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Posted by Muriel Tinkler | Apr 01, 2020 | 0 Comments

If you are thinking of estate planning, then maybe you should be thinking of a trust as part of that plan. Trusts are unique and very useful to just about everyone involved. What's more, there's a type of trust to suit just about any need. Here's an overview of trust options in Maryland.


A trust consists of three parties: the grantor (also called truster), the trustee, and the beneficiary. The grantor grants the trustee control over specific assets. The trustee manages the trust according to the terms and conditions of the trust agreement. The beneficiary is the one who receives the benefits of the trust. But that's what a trust arrangement is in so many words.

What a trust actually does is manifold:

  • A trust helps keep property and assets out of probate. This is a particularly useful benefit for heirs because they don't have to wait to receive the trust – plus they forego the expense of probate.
  • A trust protects your privacy even after death. You may have a lot of assets and overall wealth, but you may not want the world to have access to what that is. Probate is public record but a trust keeps your assets private.
  • A trust saves you money today, not just for your loved ones tomorrow. The property to be distributed to a beneficiary is taxed differently and/or is eligible for a deduction.
  • A trust helps you protect your assets from third-party creditors. Any property or assets in your trust cannot be targeted in a lawsuit.
  • A trust allows you to name a successor trustee who would manage the trust in the event you die or if you become incapacitated.


Now that you know what trusts do for you, what types of trusts are available to you in Maryland? Some common types of trusts are listed below.

  • Credit-shelter trust. Also known as a bypass or family trust, the credit-shelter trust allows you to pass your estate on to your spouse tax-free to the extent the law allows. Your spouse can do the same, and in this manner, you can double the amount of inheritance to your children that is shielded from estate taxes.
  • Generation-skipping trust. Known as a dynasty trust, the generation-skipping trust allows you to transfer tax-free a substantial part of your inheritance to grandchildren (or to beneficiaries at least two generations your junior).
  • Special needs trust. A special needs trust is set up for a loved one who receives government benefits – this trust makes sure the loved one isn't disqualified from government benefits. To note, an inheritance or a gift could reduce or disqualify someone.
  • Charitable trust. Charitable trusts are trusts that allow you to lower estate and gift taxes while also benefit a charity of your choice.
  • Qualified terminable interest property trust (QTIP). QTIPs are utilized by persons who have a modern family – there's been divorces, remarriages, and stepchildren. This trust allows the surviving spouse to receive income and upon the spouse's death, the beneficiaries receive the principal or remainder.
  • Irrevocable life insurance trust (ILIT). An ILIT removes life insurance policies from a taxable estate, at which time you no longer have rights tot he life insurance policy and can no longer borrow against it or change the beneficiaries. The benefit of an ILIT is the life insurance policy is no longer taxed, it helps pay estate costs upon your death, and provides cash to your heirs rather quickly while other assets may be held up.

These above-described trusts are a select few of the possibilities you have in trusts. Speaking with an estates and trust attorney in Baltimore is your best means for identifying the trust most aligned with your needs and goals.

About the Author

Muriel Tinkler

ATTORNEY & OWNER Muriel Tinkler, Esq. helps clients deal with some of life's most stressful situations related to aging, caring for yourself and ensuring the care of your family after you are gone. Muriel Tinkler has worked with children and families with special needs for many years.


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