MA estate planning attorneys frequently provide for a Living Trust as the heart of a person's estate planning. Estate planning would also typically is also known as a Revocable Trust.
It can give you several advantages over just having a Will.
The advantages include these:
Tax benefits
Non-tax benefits
Tax Benefits of Irrevocable Trust
Generally, the tax benefits are available to married couples, or those with a long-standing relationship. The Living Trust would include providing a sub-trust for the benefit of the surviving spouse or partner.
This sub-trust could provide income and principal to the survivor but with under broad conditions. The sub-trust is written to be excluded from the survivor's gross taxable estate.
This exclusion of the sub-trust in the second estate would lower the survivor's estate tax, as the tax authority calculates this tax as a percentage of the total estate value.
In short, the survivor gets the benefit of the sub-trust but the assets are NOT in the estate of the survivor.
The Irrevocable Trust gives benefits apart from the above tax approach. It can accomplish these goals:
Keep money out of the hands of underage or beneficiaries with issues (addiction, etc.)
The trustee holds the money for the particular beneficiary, after your death, and then gives it to them over time. This approach slows the distribution of money until the trustee can consider its eventual use.
The trustee is the person or persons who is put in charge of the money until it is fully distributed sometime in the future.
Avoids the probate of a will
By having assets in an irrevocable trust established by you in Massachusetts, this prevents the need to have those assets pass through the probate court process at your death.
But some assets, such as an IRA, are not owned by your trust. Because these assets have a Designation of Beneficiary, it goes to the person or persons you have named, without probate.
