A revocable trust is a common type of trust that people create, but many people have misconceptions about exactly what this trust is going to be able to do for them. You don’t want to create a revocable living trust and expect it to provide protections for your assets or your family when it doesn’t actually give you those protections you planned on. As a result, you need to know the benefits and the limitations of this trust type.
The Law Offices of James A. Miller, P.C. can help you to determine if you should create a trust and can guide you through the trust creation process. Our legal team knows the ins-and-outs of trust law in Massachusetts and we will work with you to create a legally valid trust if such a trust should be a part of your estate plan. Give us a call to find out how our legal team can assist you with trust creation and to get started on using the best legal tools to achieve your asset protection and estate planning goals.
Top Myths about a Revocable Trust
Because many people assume all trusts are the same, and because many people do not fully understand trust laws, people commonly believe that a revocable trust will do things that it cannot do. Some of the top myths about revocable trusts include the following:
- Myth: a revocable trust will help you to avoid estate tax: Unfortunately, a revocable trust does not actually help you to reduce the value of your taxable estate. While assets held within a revocable living trust can pass outside of probate and transfer to heirs or beneficiaries more quickly than if the assets had to transfer through the probate process, the assets are still typically considered to be a part of your taxable estate. That means if you’re going to potentially owe estate tax and you want to reduce or avoid these taxes, you’ll need to select another kind of trust.
- Myth: a revocable trust will help you to protect assets from creditors or nursing home costs: A revocable trust is not going to put your wealth outside of the reach of creditors. Assets held within a revocable living trust are also still typically going to count as resources when a decision is made on whether you can qualify for means-tested Medicaid benefits. This is important because you may need Medicaid to pay for a nursing home since Medicare and private policies typically won’t pay for nursing care unless you need skilled care for only a brief time.
You don’t want to make decisions about your estate planning based on misconceptions or mistaken information you may have received. To ensure you are choosing the right estate planning tools, you should work with an experienced attorney who knows the laws on wills and trusts and who can offer you comprehensive guidance on what kind of trust is right for you.
Should you Create a Revocable Trust?
Whether or not you should create a revocable trust is going to depend upon what your estate planning goals are and what your asset protection goals are. If you are primarily concerned about avoiding probate and ensuring you can name a trusted person to manage certain assets in case of incapacity, then a revocable trust may be right for you.
However, if you want more protection from creditors or want to ensure that Medicaid can pay for your nursing home care without requiring you to spend down assets if you must go into a home, then you may be better off selecting an irrevocable trust instead of a revocable one.
The Law Offices of James A. Miller, P.C. will discuss your estate planning and asset protection goals to assist you in determining which trust option is the best one for you.
Getting Help from A Worcester Trust Lawyer
Trust law can be very complicated and there is no room for mistakes. The Law Offices of James A. Miller, P.C. knows the ins-and-outs of trust creation and can guide you through all steps in the process of creating a trust. From deciding if you need a trust to selecting the right trust type to preparing your trust document, our legal team will offer you the advice and assistance you need to make the right choices.
To learn more about how our legal team can assist you and to find out more about how trusts fit in with a comprehensive estate plan, join us for a free seminar. You can also give us a call at 866-370-3888 or contact us online to get personalized advice and help with creating a trust that is right for you. Call now to get started.
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