A trust, like a corporation, is an entity that exists only on paper but is legally capable of owning property. A real person must actually be in charge of the property; that person is called the trustee. You can be the trustee of your own living trust, keeping full control over all property legally owned by the trust.
A trust is a legal entity created by a grantor for the benefit of designated beneficiaries. The trust must be set up under the laws of Maryland with a valid trust document. A trust can be created for any purpose which is not illegal. A trust is a fiduciary relationship with respect to property, subjecting the person who is holding the title to property to duties to deal with the property for the benefit of another person.
Trusts are frequently utilized as part of the overall estate plan in order to meet an individuals tax and personal planning objectives. Trusts are generally used to provide greater flexibility in terms of management of assets, protection of beneficiaries from themselves, etc. Trusts can also be used to transfer ownership of a family business to the younger generation at a reduced state tax cost. There are many types of trusts, only after analysis of your situation can an appropriate trust be set up for your needs.
Marital Deduction Trust: A trust that is created at your death designed to take full advantage of the marital deduction provisions in the Internal revenue Code.
Estate Trust: A trust for all or part of the income of which is to be accumulated during the surviving spouse's life, with the accumulated income being paid to the estate of the surviving spouse at death. This type of trust is commonly used to qualify property for the marital deduction.
Living Trust: A living trust is simply a trust you create while you're alive, rather than one that is created at your death under the terms of your will. All living trusts are designed to avoid probate. Some also help you save on death taxes, and others let you set up long-term property management.
Property you transfer into a living trust before your death doesn't go through probate. The successor trustee- the person you appointed to handle the trust after your death- simply transfers ownership to the beneficiaries you named in the trust. When the property has all been transferred to the beneficiaries, the living trust ceases to exist.
Even if you make a living trust, you still need a will, because a will directs disposition of property you have not transferred to your living trust.
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