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Maryland Living Trust Forms – Irrevocable & Revocable

The Maryland living trust forms are documents that allow a Grantor to transfer ownership of their assets to an entity to ensure their security until the time of the Grantor’s death. After the Grantor’s death, the Trust’s assets will not be subject to the public probate process but will instead be given immediately to the Beneficiaries. The Grantor may elect to be their own Trustee (manager of the trust) and retain full control over their assets during their lifetime (Revocable Trust only). As a result of creating a Revocable Trust, the Grantor may continue to benefit from any income that his/her assets generate. This also means that the Grantor will be liable to pay tax on any property or assets transferred to the entity. The alternative to this scenario would be an Irrevocable Trust which offers the Grantor tax protection but transfers ownership completely to the trust and does not enable the Grantor to act as Trustee.

LawsTitle 14, Subtitle 4 (Maryland Discretionary Trust Act)

Will (Last Will and Testament) – Used to delegate all property not placed in a trust. All assets described in a Will are subject to probate after death.

Types

Irrevocable Living Trust – Once created, an Irrevocable Trust may not be modified by the Grantor. Ownership of all assets is transferred to the name of the trust and therefore removes liability on the Grantor’s part to pay tax on their previously owned property.

Revocable Living Trust – The Grantor may make modifications to a Revocable Trust, such as naming new Beneficiaries or terminating the document entirely. This trust type permits the Grantor the act as their own Trustee.

Individual Roles

A Living Trust operates with four (4) major roles:

Grantor (or “Settlor”) – Person who creates the trust and the original owner of all assets and property.

Trustee – Nominated by the Grantor to manage the Trust. If the trust is Revocable, the Grantor may also be the Trustee.

Successor Trustee – Individual who assumes control of the Trust in the event that the initial Trustee is unable to do so.

Beneficiaries – Person(s) inheriting the assets and property designated to the trust.

How to Make a Living Trust in Maryland

An individual may create a living trust in accordance with § 14-404 of the Maryland code. This statute states that the following is required:

  • Legally Transferring Property – All assets must be transferred to the ownership of the trust.*
  • Identifying a Beneficiary – The individual(s) who will take possession of the property after the Grantor has died.
  • Identifying a Trustee – The individual who will be the title holder throughout the duration of the trust’s existence.

After the above needs are met, the form can be completed and signed in a “legally recognized manner” which is not defined but it is recommended that the trust be notarized. Afterwards, the form does not have to be registered and should be kept by the Trustee until the death of the Grantor or until amendments need to be implemented.

*Here are some important things to keep in mind when transferring property to the trust:

Motor Vehicles – The title must be transferred to the name of the trust and registered with Motor Vehicle Administration Office. It is also recommended to complete a Maryland Bill of Sale to show proof of the ownership transfer.

Real Estate – A Maryland Deed is required when placing real estate in a trust. Have the deed and a Land Intake Sheet filed with the Clerk at the Circuit Court in the area where the property is located.

Websites – The administration details which have been registered with ICANN (WHOIS) must be modified to show the change of ownership. Do this by contacting your domain provider and disclosing the new ownership information.

Do I Need a Living Trust?

The necessity of a living trust depends on each individual’s unique financial situation. If a person’s intention is to bypass probate, there is no other way to do this unless the gross value of their property and assets qualifies as a small estate. In Maryland, Heirs may file a Small Estate Affidavit after the death of an individual only if the estate is valued at less than $50,000 ($100,000 if the spouse is the only Heir). However, under a small estate, the property gets spread evenly across all qualifying descendants.

To conclude, if an individual has more than $50,000 or would like to specify the distribution of their estate, and they’d like to avoid probate, a living trust is the only option.

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