Woburn Trust Attorney

Managing Your Assets to Protect Your Future

Trusts play a vital role in estate plans, and the talented team at the Heritage Law Center in eastern Massachusetts is ready to create a wide array of trusts to serve important purposes for you and your family. A trust holds legal title to property for the benefit of another person (“beneficiary”). The person who creates the trust (“the grantor”) chooses a manager (sometimes themselves), known as the trustee, to manage the assets in order to protect them. Think of it like a box where you can hold your assets for your benefit during your lifetime and thereafter for the benefit of another person.

The trustee has a fiduciary responsibility as they’re required to act legally and ethically in the best interest of the grantor and the beneficiaries. A trust can be used to distribute property before death, at death, or afterward.

If you would like to learn more about trusts and whether they’re right for you, don’t hesitate to reach out. Contact the Heritage Law Center at (617) 765-9307 to talk to an experienced member of our team today.

Reasons for Creating a Trust

Though no two clients have identical estates, our trust attorney uses their knowledge of federal and state law to craft estate plans that will be most helpful in your particular circumstances. Our law office will clarify the various ways in which certain trusts provide security and flexibility as you prepare to achieve your financial and familial goals. Well-drafted trusts are designed to meet one or more of the following objectives:

• Avoid probate
• Protection from excessive taxation
• Privacy maintenance
• Provision for family members with special needs
• Provisions for minor children
• Protection of loved ones who are unable to manage money

The Heritage Law Center is dedicated to serving Woburn and the surrounding areas. We’ll work with you to protect your assets as we help you plan for the future. Matthew Karr, Esq., is a knowledgeable trust lawyer who will discuss your trust options and clarify the benefits of each so you can make well-informed decisions regarding potential legal issues.

Two Basic Types of Trusts

There are two basic types of trusts: revocable and irrevocable. Revocable trusts may be altered during your lifetime, while irrevocable trusts, once created, can’t be changed. Both may be a “living trust” since they become effective during your lifetime.

Revocable trusts provide the advantage of flexibility; they remain part of your estate and can be taxed. When you die, a revocable trust becomes irrevocable, so assets will be passed on to your beneficiaries. The major advantages are that these documents: [1] avoid probate, saving you both time and money; [2] preserve your privacy since, unlike wills, trusts aren’t public documents; and [3] set up a plan to handle your assets and income if you become incapacitated.

Irrevocable trusts can’t be changed or dissolved after they’re created. Irrevocable trusts are less flexible than revocable trusts, but they provide greater protection for the assets in them. The protection is due to the fact that, technically, the assets in the irrevocable trust don’t belong to you anymore; they belong to the trust. The advantages of these trusts are that they [1] protect assets from MassHealth as long as they’re placed in the trust prior to the five-year look-back period, [2] provide protection from lawsuits, and [3] reduce estate taxes (contents of certain types of irrevocable trusts aren’t taxed when you pass away).

Our Trust Attorney Can Also Help Create These Types of Trusts

Testamentary trusts are included in wills. They don’t go into effect until you die, making them irrevocable. They can hold accumulated assets as well as funds that will only be available for distribution after your death, for example, proceeds from a life insurance policy.

Trusts for minors allow certain amounts to be dispensed by the trustee to the child during childhood, but others permit no dispersal until the minor reaches the age of maturity. These documents may also be created to allow the minor to access funds at certain ages or when a pre-established goal is met; for instance, a college graduation. Funds in such a trust can also be protected from being split with a divorcing spouse.

Special needs trusts are designed for families that have at least one member whose physical, cognitive, or psychiatric disability prevents that person from managing money but for whom economic resources must be provided. By creating a special needs trust, the funds are made available to the relative through the trustee. However, since the money isn’t legally under the disabled person’s ownership, the funds won’t make the individual ineligible for MassHealth or other government benefits.

Spendthrift trusts are created for families that include members who have a history of irresponsible behavior and poor choices. Such relatives may have lifestyle issues that may include alcohol, drugs, or gambling that make it foolish to give them large amounts of money. A spendthrift trust with a well-grounded trustee at the helm will make certain the individual in question has their needs met but is protected from squandering a sizable inheritance.

Charitable trusts allow you to give money to charity. You can choose between a charitable lead trust or a charitable remainder trust. Each has advantages, and both accomplish dual purposes: funding the chosen charity generously and benefiting the family by lowering taxes and generating income. As a charitable planning attorney, Matthew Karr, Esq., will work with you to create a plan that combines philanthropic, financial, and tax savings goals.

