Trusts can be an indispensable tool for avoiding significant estate taxes when passing assets to loved ones. Trusts are typically set up for a number of reasons, which include, but are not limited to:
- Avoiding or simplifying the probate process for your heirs after you pass away
- Keeping your assets private
- Securing your home so you can still qualify for Medicaid without losing your home
- Asset protection against creditors or judgements
- Shielding a taxable estate with significant assets from estate tax
- Supporting loved ones who may require continuing financial support, for example with a Special Needs Trust
The person who funds the trust is called the Grantor, and the person or institution who takes legal ownership of the trust on behalf of its beneficiaries is called the Trustee. Trusts are effective estate planning tools because the Trust owns the assets, meaning that the assets are kept separate from the estate and can bypass estate taxes, probate, and in some cases shield assets from creditors, judgements and liens.
Assets in a trust are not controlled by the Will so they typically avoid the Probate process. Creating a trust will make the transfer of your assets much smoother for your heirs after you pass away.
Many assets can be added to a trust, including retirement accounts, real estate, business interests, investments and tangible property such as family heirlooms.
It is important to discuss your estate planning objectives with an experienced Massachusetts trusts and estate planning attorney who can help you decide on the type of trust that will help you achieve your goals.
Some common types of trusts include an Irrevocable trust which cannot be changed during your lifetime, and a Revocable trust which can be changed while you are living. A Joint Trust provides for the surviving partner after one partner, usually the spouse passes away. Charitable trusts, such as a Charitable Remainder Trust, can be used to achieve philanthropic goals while providing an income stream.
Trusts are a cost-effective and an important tool to keep your wealth in the family, avoid the complicated process of probate, retain privacy and take care of family members. Choosing which type of trust is best tailored for you is what we do here at Amaral & Associates, P.C. We work closely with families to preserve wealth using trusts and other estate planning instruments. Please contact us today to learn more.
