxation law and a huge increase in the thresholds for federal estate taxation, the current need for Marital Trusts or A/B Trusts is questionable for all but the largest estates. Married couples with estates over $11 Million might benefit. (of course, tax law could always change and these could at some point again become a good planning tool). 

A:  a trust written into the language of the planner's Last Will and Testament.  Unlike a revocable trust, a testamentary trust only kicks in after the planner dies.  

A:  Trusts can be very effective tools in a variety of situation but they should not be considered  a universal  “best planning” strategy.  It is helpful to sit down and talk about your specific planning goals but in our experience Trusts tend to be most useful when the following circumstances apply: 

• Minor beneficiaries (or special needs)
  

• Blended Family (his/hers/our kids)

• Property owned in different states

• Many beneficiaries 

• Desire to hold funds and disburse at set times rather than liquidate everything immediately

• Need for a single individual to manage and/or liquidate assets

• Privacy needs (desire to keep trust terms out of the public eye)

A: Each lawyer sets their own fees. Many law firms to do estate planning at set fees for particular types of documents / situations. Some offer a “free” seminar and charge thousands for a revocable trust package. Some form sits provide boilerplate planning documents for clients to sign on their own. Our trust packages start at around $1200 for a single planner and $1,600 for married couples for a standard Revocable Living Trust and associated planning documents (2024 pricing at the time of updating this Answer), includes attorney meeting, pour-over wills, health care and financial powers of attorney and a deed for the planner’s principal residence in MD, but please check out our pricing guide or call our firm for current details.