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How does a revocable trust avoid probate?

On Behalf of | Jun 27, 2024 | estate planning |

In the United States, probate can consume up to 10% of the estate’s value. This staggering cost is a significant burden for many families, which is why legal and financial experts strongly advise against probate when planning your estate. But what is probate, exactly?

Probate refers to the court process of validating your will, settling debts and distributing your assets after you pass away. This legal process can be lengthy, costly and very public, causing families further emotional distress during an already difficult time. Fortunately, there are tools and strategies you can use to spare your loved ones from this added stress. One of them is setting up a revocable trust.

How revocable trusts work

When you establish a revocable trust, you create a legal arrangement that allows you to transfer ownership of your assets to the trust while you are still alive. This means you can maintain control over your assets and make changes to the trust as needed.

In essence, a revocable trust acts as a container that holds your assets, allowing you to manage them during your lifetime and automatically transferring them to your beneficiaries when you’re no longer here. This streamlined process saves your family from the complexities and expenses of probate, giving them a sense of security and peace of mind.

Making a revocable trust in Maryland

Setting up a revocable trust in Maryland is relatively straightforward. Still, it is crucial to understand the specific requirements and regulations that apply to ensure your trust is legally binding and effective.

First, you will need to decide what type of trust you want, either an individual or shared trust. Then, you can create a trust agreement that outlines the terms of the trust, including the property you wish to include, the beneficiaries and the trustee who will manage the trust if you become incapacitated or pass away. Once you have completed the trust agreement, sign it before a notary public to make it legally binding.

When you create a revocable trust as part of your estate plan, you are taking a proactive step to shield your family from the unnecessary stress and financial burdens of probate. Taking control of your estate planning today can ensure a bright and secure future for your loved ones, even when you are no longer here to care for them.

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