Types of Trusts You Can Include in a Maryland Estate Plan

 Posted on April 14, 2025 in Estate Planning

There is much more to estate planning than just creating a will. Trusts provide legal protection for asset distribution and have many purposes. It is common practice to include trusts in your estate plan, and choosing the right trusts will depend on your unique circumstances. A Silver Spring, MD estate planning attorney can help you decide which trusts best suit your estate plan needs.

Common Trusts Included in Maryland Estate Plans

Revocable, irrevocable, and testamentary trusts are among the most common types of trusts. A revocable living trust allows you to place assets and alter or revoke them. You can act as the trustee during your lifetime and appoint someone to control it after your death. It is a more flexible option.

An irrevocable living trust can not be modified as easily. It permanently transfers assets out of your estate, protecting them from litigation and reducing your estate taxes. It is most commonly used as a means of asset protection and long-term support for your beneficiaries. 

A testamentary trust only takes effect after your death. This type of trust follows the rules laid out in your will, distributing your assets on your terms and dictating how everyone listed in the will receives their inheritance. This is another way to protect your assets, simply using your will as the guide.

Situation-Specific Trusts You Can Include

Some types of trusts serve more specific needs. Examples include:

• Charitable trust: Created to ensure the distribution of assets to a particular charity or the public

• Special needs trust: Designed to help people with disabilities without impacting their ability to access Supplemental Security Income or Medicaid

• Life insurance trust: Makes the trust the beneficiary of a life insurance policy to exclude it from the estate

• Spendthrift trust: Protects your assets from creditors and your own poor financial decisions

• Generation-skipping trust: Allows you to pass assets directly to your grandchildren or other descendants, bypassing your children

Most trusts have some form of tax advantage under Maryland’s estate tax laws. A lawyer can help you understand how they may benefit you.

The Basics of Creating a Trust

In the simplest terms, creating a trust starts with deciding what assets you want to place in it, identifying who will receive them, establishing the rules, and selecting your trustee. With all this information, your attorney will draft the official trust document. 

Your trustee is the person who will manage your trust after you are gone. This can be a family member, a friend, or even a third party, such as a bank. There are benefits to choosing a third party, namely that they are not tied to personal bias and family dynamics. They will objectively abide by the rules you lay out in your trust document. These rules will vary depending on the type of trust.

Schedule a Free Consultation With a Silver Spring, MD Estate Planning Attorney

Estate planning is not only about distributing wealth. It is how you ensure the fulfillment of your wishes after death, and trusts are an effective way to help you do exactly that. If you are ready to start planning your estate or want to make updates to an existing estate plan, a Potomac, MD trust and estate planning lawyer at The Eleff Law Group can present you with all the options that would work best for you and help you begin securing the future for your loved ones. Call 301-857-1990 to schedule your free consultation today.