Personally Tailored Trusts In Boston
Every family’s circumstances and assets are unique. The estate planning lawyers of Cushing & Dolan, P.C., provide customized solutions for your needs and goals, including the strategic use of various types of trusts.
We can help establish the trust or trusts most appropriate to your objectives, including tax minimization, probate avoidance, creditor protection, Medicaid eligibility and business succession. We offer comprehensive estate planning to clients of every stratum in the Boston area and throughout Massachusetts, New Hampshire, and beyond. Arrange a consultation today.
Basics Of Trust Terminology
Revocable trusts — Virtually all our clients have some form of revocable trust, or “living trust,” which allows you to add or subtract assets as circumstances change over the years. We work with our clients to fund the revocable trust while they are still living, and we also ensure that any remaining assets they own in their name will “pour over” into the trust upon death. The trust serves the same purpose as a will regarding distribution of assets to your designated beneficiaries, without the time delays, expense and publicity of probate proceedings.
Irrevocable trusts — Clients with larger estates may desire to transfer some assets into an irrevocable trust. With the irrevocable trust, assets are set aside for specific beneficiaries and are not accessible to you once contributed. An irrevocable trust offers the opportunity to take advantage of lifetime gifting while further reducing the size of your taxable estate and provide creditor protection for beneficiaries.
Our estate planning lawyers are knowledgeable about options for eliminating and reducing state and federal estate taxes. They can explain all the types and applications of a trust, including:
- Irrevocable life insurance trusts
- Homestead Declaration
- New Hampshire asset protection trusts or Delaware trusts
- Intentionally defective irrevocable grantor trusts
- Realty trusts (nominee trust)
- Special needs trusts
- Charitable trusts
- GRAT vs. sale to intentionally defective grantor trust
- Qualified personal residence trust vs. home security trust
Gift Tax Exemption
One essential factor to consider is the $5 million gift tax exemption instituted through 2013. This unprecedented opportunity could have widespread implications on your overall estate planning goals.
Frequently Asked Questions
Many people have questions about trusts. Below are a few of the questions we see most often, and we would be happy to answer any others at a consultation.
How do I choose the right type of trust for my situation?
Start by considering what you want the trust to accomplish. For example, an irrevocable trust cannot be changed and owns the assets that are put into it, making it an ideal vehicle for protecting those assets from creditors.
By contrast, a revocable trust, or living trust, can be changed after it has been established. This means that it does not always protect the assets from creditors, since the person who created the trust still has some level of control over those assets.
Furthermore, options like a special needs trust or a Medicaid planning trust can be used to reduce the value of an estate, allowing beneficiaries to qualify for public benefits and pass a means test.
Can a trust help protect assets from creditors or lawsuits?
Yes. As noted above, this is often done with an irrevocable trust. Some also use offshore trusts, where they take advantage of favorable laws in another country. Either way, if the trust is the sole owner of the assets, they are sometimes exempt from creditor actions or lawsuits, such as personal injury claims. It’s very important to know exactly what type of trust you are using and how to set it up correctly, as not all trusts will offer the same benefit.
How does a trust affect taxes and estate tax liability?
Trusts can be used to reduce the value of someone’s estate. Many estate taxes are only levied after the value of the estate reaches a certain threshold. Putting some assets into a trust gets them out of the person’s name, reducing the value of their estate so that they don’t have to pay estate taxes. This can be a useful way to keep more money in the family while transferring those assets to the next generation, such as naming someone in that generation as a beneficiary of the trust.
What is the process of establishing a trust for Medicaid eligibility?
A Medicaid trust must be established properly, as there are specific ramifications. For instance, there is a look-back period, which could be as long as five years. This means the trust needs to be established at the correct time or it may not actually reduce the value of a person’s estate so that they qualify for Medicaid benefits. Our experienced lawyers can help you determine how to set up the trust, how to fund it with assets and how to use the right type of trust. Remember that Medicaid counts revocable trusts as assets in most cases, so an irrevocable trust would often be more beneficial.
Free Consultations With Experienced Attorneys
From our eight Massachusetts office locations (Boston, Waltham, Westborough and Woburn), we serve individuals, families and businesses throughout Massachusetts, New Hampshire, Florida, Pennsylvania, and New York. Call 888-759-5109 or contact us online for a free consultation with a lawyer from Cushing & Dolan, P.C.