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What is a Revocable Trust

A revocable trust is a trust you can revoke at any time during your lifetime.  Many different kinds of trusts can fall within this category- the key defining element is that you can change your mind later.  Unless you are creating a trust to protect assets from long term care costs, remove assets from your estate for estate tax purposes, or for other reasons that require an irrevocable trust, a revocable trust provides you maximum flexibility.  Below are some of the main goals you can accomplish with a revocable trust.

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Avoiding Probate

Assets that are placed into trust during your lifetime will pass automatically upon your death, without the need for the probate process.  In the case of real estate, this means the trustee will immediately have legal authority to manage the property, including selling it if that is consistent with your wishes as set forth in the trust.  In contrast, if that property were to pass through probate court, it could be months before anyone had the authority to do these things.

The other benefit of avoiding probate is that a probate proceeding is public record, while distributions by a trustee are private in nature.  Distributing through a trust ​​will keep your decisions about your legacy private, and also protect your heirs from others knowing what they have inherited.

Managing Minor Children's Inheritance

If you have minor children or grandchildren who will inherit from you, it can be a cumbersome process to set up vehicles to oversee their inheritance during the probate process.  Without a trust, you also do not have any control over who is trustee, or what roadmap or standards you would like them to follow in managing assets for your heirs.

With a trust, you can specify the trustee, and as much or as little detail as you would like about priorities for spending down those assets.  If education is a priority for you, for example, you can make it a priority that the trustee preserve as much as possible for their college education.  

One nice thing about a revocable trust for this purposes is that as your children or grandchildren grow, your thoughts and wishes for them may adjust, and you have the absolute right to amend or revoke the trust anytime you wish.

Managing Transitions for Family Property

It is not uncommon for a family that has a unique family asset- a vacation home or a family farm, for example, to struggle when suddenly a number of siblings are co-owners instead of one person or one couple.  It gets even stickier if there are multiple generations inheriting the property.

The parents who are the primary owners frequently want to set some guidelines to reduce family strife and protect whatever values they associate with the property.  We have seen many of these people try to spell this out in their wills, not knowing that this does not work.  A will only determines who receives property out of probate- the probate court has no authority to dictate what the heirs do with the property afterward.

This is where a revocable trust can help- the trust document can appoint one or more trustees, and provide the blueprint for how decisions should be made about the property.  The property can be deeded directly into the trust when it is created, or the parents can dictate that on their death the property will go to the trust.  

Minimizing Estate Taxes (Sometimes)

In general, property is still considered part of your taxable estate if it is transferred to a revocable trust.  There is, however, one way in which revocable trusts can help shield your family from estate tax liability.  If set up correctly, a married couple can essentially share their estate tax exemptions.

For example, in Massachusetts the estate tax threshold is $1 million per person.  That means if your taxable estate- which includes jointly owned property that passes outside of probate, life insurance proceeds, and investment or bank accounts with designated beneficiaries- exceeds $1 million, your estate will owe taxes, starting at approximately $36,000.  If those assets total $999,999, your estate will owe nothing.  When the first spouse dies, the surviving spouse is entitled to an unlimited exemption for anything they inherit, but without estate planning, the bill will become due when the second spouse passes holding assets that exceed the $1 million threshold.

Certain trusts, often called AB trusts or family trusts, allow this married couple to pool their $1 million exemption, meaning collectively they will have $2 million in exempt assets even at the death of the surviving spouse.

Other trust-based estate tax planning strategies require irrevocable trusts, but this kind of revocable trust is something that all married couples should at least consider. 

How Our Estate Planning Lawyers Can Help

Estate Planning Jenna Ordway slnlaw MA
Estate Plan Jenna Ordway slnlaw MA
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Estate Planning in Massachusetts
We are ready to help.  We understand this can be a difficult issue to tackle, so we have designed our process to make it as easy as possible for you to get the plan in place that protects you and your family and accomplishes your goals.  You can use the button below to schedule a free information call, or simply give us a call at  781-784-2322.
Schedule a Free Information Call

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  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Advice for Employers >
      • Hiring Independent Contractors in Massachusetts
      • Termination Best Practices
      • Workplace Discrimination Employer Guide
      • Employee Handbook >
        • Employee Handbook Basics
      • Paid Family Leave and Your Small Business
      • Overtime Law for Employers
      • Employee Complaints About Pay
      • Employee Non Competes
    • Advice for Employees >
      • Employment Case Assessment
      • Discrimination in the Workplace
      • Sexual Harassment at Work >
        • Sexual Harassment Resources
        • Sexual Harassment in a Small Business
        • Constructive Discharge
        • Sexual Harassment and Non Disclosure Agreements
        • Sexual Harassment and Remote Work
        • Sexual Harassment Case Studies
      • Massachusetts Paid Family Leave
      • Non Compete Agreements >
        • Are non competes enforceable
        • Massachusetts Non Compete Act
        • Pre 2018 Massachusetts Non Competes
        • Non Compete Case Studies
        • Can I Avoid My Non Compete
      • Independent Contractor Law >
        • Independent Contractor Test
        • Working As Independent Contractor
        • Independent Contractor Case Studies
        • Independent Contractor Roadmap
      • Wage and Hour Laws >
        • Massachusetts Minimum Wage
        • Overtime Law >
          • Overtime Exemptions
          • Employee Travel Time
          • Federal or State Overtime Law
        • Overtime Law Case Studies
        • Massachusetts Wage Act >
          • Payment of Commissions
          • Wage Deductions
          • Late Payment of Wages
          • Paid Time Off
        • Wage Act Case Studies
        • What Are Your Wage and Hour Rights
      • Employment Contracts in Massachusetts >
        • Restrictive Covenants
        • Promissory Estoppel
      • Employment Termination >
        • Severance Pay
        • Should I Accept a Severance?
    • Unemployment in Massachusetts >
      • Unemployment Overpayment
      • Pandemic Unemployment
      • Unemployment Case Studies
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection >
      • Why You Need an Estate Plan >
        • Why You Don't Have an Estate Plan
      • Massachusetts Estate Tax
      • Asset Protection Trusts
      • Children with Special Needs
    • Planning for Assisted Living
    • Is Your Will Enough >
      • Special Circumstances >
        • Estate Planning for Blended Families
        • Estate Planning for a Non Citizen Spouse
        • Estate Planning and Divorce
        • Estate Planning for Small Business Owners
      • Surviving Spouse's Share
      • Disinheriting Children Massachusetts
      • Updating Your Estate Plan
    • Estate Planning Documents >
      • What is a Trust >
        • Revocable trust
        • Irrevocable trust
        • Irrevocable vs revocable trust
      • Last Will and Testament
      • Durable Power of Attorney
      • Massachusetts Health Care Proxy
      • Life Estates in Massachusetts
      • Massachusetts Pet Trust
    • Probate Process >
      • Non Probate Assets
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
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