REVOCABLE LIVING TRUST IN MARYLAND

WHAT IS A REVOCABLE LIVING TRUST (RLT)?

A revocable living trust (RLT) is a legal document that includes instructions for who you want to handle your final affairs and who you want to receive your assets after you die.

An RLT, much like a will, is a way to put your wishes down in writing. However, while a revocable living trust is a private disposition of your assets that does not need to be submitted to the register of wills, a last will and testament is completely public and does need to be submitted to the register of wills for probate proceedings.

A revocable living trust is often used as a will substitute to avoid the probate administration process. However, a will and revocable living trust often complement each other. Thus, a pour-over will is used along with an RLT to make sure that all assets, even those that were not titled in the name of your trust during your lifetime, will still be distributed pursuant to your wishes you indicated in your revocable living trust.

HOW DO REVOCABLE LIVING TRUSTS WORK?

The Revocable Living Trust holds your assets during your lifetime. You keep full control over your assets and can do everything you could do before, including buying and selling. Nothing changes but the names on the titles.

During your lifetime you can alter, add, change or terminate your RLT as long as you are deemed competent at that time. However, the preparation of proper official documents may be required.

At your death, your RLT becomes irrevocable and is no longer able to be amended or changed. The Trustee you appointed in your RLT will take over the duties and distribute the assets according to your wishes. Please note that all of the assets that were in your trust will still be considered in your estate for tax purposes.

WHY MAY I WANT TO HAVE A REVOCABLE LIVING TRUST?

  • Revocable Living Trust is private - while a Will, upon death, becomes public and can allow anyone to see who the beneficiaries are and how much they inherited;
  • RLT gives you and not the courts, control over the assets you leave to your minor children and grandchildren;
  • It may help you to avoid probate;
  • RLT prevents the court from controlling your assets at incapacity, - you appoint a Trustee to take care of your assets for you in case you are incapable of doing so;
  • It may help to provide family harmony;
  • RLT can be used to avoid ancillary estate proceedings if you own real property in a jurisdiction other than in a jurisdiction in which you are domiciled;
  • Revocable Trust offers more structure than a power of attorney because it has definite trust terms for the trustee to follow;
  • The creation of RLT is not a gift for gift tax purposes;
  • And many more.

WHAT DOES THIS MEAN FOR MY TAXES?

If you have a Revocable Living Trust and are your own trustee, everything you put in the trust will continue to be taxed using your social security number during your lifetime. The income will appear on your tax return just as it was before you put assets in your RLT.

Deciding what will happen to your home, your financial assets, and your personal possessions during your incapacity and/or after your passing can be a difficult process. However, if you don't take the time to make these decisions now, a court may end up taking control and/or dividing your property for you.

For a more detailed discussion on whether you need a Will or a Trust and other general questions about your estate planning, please schedule a free consultation with Avrine Law Firm, LLC today.

It has been an absolute pleasure dealing with this law firm. I found Iryna to be very thorough and honest, as well as caring! Hard to find these qualities in an attorney now days. Thank you for all your help setting up our trust!

Superb!

Michael P. 2 years ago