What is the difference between a trust and a guardianship?
In Maryland, a trust and a guardianship are both legal instruments that are used to handle the affairs of an individual who is not capable of handling them themselves. However, there are some distinct differences between the two. A trust is a legal arrangement in which a person, the trustee, holds title to property for the benefit of another person, the beneficiary. The trust can be set up to provide financial security, or for tax or estate planning purposes. The trust is created by a written agreement that sets out the trustee’s powers and responsibilities, and outlines the rights and obligations of the beneficiary. A guardianship, on the other hand, is a legal relationship that is created when an adult is appointed by a court to care for the interests of a minor or an adult who is incapacitated. This may include the power to make decisions about the minor or incapacitated adult’s money, property, housing, medical care, and other matters. The guardian is typically responsible for providing care and protection for the ward and for managing their financial affairs. In summary, a trust is an arrangement created to provide for the financial wellbeing of an individual, while a guardianship is a legal relationship created to protect and care for an individual who is unable to care for themselves.
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