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Why would I want to set up a living trust?

On Behalf of | Jan 5, 2023 | estate planning |

Many people have heard that a living trust can help their loved ones avoid the probate process.

The Maryland probate process can be costly and take several weeks or months to complete.

A Marylander can create a living trust while they are still alive. There are a number of ways to draft a living trust, and each can serve different needs.

Importantly, because trusts are separate legal entities, kind of like a corporation, property that the trust owns does not pass through a deceased person’s probate estate.

While trusts save on routine probate costs, as a word of warning, other family members and creditors can legally challenge a trust in much the same way that they would challenge a will.

Avoiding probate is just one reason why people might consider living trusts

Besides avoiding probate, there are other reasons people create living trusts.

  • Related to avoiding probate, trusts give a family a measure of privacy over their personal and financial affairs. Normally, trusts do not get filed in court and are not a matter of public record.
  • When properly drafted, a living trust can give legal protection to family members from their creditors, from the loss of government aid and other financial consequences.
  • Sometimes, living trusts are the best way to protect family members who are not responsible with money from their own bad choices.
  • Living trusts can allow families to manage their property more efficiently.
  • Certain types of living trusts may offer tax advantages.
  • Living trusts can help the person who created the trust protect their assets from their creditors, including ex-spouses.

Whether a trust is right for an Anne Arundel County resident, and what provisions that trust should include, will depend heavily on that resident’s personal and financial situation.

Someone who wants to explore creating a living trust should speak with an experienced estate planning attorney.

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