Revocable Living Trust Lawyers in Boston
Wills and trusts are among the most common estate planning tools. You may already know that irrevocable trusts tend to offer superior tax advantages. However, revocable trusts play key roles in countless estate plans.
If you’re considering adding one of these trusts to your estate plan, the revocable living trust lawyers at Jillise McDonough Estate Planning Law Firm are ready to help.
Understanding Revocable Living Trusts in Boston
Revocable living trusts are flexible estate planning tools that can bypass probate while offering beneficiaries immediate access to assets.
Like other kinds of trusts, revocable living trusts are separate legal entities created to hold assets. However, unlike irrevocable trusts, they can be changed or dissolved at any point during your lifetime.
If you’re considering creating a revocable living trust, you should first make sure you understand the three key roles under this kind of arrangement:
- Grantor (Also Called a Settlor or Trustor): The person who creates the trust and transfers assets into it
- Trustee: The person who makes decisions about the assets in the trust
- Beneficiaries: The people who receive assets in the trust after the death of the grantor
In most cases, the grantor will serve as their own trustee. They may also choose to name a successor trustee to manage the assets in the event that they die or become incapacitated.
For instance, you might create a revocable living trust and name your adult child as a co-trustee. That way, if you start to develop a serious illness or signs of Alzheimer’s disease, your child can take over asset management for you. Co-trustees and successor trustees have a fiduciary duty, meaning they are obligated to act in your best interests at all times.
Living trusts must comply with Massachusetts state laws. A Boston successor trustee attorney can offer guidance throughout the process of trust creation to ensure your trust is legally valid.
Key Benefits of a Revocable Living Trust
Thinking about asking a Boston probate avoidance trust attorney to help you create a trust? Here are some of the main advantages for you and your family members to consider:
Control and Flexibility
Compared to many other kinds of trusts, revocable living trusts are a flexible way to manage property during your lifetime and distribute assets after your death. Unlike irrevocable trusts, they don’t help you avoid estate taxes. However, you can amend or dissolve revocable trusts at any point.
Avoiding the Probate Process
Probate is a process in which the court validates a will. Because probate is a matter of public record, it may expose your family and their finances to public scrutiny. If your assets have to go through probate, other people may learn more about your family’s situation than you’re comfortable with.
When you put some or all of your estate into a revocable trust, your family can avoid the expense and stress of probate. Your beneficiaries can immediately access their assets, too.
Incapacity Planning
When you use a revocable living trust to hold assets, you and your living trust attorney can choose a loved one as a successor trustee. If you become incapacitated, your loved one can immediately start managing your assets without going through the courts first.
Beneficiary Planning
Revocable living trusts distribute assets to heirs more quickly than wills do. They also allow you to decide how you want to pass assets to beneficiaries. For instance, if you worry that younger heirs may be irresponsible, you may specify that they shall receive their inheritances upon reaching a certain age.
Managing Assets in Different States
If you have assets like real estate located in Massachusetts, along with assets in other states, a revocable living trust may be able to help your loved ones streamline the handling of your estate.
In contrast, if your assets are in your name only (and not part of a trust), your family may have to navigate probate proceedings across multiple jurisdictions.
Revocable Living Trust vs. Will in Massachusetts
Many Massachusetts residents use both a revocable living trust and a will together to gain additional protections. A will only takes effect after death, while a revocable living trust works during a grantor’s lifetime and after death.
A revocable living trust can help to manage property in multiple states. If you have a simpler estate, however, a will may be sufficient.
A revocable living trust provides greater privacy and control compared to a will. Why? Wills must go through probate, which is when they become public documents. Trusts avoid probate.
How Revocable Living Trust Lawyers in Boston Help
Revocable living trust lawyers can help you decide whether a revocable living trust is the right choice for your specific goals.
Revocable trust lawyers understand how to create a legally enforceable document and ensure trust assets are fully protected, helping you to avoid common mistakes.
Process and Costs for Creating a Revocable Living Trust
The cost of a revocable living trust in Boston can vary. But generally, setting one up involves a one-time expense of about $5,000 to $7,500.
In Massachusetts, the process of creating a living trust involves several key steps:
Choosing Trust Assets
With the help of your revocable trust lawyers, you’ll first need to choose the assets you want to put into the trust. Many clients choose to fund their revocable living trusts with real estate, investment accounts, and bank accounts.
However, it’s important to understand that some types of assets can’t be transferred to the trust before your death. Retirement accounts — including IRAs, 401(k)s, and 403(b)s — are great examples. If you retitle your retirement in the name of the trust, the IRS will usually consider that to be a distribution, which means you could immediately owe thousands of dollars in taxes and penalties.
If you want the trust to be used to manage your retirement accounts after your death, you can name the trust as a beneficiary instead.
Choosing Beneficiaries
Before creating your trust document, you’ll also need to decide who will inherit the assets in the trust. You can select as few or as many beneficiaries as you wish.
Choosing Trustees
Most people who create revocable living trusts decide to make themselves the initial trustees of the assets in the account. However, if you do this, you’ll still need to name one or more successor trustees (or co-trustees, depending on your preferences).
