A Massachusetts Revocable Living Trust is a powerful estate planning tool that offers many advantages over a traditional will. It allows individuals to manage and distribute their assets during their lifetime and better control the distribution of those assets after death. In this article, we will discuss the basics of a revocable living trust and why they are so popular.
A revocable living trust is a legal arrangement where the person creating the trust, referred to as the “grantor” or “settlor,” transfers their assets to a trust, but retains the right to change or revoke it at any time. The grantor acts as the trustee and beneficiary during their lifetime and retains control over the assets. This type of trust is referred to as “revocable” because the grantor can change the terms of the trust or revoke it entirely during their lifetime.
Creating a Revocable Living Trust
Creating a revocable living trust involves several important steps, including selecting a trustee, preparing a trust agreement, and transferring assets to the trust. This process can be complex depending on the asset. Therefore, it is important to work with an experienced Massachusetts trust attorney. A trust attorney can help the grantor understand the legal requirements for creating a trust, advise them about the most appropriate type of trust for their needs, create the trust agreement, and provide guidance about which assets to add to the trust and which assets to leave out. Putting the wrong type of asset in a trust, or leaving assets out, can each have unintended consequences.
Advantages of a Revocable Living Trust in MA
While there are many advantages to implementing a Massachusetts Revocable Living Trust as part of an estate plan, some of the most common are below:
- Avoids Probate: One of the biggest advantages of a revocable living trust is that it allows the grantor to avoid the time-consuming and often expensive probate process. Probate is the legal process of distributing a person’s assets after death. By creating a revocable living trust, the grantor can ensure that their assets are distributed quickly and efficiently without probate court intervention. Accordingly, more assets are available for the beneficiaries since court costs and legal fees do not consume them.
- Maintains Privacy: The trust keeps the grantor’s affairs private and out of the public court record. With a revocable living trust, the grantor can maintain privacy and keep their affairs confidential. This is not possible with a will which must go through Probate. Massachusetts Probate proceedings are a matter of public record, which means that anyone can access information about the grantor’s estate and the distribution of their assets.
- Quick Distribution of Assets: The trust allows for a quicker distribution of assets to beneficiaries since probate is not required. This can be especially important for beneficiaries who may need immediate access to funds, such as to pay bills, living expenses, or estate taxes.
- Control over Assets: The grantor retains control over their assets while they are alive and can change or revoke the trust at any time. This means that the grantor can make changes to the trust if their circumstances change, such as if they get married, have children, or experience a change in their financial situation. In addition, for tax purposes, the trust is a “grantor trust” which does not require obtaining a new tax id for the trust. The grantor’s social security number can be used for any accounts opened under the name of the trust.
- Estate Tax Savings: A revocable living trust can help to maximize federal and Massachusetts estate tax savings.
- Appoints a Successor Trustee: The grantor can appoint a successor trustee to effectively manage their assets if they become incapacitated. This is important for individuals who may become unable to manage their assets due to age, illness, or disability. The successor trustee can take over the management of the trust, ensuring that the grantor’s assets are protected and distributed according to their wishes.
In conclusion, a Massachusetts Revocable Living Trust is a powerful estate planning tool that can provide many advantages over a traditional will. It offers the grantor control over their assets, privacy, a quicker distribution of assets, and the ability to appoint a successor trustee. Working with an experienced attorney is important to ensure that the trust is properly set up and meets the grantor’s estate planning needs. Contact our Revocable Living Trust Attorneys today if we can help you with your estate planning needs.