Many people think that once they create a will, they have done everything they need in order to ensure their legacy passes on according to their wishes. Unfortunately, a will may not protect your final wishes as much as you would like. In order to protect the wealth you have built for the next generation, it is time to consider creating a trust.
When you are working on creating a solid estate plan, it is important to remember that a trust can be one of the most powerful tools available. While a will may divide your estate into percentages for your beneficiaries, a trust provides very specific instructions to distribute a portion of your wealth to them. It can go so far as to dictate the timing and frequency of distributions to each person you name in the trust. Read further to find out more about the benefits of creating a trust in Massachusetts.
Efficient and private
One of the best aspects of a trust is that it allows you skip the probate process. If you use a will to transfer your property to your loved ones, they will have to wait for the probate court to complete its process before they have full access to the assets you left to them. The probate process can often be lengthy and complicated. In addition, it is a public process.
Reduces estate taxes for your spouse
If you create a revocable trust, it can go on to fund a family trust at the time of your death, so long as it does not exceed your state or federal estate tax exclusion. Once the transfer is made, those assets can increase and will not be subject to additional estate taxes when your surviving spouse passes. Furthermore, your wife will be able to access the assets that remain in the revocable trust free from estate taxes due to her spousal exemption.
Control the distribution
When you create a trust, you have the power to control the distributions to the beneficiaries. For example, you can specify that funds from the trust must be used only for your grandson's college tuition and other related expenses. Or, you can dictate that your children will receive a certain amount each year on their respective birthdays. You have complete control to determine the terms of distributions whether they are to your family or to a charitable organization.
Maintains the family legacy
If your goal is to ensure that your property remains in the family, you can create a qualified terminable interest property (QTIP) trust to provide for your wife until she either remarries or passes away. If one of these two circumstances occur, the remaining balance of the trust will transfer to the secondary beneficiaries you listed.
If you are considering starting the estate planning process in Massachusetts, it is important that you take time to choose the right vehicles that will effectively and efficiently transfer your assets to your chosen beneficiaries. Your estate planning attorney will be able to help you determine what tools will best suit your needs.