Massachusetts Trusts Attorney
A trust can be an extremely useful tool in the estate planning process. Trust administration encompasses the management of property by a named trustee, which is held for the benefit of the named beneficiaries. There many steps required to safeguard the administration of a trust, and the process should always be facilitated with the assistance of an experienced estate planning attorney. Trust administration usually begins with a notice to all beneficiaries and heirs. There are significant steps in between this first notification and the point where the beneficiaries receive their inheritance. Unfortunately, many people have unrealistic expectations regarding how their trust will work once they pass away.
They may believe that once a trust is set up, no further action is required, and everything will happen automatically upon their death. This is a common misconception; it is almost always necessary to solicit the assistance of an experienced Massachusetts estate planning attorney to ensure the trust is properly administered. Whether you have been named as Trustee and are attempting to administer the trust of a loved one, or you are considering setting up a trust as a part of your estate plan, Attorney James Miller can answer your questions and guide you through the process. This is definitely a task you will not want to attempt on your own—contact the Law Offices of James A. Miller, P.C., today.
How Do Massachusetts Trusts Function?
A trust is a written instrument in which one person (the Trustee) holds title to real estate for the benefit of other individuals (the Beneficiaries). When you establish a trust, you can then legally transfer real and personal property to loved ones upon your death, skipping the probate process entirely. You can think of it as forming a company in which you are the only employee and manager in the company. Your assets are now owned by the company, rather than by you, but you remain in control of the assets. Then, in the event of your death or incapacitation, you have named a successor trustee to take over and distribute your assets in the manner you have determined. Some of the primary reasons to consider a Massachusetts trust include:
- When you die, the contents of your trust are not public as are the contents of your will.
- Your estate can be settled in a matter of weeks rather than the months or years it can take to probate a will.
- You remain in full control of all your assets until your death or incapacitation.
- While a trust is more expensive to set up than a will, there are no probate costs to deal with, so the overall cost is less.
- You do not need a separate tax ID number and are not required to file a separate tax return.
- A trust is pretty low maintenance; you can make changes or amend the trust when you want to change beneficiaries, the successor trustee, or other details
- If you want to make certain gifts to individuals or organizations, a trust makes that an easy process.
- Estate taxes can be entirely eliminated or reduced.
- A trust is useful for placing property in prior to marriage, ensuring separate property stays separate and is not accidentally commingled.
What are the Different Types of Trusts?
While the most common type of trust is the revocable living trust, there are other types of trusts which could be useful for your particular situation. The different types of trusts in the state of Massachusetts include:
- Revocable Living Trust—As noted above, a Revocable Trust can be modified or terminated at any time during your life, without the permission of your beneficiaries, so long as you are mentally capable of making those changes.
- An Irrevocable Living Trust requires that you surrender your rights to the assets as soon as the trust is created. As the name implies, an Irrevocable Trust cannot be modified or terminated at any point during your lifetime, a Medicaid Irrevocable in certain circumstances, but it will require a conversation with your estate planning attorney. An Irrevocable Trust does bring protection from creditor claims, and significant tax benefits, but should be thoroughly discussed with your estate planning attorney to determine if an Irrevocable Trust is right for you.
- An Irrevocable Life Insurance Trust allows you to remove your life insurance from your estate, so the beneficiary is not required to pay any taxes that might have been placed on the life insurance policy through the estate.
- There are two types of Charitable Trusts; a Charitable Leads Trust allows you to choose certain charities which will receive interest from your gift for a set length of time, then when that time is up, whatever is leftover from the trust can be given to beneficiaries of your choice. A Charitable Remainder Trust allows you to receive the interest on the trust until the set length of time ends, then the charity will receive the asset in full.
- A Special Needs Trust is used when there is a loved one (usually a child or adult child) who has a disability and could benefit from the additional resources a supplemental needs trust provides, but you want to make sure his or her access to government benefits (Medicaid, SSI, etc.) is not compromised.
Do I Need a Trust and a Will?
While a trust can be a superior estate planning tool, you may also need a will for two very important reasons. Your living trust will only cover the property you have properly transferred to the trust. Since virtually no one transfers every single thing to a trust, it is important to have a will to take care of anything which was not transferred. You can use a simple will, known as a “pour-over” will because it directs any property not contained in the trust to pour over into the trust—but the property must still go through probate on its way to the trust.
The second reason is a big one if you have minor children. You cannot name a guardian for your children in a trust. Since you absolutely need to have a named guardian for minor children, you also need a will to go along with your trust. A will and a trust can also be used to forgive or cancel debts owed to you (perhaps by family members) upon your death.
How the Law Offices of James A. Miller, P.C. Can Help With Trust Administration Issues
If you are considering a trust as a part of your estate plan, it is important that you discuss the matter with an experienced estate planning attorney from the Law Offices of James A. Miller, P.C. Attorney James Miller has the knowledge required to guide you through the estate planning process, helping you choose the type of trust which best suits your individual needs, and ensuring your estate is distributed according to your wishes. James can also help those who have been named as successor trustee for a loved one and are unsure how to proceed. Contact the Law Offices of James A. Miller, P.C., today for a comprehensive consultation.