Revocable Trusts
A revocable trust is a type of trust, the terms of which can be altered and the entire trust can be canceled (“revoked”) based on the desires of the grantor during his or her lifetime. After the death of the grantor, the trust becomes irrevocable. Revocable trusts are often an essential part of estate planning for individuals who wish for the property of their estates to avoid probate. Revocable trusts allow an individual to leave assets and property to a loved one. A revocable trust offers individuals the opportunity to create a separate entity to hold assets while an individual is still alive and offers more control over the beneficiaries who do receive assets or property from the trust. Although revocable trusts can be quite beneficial, these trusts can also prove to be quite complicated and as a result, clients who are interested in creating a revocable trust often benefit from an experienced attorney.
Essential information about how revocable trusts work in the Commonwealth of Massachusetts:
Limitations of a Revocable Trust
There are some limitations of a revocable trust including that tax planning is limited. Unlike other types of trusts, a revocable trust does not provide tax benefits because property remains part of an estate despite the creation of a trust. It is also important to remember that it is necessary to have a will to determine how assets and property that are located outside of the trust are distributed.
Revocable Trusts Assist in Avoiding Litigation Involving Multiple States
When some individuals pass away, sometimes litigation arises involving individuals from different states. In these situations, probate is sometimes required in all of the locations where the deceased individual’s property is located. These types of litigation situations can cost beneficiaries a significant amount of time and money. Revocable trusts, however, help individuals avoid probate litigation occurring in several different locations.
Revocable Trusts Avoid Probate
Revocable trusts offer the advantage that any assets or property placed within the trust avoid probate. Because the assets are transferred into a revocable trust during an individual’s lifetime, at that individual’s death, there is no need to involve a probate court to transfer the title to the asset or property. The mere presence of a will does not allow individuals to avoid probate. Assets passing under a will must instead go through the probate process. As a result, the creation of a revocable trust allows individual to avoid the time and money often attached to the probate process.
Revocable Trusts Help Property Remain Within A Family
A revocable trust can designate who receives the property or assets from the trust to the extent that the trust is able to ensure that a trust can help make sure that assets or property remains within the family if an individual so desires. A “successor trustee” can be appointed in the trust to control assets until it is time to pass the assets to designated beneficiaries.
Revocable Trusts are Essential for Remarried Individuals
For individuals who are remarried and desire to leave assets or property to children from a first marriage, a revocable trust can prove essential. In the Commonwealth of Massachusetts, an individual can intend to leave everything to children in a will, but a spouse can elect to receive a sizable portion of the deceased individual’s estate.
Resources for Revocable Trusts
Article 6 – Revocable Trusts – The General Court of the Commonwealth of Massachusetts
https://malegislature.gov/Laws/GeneralLaws/PartII/TitleII/Chapter203E/Article6
American Bar Association – What is a Revocable Living Trust?
http://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/revocable_trusts.html
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