Woburn & Beverly Trust Attorney

Trusts play a vital role in estate planning and the talented team at The Heritage Law Center in eastern Massachusetts is ready to create a wide array of trusts to serve important purposes for you and your family. A trust holds legal title to property for the benefit of another person (“beneficiary”). The person who creates the trust (“the grantor”) chooses a manager (sometimes themselves), known as the trustee, to manage the assets in order to protect them. Think of it like a box where you can hold your assets for your benefit during your lifetime, and thereafter for the benefit of another person.

The trustee has a fiduciary responsibility as they’re required to act legally and ethically in the best interest of the grantor and the beneficiaries. A trust can be used to distribute property before death, at death, or afterwards. 

Reasons for Creating A Trust

Though no two clients have identical estates, our trust attorney uses their knowledge of federal and state law to craft estate plans that will be most helpful in your particular circumstances. We will clarify the various ways in which certain trusts provide security and/or flexibility as you prepare to achieve your financial and familial goals. Well-drafted trusts are designed to meet one or more of the following objectives:

  • Protection from excessive taxation
  • Privacy maintenance
  • Provision for family members with special needs
  • Provisions for minor children
  • Protection of loved ones who are unable to manage money

The Heritage Law Center is dedicated to protecting your assets as we help you plan for the future. Matthew Karr, Esq., is a knowledgeable trust lawyer who will discuss your trust options and clarify the benefits of each so you can make well-informed decisions. 

Two Basic Types of Trusts

There are two basic types of trusts: revocable and irrevocable. Revocable trusts may be altered during your lifetime, while irrevocable trusts, once created, can’t be changed. Both may be “living trusts” since they go into effect during your lifetime.

Revocable Trusts provide the advantage of flexibility; they remain part of your estate and can be taxed. When you die a revocable trust becomes irrevocable so assets will be passed on to your beneficiaries. The major advantages are that these documents: [1] avoid probate, saving you both time and money, [2] preserve your privacy since, unlike wills, trusts aren’t public documents, and [3] set up a plan to handle your assets and income if you become incapacitated.

Irrevocable Trusts can’t be changed or dissolved after they’re created. Irrevocable trusts are less flexible than revocable trusts, but they provide greater protection for the assets in them. The protection is due to the fact that technically the assets in the irrevocable trust don’t belong to you anymore; they belong to the trust. The advantage of these trusts are that they [1] protect assets from MassHealth as long as they’re placed in the trust prior to the five-year look-back period, [2] provide protection from lawsuits, and [3] reduce estate taxes (contents aren’t taxed when you pass away).

Our Trust Attorney Can Also Help Create these Types of Trusts

Testamentary Trusts are included in wills. They don’t go into effect until you die, making them irrevocable. They can hold accumulated assets as well as funds that will only be available for distribution after your death, for example, proceeds from a life insurance policy. 

Trusts for Minors allow certain amounts to be dispensed by the trustee to the child during childhood, but others permit no dispersal until the minor reaches the age of maturity. These documents may also be created to allow the minor to access funds at certain ages or when a pre-established goal is met, like a college graduation. Funds in such a trust can also be protected from being split with a divorcing spouse.

Special Needs Trusts are designed for families that have at least one member whose physical, cognitive, or psychiatric disability prevents that person from managing money, but for whom economic resources must be provided. By creating a special needs trust, the funds are made available to the relative through the trustee. However, since the money isn’t legally under the disabled person’s ownership, the funds won’t make the individual ineligible for MassHealth or other government benefits.

Spendthrift Trusts are created for families that include members who have a history of irresponsible behavior and poor choices. Such relatives may have an addiction to alcohol, drugs, gambling, or erratic spending habits that make it foolish to give them large amounts of money. A spendthrift trust with a well-grounded trustee at the helm will make certain the individual in question has his/her needs met but is protected from squandering a sizable inheritance.

Charitable Trusts are classified as either remainder or lead. Each has advantages and both accomplish dual purposes: funding the chosen charity generously and benefiting the family in terms of lowering taxes and generating income. As a charitable planning attorney, Matthew Karr, Esq., will work with you to create a plan that combines philanthropic, financial, and tax savings goals.

Married A-B Trusts (“bypass trusts”) permit spouses to combine their exemptions. When one spouse dies, their assets are transferred to an irrevocable trust rather than going directly to the surviving spouse. In some cases, the latter will receive income generated by the trust. This arrangement saves the heirs a possibly large estate tax when the second spouse dies.

Qualified Terminable Interest Property (QTIP) Trusts make spouses eligible for an unlimited marital deduction. This means that no estate taxes will have to be paid by the surviving spouse. The QTIP also benefits successor beneficiaries who can receive untaxed assets when the second spouse dies.

Qualified Personal Residence Trusts (QPRTs) allow you to give your primary beneficiary your house as a gift, paying a low gift tax rate, while you continue to live in your home during your lifetime. A QPRT also avoids estate tax.

Pet Trusts provide peace of mind that your beloved pets will be well-tended if they become incapacitated or you predecease the animal that is such an important part of your life.

Gift Trusts allow grantors to give $14,000 per recipient without decreasing the lifetime exemption of $5,490,000 for federal estate tax exemption. Moreover, if two spouses give to the same person during the year, they can double the gift amount while still protecting their lifetime exemption, a process known as “gift splitting.” 

Stand-Alone Retirement Trusts name a beneficiary of your retirement account to ensure that when you pass away, your IRA or 401k funds will be protected from creditors, lawsuits, or bankruptcy proceedings.

As a trust administration attorney, Matthew Karr, Esq., routinely advise trustees and works with them to ensure that trusts are being administered properly since they have a legal responsibility to act in the best interest of the beneficiaries. He also acts as a trustee for clients upon their request.

Contact Our North Shore Trust Attorney Today

We have our clients’ best interests at heart, and we know there’s only value in having a trust if it’s funded, which means transferring your assets into the trust. We work with a team of professionals who can assist you in funding your trust.

At The Heritage Law Center, we’re eager to help you get your future on track by making use of estate planning tools that will be effective and help you meet your goals. Don’t lose money or prevent your beneficiaries from inheriting all you want them to have. Our experienced trust lawyer will use his expertise to guide you to make certain your trusts protect your assets and those you love. Contact our law firm now for a consultation.