At Surprenant & Beneski, PC, our lawyers have an in-depth understanding of all of the different types of trusts in Massachusetts. Today, more individuals are using irrevocable trusts and revocable trusts as part of their Massachusetts estate plans. Once thought of as an estate planning tool that only the very wealthy could use, trusts are now a standard part of estate planning for people of all different income levels.
Our Massachusetts Trust Administration Lawyers Can Help
Understanding the difference between a revocable and irrevocable trust is essential for those engaged in estate planning. At Surprenant & Beneski, PC, we take our responsibility of helping our clients create thorough estate planning seriously. After reviewing all of the facts in our clients’ cases, we learn about their unique needs and goals. We can advise you as to whether or not an irrevocable trust or a revocable trust may suit your goals. Once we decide on a strategy, we will draft a thorough trust agreement that protects your best interests. Contact our Southeastern Massachusetts law firm as soon as possible to schedule your initial consultation.
What Are the Elements of a Trust in Massachusetts?
Every trust, whether revocable or irrevocable, must have four elements. The first element is the trust maker. The creator of the trust is called the grantor. Next, the trustee is the person who manages the trust and enforces the provisions of the trust agreement. The grantor can also act as the trustee, or trustees can be a third-party or an institutional trustee such as a banking professional or a lawyer. Beneficiaries are the people who will benefit from the assets owned by the trust. In many cases, when the trust creator passes away, the children become the beneficiaries of the trust.
Both revocable and irrevocable trusts offer grantors the ability to protect their assets from going through probate. Both types of trusts will help you avoid costly attorney’s fees and court fees. By using a trust, your assets will not become tied up in probate court. Instead, your trustees will be able to access the assets and distribute them to those you’ve left them according to the trust agreement. Trusts also allow information regarding your assets and beneficiaries to remain private by staying out of the probate court.
Revocable Trusts in Massachusetts
Trust makers can create trust in different configurations: revocable, irrevocable, testamentary, and living trusts. The creator of a revocable trust can amend the trust, add to the trust, or even revoke the trust during the grantor’s lifetime. After the grantor passes away, the trust usually becomes irrevocable.
The benefit of a revocable trust is that the grantor retains the ability to control the assets in the trust. You can even choose to stop the trust or revoke it entirely. When life circumstances change, you may need to amend or change your trust. For example, if you remarry, you may want to add your step-children as beneficiaries to the trust. Or, you may decide that you no longer want your assets under the ownership of the trust. As life circumstances change, having the flexibility to amend the trust can be incredibly beneficial.
Revocable trusts do come with some disadvantages. Mainly, revocable trusts will not protect your assets from certain creditors. If your goal is to protect your assets from long-term care spending, an irrevocable trust may be a better option. For example, if you need to apply for MassHealth Medicaid benefits, the government will make you access assets in a revocable trust to pay for your care. You will qualify for MassHealth benefits only when you have spent almost all of your personal assets.
Irrevocable Trusts in Massachusetts
Grantors cannot change irrevocable trusts after their creation. The primary purpose of creating irrevocable trusts is to fund generational legacies for children and grandchildren. Irrevocable trusts often protect life insurance policies or gift properties. Grantors cannot dissolve or change an irrevocable trust after creating the trust. However, creators of irrevocable trusts still retain some control over their assets. For example, if you choose a trustee who is a close friend or family member, the trustee will be able to access assets placed in the irrevocable trust.
While irrevocable trusts do not allow grantors as much flexibility as with revocable trusts, they generally are more secure when it comes to asset protection. For example, as long as you transfer assets into an irrevocable trust before MassHealth’s five-year look-back period, you will be eligible for MassHealth. When creating an irrevocable trust, it is essential to choose trustees who you genuinely trust to make wise financial decisions on your behalf.
The Benefits of Using Trusts for Your Estate Planning
Creating a trust is often an essential part of creating a thorough estate plan. If you wish to avoid the probate process, a trust-based estate plan could be right for you and your loved ones. Well-structured trusts can help you minimize estate taxes and plan for possible incapacity. At Surprenant & Beneski, PC, our experienced estate planning lawyers can help you navigate the process of creating irrevocable and revocable trusts. If you are a resident of Southeastern Massachusetts and you’re interested in creating an estate plan, we can help. Our law firm offers clients three convenient locations in New Bedford, Easton, and Hyannis. Contact us today to schedule your initial consultation.