One of the main advantages of creating a living trust instead of just writing a will is that, commonly, your family can avoid probate altogether. Suppose you’re considering drafting a living trust. In that case, the wise legal path is to consult with a local Massachusetts estate planning law firm so that they can analyze all aspects of your unique financial situation and other matters vital to your family.
One question that usually arises is: can you be the trustee of your living trust?
In Massachusetts, it is legal to appoint yourself as the trustee of any trust you create, including a living trust. Your lawyer may suggest, for specific reasons, creating either a revocable or irrevocable trust. Usually, though, appointing yourself as the trustee of an irrevocable trust in which you are also the “Settlor,” in most cases, may defeat the purpose of forming the trust in the first place.
A settlor is a person (or entity) that establishes the trust, usually you. A settlor can be called many other names, such as donor, grantor, trustor, and trustmaker. No matter what they are called, the settlor’s role is to legally transfer control of an asset to a trustee, who manages it for one or more beneficiaries.
As the name states, a revocable living trust can be modified, revoked, or terminated by the “Settlor.” A Settlor can revoke the trust at any time, for whatever reason, and without providing cause.
Among other things, the Settlor of a revocable trust can modify the terms of the trust, replace the trustee, or add and delete beneficiaries from the trust. Assets can also be added or removed from a revocable living trust.
However, when a trust is irrevocable, it cannot be modified or terminated by the Settlor, meaning assets cannot be added or removed.
The vital point to focus on is that appointing yourself as the trustee of an irrevocable trust in which you are also the settlor almost always defeats the purpose of making the trust irrevocable. Creating a trust irrevocable protects your assets in the trust. If you are the appointed trustee, you continue to control those assets, so the protection typically afforded to assets held in an irrevocable living trust would be negated.
On the other hand, if you are appointed the trustee of a revocable living trust, it may be advantageous. For example, suppose planning for your possible incapacity is your goal. In that case, you should appoint yourself as the trustee and appoint someone you wish to control your assets during your incapacity as the successor trustee.
The main point to discuss with your local Worcester estate planning lawyer before you decide on what type of trust to form or if you should be its trustee is the unique details of your financial situation and your specific goals.
Who Can Be Appointed the Trustee of My Living Trust?
If you and your lawyer establish a living trust, you must name a person or entity to be the trustee. The trustee handles all aspects of your financial affairs, such as collecting income, paying bills and taxes, saving, investing, buying, and selling assets, maintaining accurate records, and maintaining your finances in proper order.
As stated, if it’s to your advantage, you can be the trustee of your living trust. Additionally, your spouse can also act as a trustee with you. Most married couples own assets together, and if either of you becomes incapacitated or dies, the surviving spouse can continue to handle financial affairs without court interference. This is an example of one of the main reasons many people choose a living trust over a simple will.
You may appoint an adult son or daughter, a trusted friend, or a relative. If no one “fits the bill,” you may select a professional or corporate trustee, such as a family estate planning law firm. This may be advantageous as they may have more experience and investment skills.
Discuss this thoroughly with your Worcester estate planning lawyer, as choosing a trustee is critical to ensure that all your desires and goals are managed precisely as you would want them to be.
For What Reasons Would I Create a Living Trust?
Creating a living trust in Massachusetts will allow you to keep your assets held in the trust during your life yet fully control their detailed distribution after your death.
Remember, only by thoroughly discussing your finances, family matters, etc., with your Worcester estate planning lawyer can you be sure to know what type of trust you need and how it may fit your singular set of goals.
Generally, however, trusts are formed for myriad reasons, such as:
- Avoiding probate court proceedings.
- Provide long-term, goal-oriented management of property being held for the beneficiaries.
- Providing for tax situations, exemptions, and planning.
- Protect your assets from creditors, particularly in instances of Medicaid or MassHealth applications, and much more.
You must note that your finances, goals, and plans are unique, and the type of trust needed must be tailored to fit them.
How Do I Create a Living Trust in Massachusetts?
The first thing to do is to obtain the professional help needed so that the type and design of your living trust correctly fit your financial picture and specific goals.
Then, you and your estate planning lawyer will get through a few mandatory steps to proceed, such as:
- Decide between a single or joint trust – A single trust is typical if you are not married, while a joint trust is for married couples to place shared property and assets in a single place.
- Review your property – Here, you will decide what you want to include in your living trust, such as real estate, investment accounts, jewelry, and more.
- Choose a trustee – The person you select as your trustee, who can be yourself, will maintain control of your trust and all its holdings.
- Gather all your trust documents – Here, you will draft your living trust with the invaluable help of your experienced estate planning lawyer.
- Execute and sign your living trust – This must be done officially with the help of your lawyer.
- Fund your trust with assets and property – This is the legally complex part of your living trust and will usually be done with the knowledgeable help of your Worcester estate planning law team.
I Do Feel I Need a Living Trust Formed; How Should I Proceed?
Drafting and putting a living trust in place may seem simple, but any legal document that affects your and your family’s life must be done with diligence and the utmost care.
Obtaining the professional, empathetic, and knowledgeable guidance of a Worcester estate planning law firm will be invaluable in helping to secure your future wishes and protect your assets and your family. Gaining the assistance of a qualified and thorough estate planning law firm will help to ensure your future financial success and family goals.
Consult your estate planning lawyer first and get the professional advice you need to make the most of this valuable legal tool known as the living trust.