Wills, Trusts & Estates
Law Office of Steven M Berger, LLC
services.png

Estate Planning

Trusts

Trusts

Creating a trust ensures the comprehensive control over what happens as is possible in the event you cannot act for yourself. In creating a trust, you outline not only what your wishes are as you do in a will, but also you also create legal framework in which your plans are automatically activated. In creating this plan, you also front load the costs associated with your estate, minimizing cost and stress for your heirs. Here is a list sample situations where you might want to take advantage of the most common type of trust: a revocable living trust.

Types of trusts

Revocable Living TRUST

A revocable living trust is the most common kind of trust we use. This trust gives you the most control to determine what happens to your assets when you pass and avoids probate for your heirs.

SPECIAL NEEDS TRUST

We can prepare a special Needs Trust to ensure that receipt of an inheritance by a disabled child does not cause them to lose governmental benefits, which often include living arrangements in sponsored housing.

CHARITABLE REMAINDER TRUST

We can help you maximize your charitable giving by setting up a charitable remainder trust, reducing taxable income and taking advantages of tax-exemptions.

IRREVOCABLE LIFE INSURANCE TRUST

Another tool our office uses is an irrevocable life insurance trust which removes the life insurance proceeds from your estate.

Bypass Trust

A bypass trust is for married couples who believe they may have assets that will exceed the federal or Maryland estate tax  exemption. Establishing a bypass trust divides assets into two separate trusts, allowing you to take advantage of higher exemptions.

Cascading trust for grandchildren

Creating a cascading trust for your children and grandchildren allows for your assets to be passed along to your children and grandchildren and not to be subject to martial property if your spouse remarries.

Standalone retirement trust

If you have substantial assets in your retirement account, creating a standalone retirement trust can prevent your beneficiaries from receiving a lump sum payment, which may not be to their advantage in terms of spending decisions or tax consequences.

 

Planning process for trusts

In addition to the steps outlined in our estate planning process, we will need additional information about your bank accounts and property in order to update beneficiaries and deeds. The additional work for trusts will require at least one extra follow up appointment.

Do you need trust? ▸

 
 

You might want a revocable trust if:

  • You own real estate in more than one state.

    By having a trust, you will avoid your heirs having to deal with probate in multiple states by mail or in person.

  • You want your assets and will to remain private.

    In probate, all your assets and will provisions are open to anyone who decides to request a copy from the Register of Wills Office for a minor fee.

  • In the event your spouse remarries after your death, you can create a trust so that your children will still receive your assets.

  • You want to provide asset protection for the money left to your spouse.

    The assets that you place in trust cannot be reached by creditors. In addition, the trust is not considered a part of a subsequent marriage in the event your spouse remarries and divorces.

  • You want to provide a means for a professional to manage the money you leave to your family.

    A professional trustee or trust company can pay bills and invest your assets, so your loved ones are taken care of.

  • You want a backup trustee to step into your shoes and manage your trust assets in the event you become disabled.

    This can be particularly helpful for widowed or single people. We file the trust with your bank or brokerage account before anything happens to you, so that there is a clear and legally-sound record that you want the designated person managing your assets.

  • You expect that all your assets will be worth $5,000,000 or more at the time of your death.

    At that level of cost and complexity, it is worth avoiding the government supervision of probate.

  • As a married couple, you want to use two estate tax exemptions, instead of one.

    Maryland tax is 16% on assets exceeding $5 million. The Federal Estate tax is now 40% on assets exceeding $11.4 million in 2019. If your assets exceed these amounts and you create a family trust, you can use one exemption upon the death of the first spouse, and use another exemption when the following spouse dies. In this case, up to $10 million in assets could be exempt from Maryland in taxes, instead of $5 million.