As people grow older in Massachusetts, they may gain a stronger understanding of their mortality and begin to focus on ensuring that they assets end up with the people they intend for them to go to. There are different ways that people can do that though. Some choose to just have a will while others may decide to put their assets into a trust. However, if people decide to put their assets into a trust they must decide between a revocable or irrevocable trust.
Both trusts will allow people to move their assets out of their name and avoid probate, but the two types of trusts provide different advantages and disadvantages.
Revocable trusts as the name infers can be modified by the grantor of the trust. This can be advantageous because it allows them to put more property in it or take out property during their lifetime. It also allows them to change beneficiaries throughout their lives. The grantor is also usually the trustee, which means they will continue to manage and control their assets. However, because they retain control over the assets, the assets could still be taken by creditors and also are subject to estate taxes. They also cannot be used for Medicare purposes.
Irrevocable trusts on the other hand cannot be modified and once the assets are in the trust they cannot be removed. They also cannot be modified in any way and a trustee other than the grantor controls the assets. This grants people very little control over the assets while they are living, but due to this lack of control people can avoid having to pay estate taxes. The assets also will not be used for Medicare purposes and can be protected from creditors.
People in Massachusetts have different options available to them when it comes to estate planning. Whether people should use a revocable or irrevocable trust is a decision that needs to be made based on the exact purpose of the trust. Experienced attorneys understand the uses of the different types of trusts and may be able to guide one through the process.