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A Special Advertising Section of Baltimore Sun Media Group | Wednesday, September 24, 2025 19
ing a will, one should create a revocable
living trust. Could you tell me about this?
BC: Trusts help control how and when
funds are used. The trust is a legal document whereby an individual empowers a
third party to see through the terms of the
trust on behalf of a beneficiary. There are
three participants:
• The settler/grantor: the person
putting assets into the trust.
• The trustee: the person overseeing
the trust on behalf of the beneficiary.
• And the beneficiary.
There are a wide variety of trusts, which
should be tailored to you and your family’s
specific needs. With regard to a will or
revocable trust, there are advantages to
each and instead of either or, for many
people, there is a benefit to having both.
Unlike a will, the revocable trust allows
more privacy and avoids the probate process. This type of trust can be altered,
amended, or revoked at any time during
the grantor’s lifetime. By contrast, a will
benefits from being simpler and can name
guardians for minor children.
Other types of trusts are irrevocable,
which are created largely for protection
and control. Unlike a revocable trust, the
terms cannot be changed by the grantor.
Irrevocable trusts can be written to protect the beneficiary from themselves, from
creditors or those who could potentially
sue the beneficiary. It can also protect
the recipient from taxes. The trust creator
transfers a large sum of money today into
an irrevocable trust, and it would not be
considered as part of the grantor’s estate
for tax purposes.
There are a wide variety of trusts and
legal language. The trust should be tailored to you and your family’s specific
needs and involve an estate attorney and
a financial planner. It is imperative that this
has no adverse effects on other aspects of
the financial picture. For example, making
a large gift to reduce estate taxes may be
beneficial from a tax perspective, but too
large of a gift could impede lifestyle spending or cause a sustainability issue.
MBW: If a person doesn’t want to create
a trust, are wills still used?
BC: Absolutely, and typically it is not
one or the other but both. Wills and beneficiary designations are in place so you
can leave assets to those you want to
have them. With beneficiary designations,
you can name them directly on accounts
you have, such as IRAs, life insurance,
or investment accounts. You can draft a
will and not realize that some assets are
given to designees by contract through
beneficiary designations. Therefore, it
is important to review all documents to
ensure they align. This is critical when you
have life changing events, in which case
you should update major beneficiaries
and documents. A good rule of thumb is
to check these items every three years or
upon any significant life change in the family: death, divorce, marriage, birth. Make
sure your plan reflects your current wishes.
I would urge everyone to meet with
a financial planner to better understand
these concepts. There are many nuances,
and it is important to understand how they
may impact you and your family. Most of
what I’ve talked about are things a financial
planner can assist you with. Or, they can
work together with your trust and estate
attorney to ensure your estate plan, wills
and designations meet your unique needs.
I think there are many reasons to have
a will, even with revocable trusts and
beneficiaries designated. Wills dictate the
passing of personal property, real estate
and any other asset without a beneficiary
designation. Beneficiary designations exist
on most of your financial accounts. Just
go to your profile for your account. There
is usually a section to name beneficiaries,
and you can have more than one. Even
if you name only one person, you should
have a second person as a contingency.
Final thoughts
As Crockett and I wrapped up, we talked about estate planning and how people
are reluctant to write their wills.
“You know,” he said, “everyone already
has an estate plan whether you like it
or not. Either you plan it, or the State of
Maryland decides for you. In my experience, most prefer to make these decisions
for themselves.”
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