Making decisions about the distribution of a lifetime of property and wealth can seem impossible. Although the actual process of drawing up a will is not a seriously complex one, it can be very stressful to actually sit down and make decisions about the circumstances surrounding your own death. Since making these final choices about where your property will go when you die can seem overwhelming, far too many people put off making a will and trust until it is too late. In most states, including Massachusetts, if a person dies without having set up a will and trust, their property will be divided according to state laws; they and their loved ones will have no say whatsoever in how the property is distributed. For this reason, it is vital to have a will drafted in conjunction with simple trusts early in life. Tragedy or illness can strike suddenly, with no warning, and it is important to be prepared.
What Are Trusts?
While a will determines what will happen to you property when you are gone, a trust is a set of instructions for the people who were close to you on how and when that property will be distributed. It is basically a contract that assigns a manager – the Trustee, to manage your assets and designate them between the people close to you – the beneficiaries. Normally, a trust has a grantor, who creates the trust. Beneficiaries may have access to some of their assets immediately at times. This would be true in a case where the beneficiary is entitled to interest or profit that is earned by the trust annually. Other assets may not be available until later, for example, some trusts are set up so that the beneficiary must be a certain age before the can obtain the assets left to them.
Revocable Living Trust
A Revocable Living Trust or Revocable Trust is created while you are still alive and determines what happens to your assets should you become mentally incapable of making decisions…or upon your death. You can change your living trust at any time during your life. This is the most common type of trust. As long as you are alive, you can serve as both trustee and beneficiary of a living trust and completely control all of the benefits that the trust manages. You will also be responsible for any and all taxes paid on those benefits. This type of trust can help to avoid any unnecessary probate proceedings which would delay the distribution of assets.
Unlike the revocable living trust and as the name implies, the irrevocable trust cannot be modified once it has been created. The trust creators actually gives up all control over any assets given within the irrevocable trust. For this reason, one must be extremely careful when writing an irrevocable trust, and will need an experienced trust attorney. The irrevocable trust is usually only created when someone wishes to give a gift that will be permanent.
There are several other types of trusts, such as special needs trusts for beneficiaries with disabilities, family and marital trusts, and more. The lawyers at Lovenberg & Associates have the knowledge and expertise to aid you in creating any type of trust that you may need.