This is not a decision to make lightly. You should only choose someone who will manage your assets in a way that benefits you and your family. You should also discuss responsibilities with prospective trustees to make sure they are comfortable with the role.
Drafting the Trust Document
Your revocable trust lawyers will draft the legal document that creates the trust. It’s important to work with attorneys who have experience creating revocable living trusts. If your lawyer makes a mistake when creating the document, it could lead to complications down the line.
Executing the Trust
Massachusetts requires you to sign the trust document in front of a notary public to make it valid. If you don’t notarize the document, your trust won’t become an official legal entity.
Funding the Trust
Don’t forget this critical step. If you don’t actually transfer your assets to the trust, they’ll stay in your name only.
How you transfer your assets to the trust will depend on its asset class. For instance, if you need to put real estate into the trust, you’ll need to record a new deed putting the property in the trust’s name. Transferring financial accounts is usually simpler, as you’ll generally just need to retitle them to the trust.
Once you’ve created your trust, our team can help you verify that all asset transfers have been completed correctly.
Creating a Pour-Over Will
This is a separate, optional step, but it’s highly recommended. A pour-over will is a document that operates like a safety net. It specifies that any assets you didn’t transfer to the revocable living trust in your lifetime must be placed in the trust after your death.
If you don’t create a pour-over will, your loved ones might have to go through the probate process for the handful of assets that didn’t make it into the trust. Creating a pour-over will is relatively simple, and it can give you and your loved ones peace of mind.
A Boston pour-over will and trust lawyer can help you create a plan for protecting and distributing assets appropriately.
Work With Jillise McDonough Law Firm
Do you need a revocable living trust attorney in Boston? If so, we’re here to help. Jillise McDonough Estate Planning Law Firm focuses on trusts and estate planning, and we’re committed to helping each of our clients cement their legacies.
Our revocable living trust lawyers can help you create or update your living trust, choose your trustee, and ensure your trust fits into the rest of your estate plan. Get in touch with us today to see how we may be able to help you.
Frequently Asked Questions
Can I Change or Revoke a Revocable Living Trust?
Yes. You may change it at any point as long as you are mentally competent. After your death, it becomes an irrevocable trust.
Who Can Serve as Trustee of a Revocable Living Trust in Boston?
Boston revocable trust laws provide some flexibility when it comes to choosing a trustee. If you wish, you may serve as the initial trustee. Some people appoint a spouse or adult child to act as the trustee.
However, if you have a very large or very complex estate, you may want to consider a corporate trustee. This means that you select a bank or other financial institution to oversee the trust.
Can a Revocable Living Trust Help With Incapacity Planning?
Yes. The best way to prepare for incapacity is to name a successor trustee (usually a spouse or adult child) who can take over the trust if you are unable to manage it yourself.
If you’re planning for incapacity, your Boston family trust attorney can help you create a revocable living trust, power of attorney, healthcare proxy, and any other documents you need.
How Does a Revocable Living Trust Avoid Probate?
A trust can help avoid probate after your death. The assets held in the trust are not considered part of your estate, so they may be transferred directly to your loved ones after your death.
Can a Revocable Living Trust Hold All Types of Assets?
No. A revocable trust is a versatile estate planning tool that can hold many types of assets. However, there are a few types of assets you can’t (or shouldn’t) put in a revocable living trust. Tax-deferred retirement accounts, health savings accounts (HSAs), life insurance policies, and international assets are a few examples.
How Does Funding a Revocable Living Trust Work?
How you fund your trust depends on what types of assets you’re adding. For instance, to transfer real estate into the trust, you’ll need to record a new property deed. For bank accounts and investment accounts, you’ll need to contact your bank to switch ownership of assets over to the trust.
Our revocable trust lawyers can help you ensure that you complete all asset transfers correctly when funding your trust.
Can a Revocable Living Trust Be Used for Minor Children?
Yes, many people set up revocable living trusts to pass assets down to minor children. You can nominate a trustee to manage the assets while the children are still minors. You may also choose to transfer remaining assets in the trust directly to your children once they reach a certain age.
How Does a Revocable Living Trust Impact Taxes?
Your revocable living trust won’t impact estate taxes. However, assets in the trust get a step-up in basis at the time of your death. This can save your heirs a significant amount in capital gains taxes if they later sell inherited assets.
If you want to learn more about how revocable and irrevocable trusts can impact your estate taxes, a Massachusetts uniform trust code lawyer in Boston can help.
Can a Revocable Living Trust Be Contested in Massachusetts?
Yes, in Massachusetts, a trust can be contested just like a will can. Common reasons for challenges include undue influence, lack of mental capacity, and suspected fraud.
How Often Should a Revocable Living Trust Be Updated?
It’s best to conduct regular reviews of your revocable living trust every three to five years. You should also update it after significant life events or major life changes like marriage, divorce, or having a child. A revocable trust amendment lawyer in Boston can assist you in updating your trust.
