Massachusetts Trust and Estate Planning Tools

The Massachusetts estate planning lawyers at Grantham Cencarik have many tools at their disposal to help clients accomplish their planning goals. Several of the tools estate planners use in Massachusetts are described below:

---

PROBATE

Probate is the legal process in which a person’s property is distributed after their death. When a person dies, all property and assets that they owned at the time of their death must be distributed through the probate process.  If a person owns property or assets at the time of their death, Massachusetts’s law requires that the probate process be started within a certain time after their death.  The probate process is complicated and certain property is exempt from having to be probated.  If a loved one has passed away, you should consult with an attorney to find out if you need to probate their estate.

---

 

LAST WILL AND TESTAMENT

A Last Will and Testament, Or "Will" is a legal document in which a person, known as a “testator,” names one or more persons to manage their estate and provides for the transfer of their property after death.   In a will, the testator names a person who will oversee the management and distribution of their property; this person is known as an “executor”.  If you have minor children, you can also appoint a guardian that will care for your children.

Wills are not difficult to create; however, if they are not drafted, or witnessed property, they can be invalid.  Moreover, a last will and testament that is vague or ambiguous can result litigation in the Probate and Family Court, which can cause a deep emotional and financial rift amongst family members. If a will is invalidated, your wishes may be determined by a Judge according to state statute and/or among other principals of fairness to the beneficiaries or even your creditors.  

If you have a will, it is important to make sure that it is up to date.  Wills need to amended and re-executed with the occurrence of life events, such as having/adopting children, divorcing, remarrying, retiring, etc.  Wills also need to be amended based on changes in one’s assets, financial affairs, and/or their preferences for property distribution based on that persons own personal, financial, social, business, and ethical principles. It is, therefore, important to frequently review your will and entire estate plan with one of our attorneys to ensure that your estate plan properly addresses your needs.

---

TRUSTS

In its simplest sense, a trust is something (such as property) held by one party (the trustee) for the benefit of another (the beneficiary).  In estate planning, a trust is a powerful tool that can be established by a party who wishes manage and protect property with certain rules and conditions that they set.  A party who puts property into a trust is known as a “settlor.” When creating a trust, a settlor creates a document known as a “declaration of trust.” The declaration of trust is a set of rules on how the trust property will be managed.  The person who manages the trust is the trustee and the trustee is obligated to follow the rules set up by the settlor.  A settlor can put any type of property into a trust, including personal property (cash, savings, investments) and real estate. The settlor can choose “beneficiaries” of the trust: the persons for whom the property in the trust is managed and can even be the beneficiary themselves.  When drafting a trust, the settlor has broad control in giving the trustee the power to determine how property is to be distributed to the beneficiaries of the trust; including, how much, how often, and under what conditions the property is disbursed.  Trusts are highly useful in managing and distributing property according to your instructions during and after your lifetime. 

Inter Vivos Trust

An Inter Vivos Trust (or “living trust”) is established during the lifetime of the person who “set up” the trust (the “grantor”). This trust can be continue to be valid and binding upon its beneficiaries and the trust property for many years after the death of the grantor.   A living trust can be either a revocable trust (may be amended by the grantor at any time) or an irrevocable trust (the grantor and trustee may not revoke or amend the trust once it is effective).

Some of the benefits of a living trust include the following:

• Avoid Probate - Living trusts are often set up to avoid probate costs at death, since living trust assets do not need to be probated. All wills must be probated and will incur the cost of administration, such as executor, and legal fees and expenses.  Those fees can comprise, on average, up to 5% of the gross value of the estate.  Additionally, a living trust is private, and not subject to disclosure through the Courts, where all documents filed with the Court are viewable by the public. If the privacy of your assets and financial affairs, and those of your beneficiaries, are important to you, a trust is the best method to ensure security and privacy. 

• Modification: A revocable living trust may be amended, modified, or terminated at any time by the person who set up the trust, or by the trustee, according to the provisions of the trust.  Revocable living trusts allow complete flexibility for your to adjust the trust provisions concerning beneficiaries and the disbursement of property during your lifetime and after your death.  A revocable trust can provide additional flexibility in planning for many of life’s contingencies, such as: early death of children, divorce, protection of business heirs, an option to buy provision for business heirs, division of assets to business and other heirs, and asset valuation changes.

• Spendthrift: Income and property can be put into trust beyond the reach of creditors, ex-spouses, or a beneficiary’s irresponsibility.  Once property is put into a trust, the income and trust property does not qualify as the beneficiary's individual’s personal property.  In other words, trust property is held independently from the individual, and this ownership status can frustrate attempts by third parties to make claims to such property.  Trusts are also an ideal method of managing income and property for children, relatives, or other beneficiaries that have a propensity for financial irresponsibility and mismanagement, or in the case of those with substance abuse problems or other illness.  A trustee can oversee the amounts and purposes of trust distributions, as well as control the method of how such property is invested.

Testamentary Trust

A “testamentary trust” is a trust that is set up in a will, and becomes effective at the death of the person who created the will and trust. One of the primary purposes of testamentary trusts is to reduce estate taxes and ensure that a surviving spouse maintains sufficient income and property during his or her lifetime. These benefits are accomplished through the use of a credit shelter or marital deduction trust. Another purpose of testamentary trusts is to provide income to your spouse for his/her lifetime, and then to transfer assets to another family member or a charity after the death of your spouse.

It is common to use a testamentary trust in lieu of a living trust. This form of trust does not avoid the probate process. Here, the Probate and Family Court will oversee the administration of your estate, and the trust will be a matter of public record. There is no safeguard in place to protect the privacy of your financial affairs and wishes. The Probate process also involves significant legal expenses, which can comprise up to 5% of the gross value of an estate. Most clients elect a living trust for the majority of their estate planning needs since the living trust offers significant advantages over the testamentary trust.

---

FINANCIAL PLANNING

At Grantham Cencarik, P.C., we will serve as your counsel and attorney; however, we are not experts in investments, retirement, insurance, and other financial planning tools. We leave those skills to the professionals, and can work with your desired professional to create a comprehensive estate plan. If you require financial planning, we can refer you to a well established and accomplished financial advisor whom we have worked with on several occasions. This individual can assist you and our firm on meeting all of your planning needs.

---

If you would like to speak with a Boston Estate Planning Attorney about preparing a will, trust or power of attorney, contact our law firm by filling out our Free Consultation Form, or calling (617) 497-7141.

---

Free Consultation With A
Boston Estate Planning Lawyer
(617) 497-7141