In the first part of this series, we explored intestacy and wills. Today, we will delve deeper into what Massachusetts estate planners should know about trusts.
Trusts hold and distribute or maintain assets for beneficiaries. A trust is administered by a designated person called a trustee and is not subject to probate. Your trust's trustee is responsible for managing and distributing assets in the trust in accordance with your wishes.
FindLaw describes several of the different types of trusts, which include:
- Tax bypass trusts, that allow your surviving spouse to live off of trust proceeds while the assets pass to the beneficiaries in trust after his death. Tax bypass trusts allow you to pass on more money tax free.
- Revocable Living Trusts, that create a trust that you can alter when you are alive, but that becomes irrevocable upon your death. It offers the maximum amount of control of your estate after your death, without the cost of creating a new trust each time you add or remove an asset or beneficiary. Once the trust becomes irrevocable, nobody can remove any of the assets or alter the terms of the trust.
- Charitable Trusts, that dedicate the assets you have designated to fund the trust to pursuing a charitable cause.
- Special Needs Trusts, that are used to benefit special needs beneficiaries who rely on income-based government assistance. These types of trusts are specifically created to avoid running afoul of income caps that could cause beneficiaries to lose access to their government assistance.
Real property, personal property and intangible property can be used to fund a trust. For more information about trusts and trust administration, visit our webpage.