What You Need To Know About Irrevocable Trusts in MA

If you’ve considered creating a trust as part of your estate plan, you should learn more about irrevocable trusts in MA. Irrevocable trusts allow you to leave behind an inheritance that bypasses probate for your loved ones while offering asset protection during your lifetime. Read on to learn more about irrevocable trusts in Massachusetts.

How Is an Irrevocable Trust Different From a Revocable Trust?

Both irrevocable and revocable trusts bypass probate after you pass away. However, in a revocable trust structure, you, as the grantor or settlor (the person who creates the trust), can name yourself the trustee (the trust manager) or a beneficiary.

In an irrevocable trust, the grantor cannot be the trustee. The grantor can be a beneficiary of the trust during their lifetime in certain circumstances, depending on the type of trust.

If you choose a revocable trust, you can transfer assets into or out of the trust, change or revoke the trust agreement, and add or remove beneficiaries. However, even if you transfer assets into the trust, the state recognizes your control of the assets, and creditors can pursue those assets to settle debts or claims.

Irrevocable trusts in MA protect assets by removing them from your legal control. By transferring your assets into an irrevocable trust, creditors and other claimants can no longer pursue those assets during your lifetime. Irrevocable trusts can also remove tax liability from the value of your estate.

What Types of Irrevocable Trusts Exist?

An irrevocable trust is an important estate planning tool for cash, accounts, investments, real estate, and other valuable assets. Several irrevocable trusts allow you to pursue specific goals for your assets. Some offer better tax benefits, others offer stronger asset protection, and still others protect assets from Medicaid estate recovery.

Irrevocable trusts can include:

  • Special needs trusts. These trusts allow parents or family members of a person with special needs to leave them an inheritance without interfering with their eligibility for government assistance.
  • Medicaid planning trusts. A Medicaid planning trust can help reduce your assets without spending down everything you own, allowing you to leave an inheritance for your loved ones. You can also protect your home from estate recovery.
  • Irrevocable life insurance trusts (ILITs). If you have a life insurance policy, you can transfer it into an ILIT and name the trust as the beneficiary. When you pass away, the trust receives the proceeds, and the trustee can distribute funds to your beneficiaries according to the trust agreement.

You should speak with an experienced estate planning attorney to discuss your goals and determine the right type of irrevocable trust.

Contact an Experienced Estate Planning Attorney in Massachusetts

If you’re considering the different types of irrevocable trusts in MA, reach out to Jordan & White, LLC, in Danvers, MA. Call today at (978) 744-2811 or fill out the firm’s online contact form to schedule a consultation with an experienced estate planning attorney and learn more about what kind of irrevocable trust would best suit your needs.