Trusts and estates are effective documents for planning things in advance. Both trusts and estates also allow for the development of very specific terms and conditions. A trust is a separate legal entity with its own unique set of instructions for asset management and use and a trustee (or trustees) that are bound to follow this set of instructions. Trusts are very useful in situations where one wants a loved one to receive the benefit of property passed on death, but when that person no longer needs the funds (i.e. death or remarriage), the property then reverts to other intended beneficiaries.

The classic example of a marital trust is where a husband and wife are in their second marriages, each with a set of their own children. Each spouse can set up a marital trust to care for the surviving spouse while alive, but revert back to his or her own natural children upon the remarriage or death of the surviving spouse. It is in this fashion that the assets do not go to the surviving spouses children instead of the decedent’s children. Trusts are also used in advanced planning in the event one’s estate is expected to have either Federal or Maryland estate tax liability. Trusts may also be used in the context of elderly parents, where funds may be preserved and protected against nursing home expenses.