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Browse our 1 legal question about Trusts in United States and the lawyer answers, or ask your own questions for free.
Trusts play a crucial role in estate planning and asset protection in Massachusetts. A trust is a legal relationship where one party, known as the trustee, holds and manages assets for the benefit of another party, called the beneficiary. Massachusetts residents use trusts to pass wealth to heirs, create tax advantages, protect assets from creditors, avoid probate, and dictate how assets are distributed. There are many types of trusts recognized in Massachusetts, including revocable living trusts, irrevocable trusts, testamentary trusts, and special needs trusts. Each has unique purposes, requirements, and implications under state law.
While simple estate planning can sometimes be managed without legal counsel, many situations involving trusts require the experience of a qualified lawyer. Common reasons to seek legal assistance include:
Massachusetts follows the Massachusetts Uniform Trust Code (MUTC), which sets forth the rules for creating, managing, and dissolving trusts. Some key aspects include:
A revocable trust can be changed or revoked by the creator during their lifetime. An irrevocable trust, once established, generally cannot be altered or ended without the consent of the beneficiaries.
A will outlines how your assets are distributed after death, but it may require probate. A trust can allow assets to pass directly to beneficiaries, keep your affairs private, and may help in managing your assets if you become incapacitated.
Certain trusts, such as irrevocable life insurance trusts and qualified personal residence trusts, can help reduce or manage estate tax exposure, but careful planning under current state and federal laws is required.
Most assets, including real estate, bank accounts, investments, business interests, and personal property, can be placed in a trust. Some assets, like IRAs and certain retirement plans, require special handling.
A trustee should be someone trustworthy, responsible, and capable of following your wishes. You may choose a family member, friend, professional advisor, or corporate trustee.
Massachusetts taxes the income of trusts that are administered in-state or have Massachusetts resident beneficiaries. Trusts may also be subject to federal taxation, depending on their structure.
A special needs trust allows assets to be held for a disabled beneficiary without impacting their eligibility for government benefits such as Medicaid or Supplemental Security Income.
Yes, assets held in a revocable living trust typically bypass the probate process, allowing for a more private and expedited transfer to beneficiaries.
If your trust is revocable, you can change or revoke it at any time while you are competent. Irrevocable trusts generally cannot be changed or revoked without beneficiary consent and court approval.
If a trustee breaches their fiduciary responsibilities, beneficiaries can seek court intervention to remove the trustee, require accountings, and recover losses due to trustee misconduct.
If you seek more information about trusts and related legal issues in Massachusetts, consider these resources:
If you believe you need legal advice or would like to set up or update a trust in Massachusetts, consider the following actions:
A qualified trust attorney can provide personalized guidance, draft necessary documents, address tax planning, and help you avoid unintended legal consequences.