Credit shelter trusts (“bypass trusts”) permit spouses to combine their exemptions. When one spouse dies, their assets are transferred to an irrevocable trust rather than going directly to the surviving spouse. In some cases, the latter will receive income generated by the trust. This arrangement saves the heirs a possibly large estate tax when the second spouse dies.

Qualified terminable interest property (QTIP) Trusts make spouses eligible for an unlimited marital deduction. This means that no estate taxes will have to be paid by the surviving spouse. The QTIP also benefits successor beneficiaries who can receive untaxed assets when the second spouse dies.

Qualified personal residence trusts (QPRTs) allow you to give your primary beneficiary your house as a gift, paying a low gift tax rate, while you continue to live in your home during your lifetime. A QPRT also avoids estate tax.

Pet trusts provide peace of mind that your beloved pets will be well-tended if they become incapacitated or you predecease the animal that is such an important part of your life.

Irrevocable gift trusts allow you to retain some control of your assets while gifting them to someone else during your lifetime. Your trust account will be managed by your chosen trustee, which could be a spouse, sibling, adult child, or close friend.

Stand-alone retirement trusts name a beneficiary of your retirement account to ensure that when you pass away, your IRA or 401k funds will be protected from creditors, lawsuits, or bankruptcy proceedings.

As a trust administration attorney, Matthew Karr, Esq., routinely advises trustees and works with them to ensure trusts are being administered properly since they have a legal responsibility to act in the best interest of the beneficiaries. He also acts as a trustee for clients upon their request.

What Does a Trustee Do?

When creating your trust, you’ll assign someone to be the trustee. The trustee essentially manages the trust, maintaining all assets and property within the trust itself. For some trusts, you can assign yourself as the trustee; for others, you must pick a third party. Trustees can be individuals or entities, like a corporation or bank.

Trustees are generally responsible for the following:

• Assuming legal responsibility for administering the trust
• Managing and investing trust assets
• Controlling and protecting trust assets
• Filing trust tax returns
• Reporting about the trust to beneficiaries
• Handling accounting responsibilities of the trust
• Managing the tax standing and any tax issues of the trust
• Making income and principal distributions to beneficiaries
• Acting impartially to benefit all beneficiaries

Being named as a trustee can be an overwhelming experience, especially if you have never been one before. If you are a trustee and need legal assistance, our team can help. We can assist you with trust administration and all other duties so you can ensure you are fulfilling your trustee requirements.

How Do You Set Up a Trust?

Creating a trust is a complicated process that is made much easier with help from our legal team. The steps may vary depending on what kind of trust you choose and what kind of assets you’d like to include in it.

The general steps for creating a trust include:

• Determine what kind of trust fits your estate planning needs. Matthew Karr, Esq. will examine your financial situation along with your future goals to determine the type of trust that meets your unique estate planning goals.
• Choose trustees and successor trustees. You may decide to be the trustee of your trust. You will also need to name at least one successor trustee, a person you trust who can step in to manage your trust if you become incapacitated.
• Create a trust document. A trust document contains instructions for managing the trust and distributing assets to beneficiaries.
• Execute your documents by signing them and having them notarized. Revocable trusts don’t require notarization unless real estate is held in the trust, but we do recommend it. The grantor and trustee need to sign the trust.
• Transfer assets into the trust. You decide what assets you want in the trust and then retitle those assets in the name of the trust to fund it.

Free Estate Planning and Trust Reports

You can find more information about estate planning and elder law in our free reports: Estate Planning Essentials Report, Massachusetts Estate Planning: Saving on Taxes Report, and 7 Common Mistakes Parents Make When Selecting Guardians Report.

Contact Our Trust Attorney Serving Woburn Today

Our law office has our clients’ best interests at heart, and we know there’s only value in having a trust if it’s funded, which means transferring your assets into the trust. We work with a team of professionals who can assist you in funding your trust.

At the Heritage Law Center, we’re eager to help you get your future on track by making use of estate planning tools that will be effective and help you meet your goals. Don’t lose money or prevent your beneficiaries from inheriting all you want them to have. Our experienced trust lawyer will use his expertise in this practice area to guide you to make certain your trusts protect your assets and those you love. For more information, contact our law firm by calling (617) 765-9307 today.