Boston area residents often find that when they begin the estate planning process they have many different options to consider. It is all part of putting together a comprehensive estate plan. However, there is one estate planning instrument in particular that can be quite helpful for those who have the goal of protecting their assets: a trust. So, what are the basics about trusts as part of an estate plan?
Well, for starters, it helps to know the difference between the wide variety of trusts that may be an option. Furthermore, in most cases, a trust is either “revocable” or “irrevocable.” A revocable trust can be canceled or changed at any time, in many cases, while an irrevocable trust is, for the most part, unchangeable after it is established.
A trust is established by a “trustor,” who is the person or entity with the assets in question. A “trustee” is a person or entity that then manages the ownership of the assets, for the benefit of another party, known as the “beneficiary.” In essence, the trust becomes the owner of the assets in question.
One of the most beneficial aspects of having a trust as part of an estate plan is that assets can effectively pass on to a beneficiary without the need for the assets to pass through the probate process, in most cases. There are also potential tax benefits as well. Any Massachusetts residents who are considering their options at the start of their estate planning journey may be wise to think about whether or not a trust is a good option for their own unique financial and family situation.