It isn’t only rich people that can benefit from using trusts. As an estate planning tool, they can be useful to anyone in Massachusetts with assets such as real estate, life insurance policies, retirement accounts and any other assets that will eventually passed on to heirs. A living revocable trust can be drafted and executed to keep those assets out of probate, reduce tax liability and otherwise protect the assets.
One of the primary advantages of a living revocable trust is the fact that the trust’s creator can be both the trustee and beneficiary of the trust as long as he or she is alive. Another benefit is that the grantor can change the trust at any time during life. Once that person dies, however, the trust can no longer be changed.
A trust is considered a legal entity that can have assets added to it and taken away among other things. The provisions of a trust will dictate how it is administered, when assets can be distributed, to whom they are to be distributed and how. The creator of the trust will also have to pick a trustee who will be in charge of making sure that these things are done.
Each living revocable trust is as unique as the person creating it. In order to make sure that it serves the purposes for which it was created, it may be necessary to have it drafted by a professional. Otherwise, the document could potentially fail to stand up to the scrutiny of the courts, as well as Massachusetts and federal tax authorities.
Source: Fox Business, Is a Trust Right for You?, Libby Kane, Oct. 25, 2013