Trusts are very flexible devices that are used for a number of reasons: to protect minor children, to protect a loved one with special needs, to protect the assets of a person, to save estate taxes. Trusts can be part of a Will, which is often the case for minor children, or they can be independent documents. They can be funded during your lifetime or at the time of your death. A Trust can be revocable, meaning you can amend or revoke it at any time, often called a Living Trust, or, they can be Irrevocable.

Please note: If you are thinking of using a Trust to save estate taxes, in 2007 the Federal Unified Tax Credit is two million dollars ($2,000,000) increasing in 2009 to three million five hundred thousand dollars ($3,500,000) and returning to one million in 2011. The Massachusetts limit is one million dollars ($1,000,000) so the value of your estate would have to be higher than those limits for a Trust to save you estate taxes.

We are often asked about the use of Trusts to avoid Probate. A Trust would be effective for this purpose but you would need to weigh the cost of drawing and administering the trust vs the cost of Probate. Sometimes there are other ways to achieve the same objective but at a lower cost. However, a Trust to avoid Probate would be recommended if you were concerned that a family member might contest your Will.

A Trust also protects your privacy. A Will filed in Probate Court is a public document that can be read by anyone, in addition, your next of kin must receive notice of the Probate whether they are listed in your Will or not. A Trust is a private document, only beneficiaries listed in the Trust will receive a notice.

Trusts are especially important if you have a loved one with special needs or a family member receiving government assistance such as MassHealth. A Special Needs Trust can be set up so your loved one can still get their inheritance without jeopardizing their government assistance.

To draw a trust, you need to decide the purpose of your Trust, such as to save estate taxes, protect minor children, protect a loved one with special needs, etc.; decide the terms of your Trust, who gets the assets and when; what will fund the trust, life insurance, real estate, etc; and who will be your Trustee.

If you would like to discuss whether a Trust is right for you, contact us for a convenient appointment.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

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