Written by Attorney Daniel M. Surprenant, Esq, CELA, Managing Partner
We know the pride and joy homeowners feel when passing down their treasured properties. But what if the transfer process could be smoother, more secure, and less stressful for everyone involved? Enter the trust, a legal tool that can be a game-changer for your clients, especially those in their golden years.
Let me, your friendly neighborhood elder law attorney, shed some light on how trusts can be of great benefit.
- Bypassing the Probate Maze: Say goodbye to the time-consuming and expensive probate process. Probate in Massachusetts typically takes about 1.5 years, involves several steps, is public and costs typically at least $5,000 or more. One advantage of a trust, properly used and funded, is that it will bypass probate entirely. This translates to faster inheritance for your loved ones, lower legal fees, and less emotional strain during an already difficult time.
- Tailor-Made to Keep it in the Family: Unlike a will which only works in probate and gives assets outright, giving assets in trust can allow for layer of beneficiaries. For example, if your child passes even after you, many parents want that share go to grandchildren, rather than to the surviving spouse/in-law. If there are no grandchildren, maybe the inheritance passes to your other children, or charity, etc. The trust can also protect from your child’s potential divorce. You can structure the trust to distribute the property at specific times, under certain conditions, or even in stages, ensuring the future of the property aligns with your wishes and the needs of your loved ones.
- Disability Protection: Life is unpredictable and illness or disability can impact our ability to manage our affairs. If a child or grandchild is or becomes disabled, a trust can allow a trustee that you designate to step in and manage the assets for the benefit of your loved one. This can allow for example a piece of real estate to be non-countable for any government benefits the child may be entitled to, while staying out of probate court.
- Asset Protection: Worried about potential creditors or long-term care costs? Nursing home care costs average roughly $14,000 per month, or $168,000 per year in Massachusetts. If drafted properly, certain types of trusts, like a Medicaid asset protection trust, will protect any property that you place in that trust, after 5 years. This planning should be done 5 years before you think you will need care.
- Privacy Perks: Unlike wills, trusts are private documents. This means your wishes regarding your property remain confidential, avoiding potential family disputes and unwanted public scrutiny. In most cases, the trust is not recorded anywhere.
- Tax Advantages: For married couples with estates greater than $2 million, a trust can save significant estate tax. For example, revocable trust planning for a couple’s estate worth $4 million in Massachusetts will save the family roughly $200,000 in tax. The trust can protect real estate from having to be liquidated to pay the estate tax and preserve wealth for future generations.
- A trust can hold an heirloom property for the use and enjoyment of your children and grandchildren. For instance, that Cape house that everyone loves can be held in trust for all to enjoy, allowing for equal use by your children and their families, with maybe a maintenance kitty to help pay the ongoing expenses. This can be done in lots of ways, but can keep that prized family destination for generations, protecting it from your kids’ creditors and probate in the process.
Real estate is often a family’s most valuable asset. By utilizing trusts, you can be empowered to make informed decisions about its future, protecting your loved ones and ensuring a smooth transition. It’s an investment in your family’s future and security.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult with a qualified elder law attorney for personalized guidance regarding trust planning options in Massachusetts.