Create a Living Trust in Massachusetts
Create a Living Trust in Massachusetts
A Massachusetts living trust allows you to keep your assets in a trust during your life and control their distribution after death. A revocable living trust, or inter vivos trust, is an estate planning option that can offer many benefits.
Living Trusts in Massachusetts
A living trust in Massachusetts is created by the grantor, the person putting things into trust. As the grantor you must choose a trustee who is charged with managing the trust for your benefit while you are alive and distributing your assets to your beneficiaries after your death. You may choose anyone, but it is common to name yourself, with a successor trustee in place for after your death. A revocable living trust can be changed or cancelled by you at any time during your life. An irrevocable living trust is unalterable once it is signed.
When a person leaves a will, that will must be probated, or approved and enacted by a court. This process takes many months and requires an executor and attorney, both of whom must be paid. There are also probate court fees. Assets cannot be disbursed until probate is concluded, requiring your heirs to wait quite a while. None of this is necessary when you leave your assets in a Massachusetts living trust. Assets in a trust do not go through probate. Beneficiaries can be paid at any time that the trust specifies, including immediately after your death. Keep in mind that Massachusetts law is based on the Uniform Probate Code, so its procedure can be relatively simple. In addition, if your estate is worth less than $25,000 it qualifies for a simplified probate procedure which will be less expensive than a trust.
Do I Need a Living Trust in Massachusetts?
When you create your living trust in Massachusetts, you gain the ability to control your assets during your life and after your death. While you are living, you live as you normally would. All the assets in your trust can be used, spent, or given away as you wish. After your death, your trustee manages the assets and distributes them to your beneficiaries according to the terms you have set up in the trust. You can choose exactly how and when the distributions happen – immediately or at later dates or events. If you use a will, it passes assets to heirs immediately after probate is completed. A living trust provides added protection since it is much harder to contest than a will.
A revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary for you to have your financial life managed for your benefit.
A living trust also allows you to maintain privacy for you and your family. The terms of the trust, assets, and beneficiaries are not made public, in contrast to a will which is filed with a court and becomes public.
Living Trusts and Estate Taxes in Massachusetts
Your living trust does not allow to avoid estate taxes. Massachusetts taxes estates worth more than $1 million and the federal government taxes those in excess of $5 million. You can get around this with a marital trust (also called an AB or QTIP trust) which transfers assets from one spouse directly to the surviving spouse.
How to Create a Living Trust in Massachusetts
Creating a living trust in Massachusetts occurs when you create a written trust document. You then sign this in front of notary. The trust is complete once you transfer assets into it. A living trust is an important option available as part of your estate plan. Consider the benefits and limitations and decide what works for you.
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