Planning for the future isn’t just about knowing what you want—it’s about making sure your wishes are legally protected.
At Jordan & White, LLC, we understand that married couples in Massachusetts face unique estate planning challenges. That’s why we’re committed to helping you explore innovative strategies, like living trusts, to protect your family’s assets.
You may have heard of a living trust, but you might not be sure how it works or whether it’s the right fit for you and your spouse. We’re here to break it down into simple terms so you can make an informed decision.
What is a Living Trust and How Does it Work?
A living trust is a legal arrangement where you (the grantor) transfer ownership of your assets to a trustee, who manages those assets to benefit your devisees (or heirs).
The grantor often serves as the initial trustee, maintaining control over the assets during their lifetime.
Living trusts are often compared to wills, but they come with distinct advantages. Unlike a will, a living trust bypasses probate, making it a faster and more private way to transfer assets.
Plus, it can help minimize family conflicts and ensure a smoother transition when the time comes.
Benefits of Living Trusts for Married Couples
When married couples in Massachusetts establish a living trust, they gain several key benefits:
- Asset management and protection: Organize and safeguard your property.
- Continuity and control: Keep things running smoothly even if one spouse passes or becomes incapacitated.
- Privacy: Avoid probate and keep financial details out of public records.
- Tax considerations: In some cases, reduce or defer tax liabilities (we’ll explain more below).
Let’s explore how these benefits vary based on the type of living trust you choose.
Joint Revocable Living Trusts for Married Couples
A joint revocable living trust is one trust shared by both spouses. You and your spouse place your assets into this trust, and both of you serve as co-trustees, retaining control over the property.
When one spouse passes away, the surviving spouse usually continues managing the trust.
Benefits
Joint revocable living trusts offer several practical advantages, making them an appealing choice for many couples:
- Simplicity and convenience: With both partners’ assets in a single trust, funding and management become easier. This is especially useful for shared property like real estate or joint investment accounts.
- Continuity after first death: The surviving spouse maintains control, ensuring financial stability and continuity.
Considerations
While joint trusts can be beneficial, there are important factors to keep in mind before creating one:
- Asset protection: Joint trusts offer limited protection from creditors while both spouses are alive.
- Tax implications: Since Massachusetts is not a community property state, the step-up in basis may not apply to all jointly owned assets. Consulting with legal professionals is essential.
- Suitability: Joint trusts work well for couples with unified financial goals and agreed-upon devisees. However, they may not be ideal if you have separate property or complex family dynamics.
Separate Revocable Living Trusts for Married Couples
Unlike joint trusts, separate revocable living trusts allow each spouse to establish their own trust, giving them more individual control over their assets.
Benefits
Separate trusts come with several unique advantages, especially for couples who prefer individualized control over their estates:
- Asset protection: Separating assets between two trusts may offer better creditor protection, especially for individually owned property.
- Flexibility after first death: The surviving spouse can manage their trust while the deceased spouse’s trust can distribute assets according to their specific wishes.
- Control over distribution: Separate trusts allow for personalized asset distribution, which is helpful in blended families or when each spouse has different devisees.
Considerations
While separate trusts offer several advantages, there are key factors to evaluate before deciding on this structure:
- Tax implications: Separate trusts may allow for more advanced tax planning strategies.
- Suitability: Ideal for couples with distinct financial goals, separate property, or children from previous marriages.
How to Create a Living Trust For Married Couples in Massachusetts?
Creating a living trust involves careful planning and several key steps:
1. Review and Inventory Assets
List all assets you plan to transfer into the trust, including real estate, bank accounts, investments, personal belongings, and business interests.
2. Choose Trustees
Decide who will serve as trustee (and successor trustee). Many couples choose themselves as co-trustees during their lifetimes and name a trusted family member or professional as a successor.
3. Draft the Trust Document
The trust document should detail:
- Trustee responsibilities
- Asset management and distribution instructions
- Devisees (primary and contingent)
4. Sign and Notarize
In Massachusetts, you’ll need to sign the trust document in front of a notary public, especially if real estate is part of the trust.
How to Fund a Living Trust For Married Couples in Massachusetts
A living trust is only effective if properly funded, meaning the assets must be legally transferred to the trust. Different asset types require specific steps to ensure they are included and managed correctly.
- Real Estate: Prepare a new deed transferring the property title to the trust and record it with the appropriate Massachusetts registry.
- Bank and Investment Accounts: Contact financial institutions to update the account titles to the trust’s name.
- Personal Property: For valuable items like jewelry, artwork, or collectibles, create an assignment of personal property documents to transfer ownership legally.
- Business Interests: Transfer ownership of shares, partnerships, or LLC memberships to the trust while ensuring compliance with any existing agreements.
- Life Insurance and Retirement Accounts: Update beneficiary designations to name the trust, if appropriate, to ensure these assets are distributed according to your estate plan.
Secure Your Assets in Massachusetts: Contact Jordan & White, LLC
A well-designed living trust can safeguard your family, preserve your assets, and provide peace of mind. At Jordan & White, LLC, we work closely with married couples in Massachusetts to create personalized estate plans that reflect their values and goals.
Let’s secure your family’s future together. Call us at 978-744-2811 to schedule a consultation.