Planning for the future can feel overwhelming, but creating a living trust is one way to gain peace of mind while protecting your loved ones. A living trust is a thoughtful plan to ensure your wishes are carried out seamlessly.
At Jordan & White, we understand how important it is to safeguard your assets and provide for your family. For over 13 years, we’ve been helping Massachusetts residents create effective estate plans that suit their unique circumstances. Let’s explore how a living trust works and why it might be the right choice for you.
What Is a Living Trust?
A living trust is a legal document that allows you to place your assets in a trust during your lifetime. Think of it as a personal “safety deposit box” where you store your assets and provide instructions on how they should be managed or distributed after your death.
There are two main types:
- Revocable Living Trusts: These can be changed or canceled during your lifetime, offering flexibility.
- Irrevocable Living Trusts: These typically cannot be altered once created but may offer tax advantages in certain situations.
A trust includes three key roles:
- Grantor: You, as the creator, set up the trust.
- Trustee: The person (or institution) responsible for managing the trust.
- Beneficiary: The individual(s) or organization(s) that will benefit from the trust’s assets.
By creating a living trust, you retain control over your assets while making it easier for your loved ones to manage your affairs after you’re gone.
Benefits of a Living Trust
Creating a living trust comes with several advantages:
Avoid Probate
Probate in Massachusetts can be lengthy and expensive, often taking months or even years to complete. Assets held in a trust bypass probate, ensuring a smoother and faster transfer to your beneficiaries.
Maintain Privacy
Unlike a will, which becomes public record during probate, a living trust keeps your financial matters private.
Flexibility and Control
With a revocable trust, you remain in charge. You can add or remove assets, update beneficiaries, and make changes as your life circumstances evolve.
Incapacity Planning
If you become unable to manage your affairs, the trustee can step in to handle your assets, following your instructions. This prevents the need for court-appointed guardianship.
Reduce Estate Taxes
While Massachusetts has specific estate tax laws, a well-structured trust may help minimize tax obligations. It’s wise to discuss this aspect with an estate planning attorney.
Avoid Guardianship Proceedings
In cases of incapacity, a living trust can eliminate the need for court intervention to appoint a guardian or conservator.
How to Create a Living Trust
Creating a living trust may seem daunting at first, but with the right steps and guidance, it’s a straightforward process. Here’s how we help you build a trust that aligns with your goals and protects your loved ones:
1. Seek Legal Counsel
Working with an experienced estate planning attorney is essential. While online templates might seem appealing, they often fall short of addressing your unique needs or Massachusetts-specific laws. At Jordan & White, we make sure your trust is thorough, legally sound, and tailored to your life circumstances.
When you meet with us, we take the time to explain the process, answer your questions, and understand your goals. A personalized trust isn’t just about avoiding mistakes—it’s about ensuring your wishes are carried out exactly as you intend.
2. Inventory Assets
Before creating your trust, it’s important to identify everything you own. This includes:
- Real estate, such as your home or investment properties.
- Bank accounts and retirement savings.
- Stocks, bonds, and other investments.
- Personal property like vehicles, jewelry, or artwork.
Making a detailed list helps ensure no assets are overlooked. We’ll also help you determine which assets belong in the trust and which might be better managed through other means, like beneficiary designations.
3. Choose a Trustee
The trustee is the person or institution responsible for managing the trust. You can serve as the trustee while you’re alive and capable, but naming a successor trustee is crucial for when you’re no longer able to manage the trust yourself.
Choosing the right trustee involves considering someone who is trustworthy, organized, and capable of handling financial responsibilities. This could be a family member, close friend, or a professional trustee.
4. Draft the Trust Document
The trust document serves as the foundation of your plan. It outlines:
- Who the grantor, trustee, and beneficiaries are.
- How assets will be managed during your lifetime.
- Instructions for distributing assets after your death.
We handle all the legal details to ensure the trust is clear, enforceable, and aligned with Massachusetts laws. This document can also include provisions for managing assets if you become incapacitated.
5. Sign and Notarize
For the trust to be valid, it must be signed in front of a notary public. This step ensures the trust meets legal requirements and is recognized as binding.
We guide you through this process, ensuring all signatures are completed correctly.
6. Fund the Trust
Creating the trust is only part of the process—you’ll also need to “fund” it. This means transferring ownership of your assets into the trust’s name. For example:
- Real estate: Update the title or deed to reflect the trust as the owner.
- Bank accounts: Change the account ownership or add the trust as a beneficiary.
- Investments: Work with your financial advisor to update account registrations.
This step is crucial; if assets aren’t properly transferred, they won’t benefit from the protections of the trust. We provide guidance on how to complete these transfers or handle them for you.
Checklist for a Productive Meeting
To make the process as smooth as possible, gather the following information before meeting with your attorney:
- A list of all assets and their estimated values.
- Contact information for potential trustees and successor trustees.
- A clear idea of who you’d like to name as beneficiaries.
- Any specific instructions for how you want assets managed or distributed.
Common Misconceptions About Living Trusts
Living trusts often come with misunderstandings. Let’s clear up a few:
- “Trusts are only for the wealthy.” Not true. Trusts are helpful for anyone who wants to simplify asset management and ensure a smooth transition for their loved ones.
- “A living trust replaces the need for a will.” While a trust avoids probate for included assets, a will is still needed to manage anything left outside the trust.
- “Trusts are too complicated.” With the right guidance, creating a trust is straightforward and can save time and stress in the long run.
Why Choose Jordan & White for Your Living Trust Needs?
At Jordan & White, we pride ourselves on a personalized approach. With offices in Danvers and Medford, we’ve been helping families across Massachusetts create estate plans tailored to their needs since 2011.
We know that trust planning isn’t one-size-fits-all. Whether you’re starting fresh or updating an existing plan, we take the time to understand your goals. Our commitment to client care means you’re never left in the dark—we’re here to answer questions and offer solutions that work for you.
Need Help Creating a Living Trust?
Creating a living trust is a meaningful step toward securing your future and protecting your loved ones. At Jordan & White, we make the process simple and stress-free by offering personalized guidance tailored to your unique needs.
Whether you’re looking to establish a new trust or update an existing one, our team is here to help. Call us at 978-744-2811 or visit Jordan & White to schedule a consultation. Let us help you protect what matters most.