Revocable and Irrevocable Trusts

Revocable Trusts—also known as a “living trust”. It functions in the same manner as a will by specifying who will receive your property when you die. A revocable trust has supplementary functions, however. In addition to setting out who will receive your property, it dictates when they receive it as well as where, how, and why. For instance, a revocable trust can provide that the assets are to be used solely for college expenses if your children are accepted to an accredited university, or it can create a schedule for distributing your assets based on the age of your heirs. Further, the trust has the monumental benefit of avoiding probate (if properly funded) and can be structured to protect your beneficiaries from future creditors, bankruptcy and divorce. You can amend the trust at any time and will have full access to it during your lifetime.

Irrevocable Trusts—for clients with sizable estates, it may be most beneficial to create an irrevocable trust which can shield the estate from creditors and taxation. Irrevocable trusts, unlike revocable ones, cannot be amended once established and you cannot access the assets once placed in the trust. There are, however, limited means of changing dispositive provisions. Irrevocable trusts can be complex and require the assistance of a knowledgeable estate planning attorney to ensure your assets receive as much protection as possible.

Irrevocable Medicaid Trusts—with healthcare costs soaring, many elderly individuals will invariably require Medicaid, also called MassHealth. By creating a Medicaid Trust, or an Irrevocable Income Only Trust, you can protect your assets and your home, passing your legacy along to your family.

Providing Trustees with Assistance During This Difficult Time

Once an estate is created by its grantor, it must be managed by a qualified administrator.  The trustee oversees the investment of funds and distribution of assets in accordance with the grantor’s directives, as set out in the trust document.  Trustees face a difficult task—they are confronted with numerous responsibilities, often at a time when they are mourning the loss of a loved one.  They can also be held liable for mistakes made that result in financial losses to the trust.  For these reasons, it is essential that trustees retain the assistance of skilled, ethical, and detail-oriented estate planning attorneys.

BK Estate Planning Attorneys offers sound advice to trustees to ensure their compliance with the law and their strict adherence to the terms of the trust.  We also help to maintain the fiscal strength of the trust and to preserve your legacy.

Often, the successor trustee is called upon to manage the trust due to either the death or debilitating illness of the creator of the trust.  The trustee therefore becomes burdened with the stress of administering the trust during a difficult and overwhelming time.  At the same time the trustee is being forced to make critical decisions, he or she may also be in the midst of informing friends and relatives of the grantor’s death, making funeral arrangements, writing an obituary, closing bank accounts and paying off debts, and liquidating real estate or other assets.

An estate planning attorney can help make the entire trust process manageable by guiding you through the administration requirements and allowing you time to grieve the loss of your loved one.  At BK Estate Planning Attorneys, our team understands the pain associated with any loss and will do all we can to ease it.

Assisting You in the Event the Grantor Becomes Incapacitated

When the grantor becomes incapacitated, ether physically or mentally, such that he or she is no longer able to handle the affairs of the trust, the successor trustee will be forced to intercede.  The first necessary step will be locating and reviewing the trust document.  You should then notify all beneficiaries of the grantor’s incapacity.

You will need a certificate of trust prepared, which is a shortened version of the trust that proves you have legal authority to act on the trust’s behalf. Depending on how the trust is drafted you may also need to obtain documentation by a physician of the grantor’s incapacity.

You should ensure the grantor is receiving the medical care required in a supportive environment.  The health care proxy should be notified of the grantor’s condition, and physicians should receive copies of all health care documents.  It is best to review the grantor’s insurance as well and garner an understanding of its limits.

The next crucial step is gathering a thorough understanding of the trust’s assets.  You will now be responsible for investment of trust funds in a prudent and conservative manner.  By utilizing a team comprised of at least an attorney, accountant, and financial advisor, you can make practical decisions on the investment of these funds.  You will always want to maintain a careful record of expenses paid and investments made, as you may be required to send this information to the beneficiaries.

Managing a trust on behalf of beneficiaries is a daunting task, one for which you can be held personally liable.  The assistance of a knowledgeable estate planning attorney is vital.  At BK Estate Planning Attorneys, we have extensive experience assisting trustees in the management of the trust.  We can help ensure your compliance with the terms of the trust and maintenance of the trust’s fiscal integrity.

Offering Guidance Upon the Death of the Grantor

When the grantor of a trust passes away, the trustee then becomes responsible for dispersing the trust in accordance with its terms.  The trustee is legally required to notify not just the beneficiaries, but also the intestate heirs, or individuals who would inherit under Massachusetts law in the absence of a will or trust.  You must notify these individuals of 1) the existence of the trust; 2) their right to receive a copy if requested; 3) their right to contest the trust within 120 day of receipt of notice.

The next crucial step is taking an inventory of the trust’s assets.  The assets must be invested in a prudent manner if they are not to be dispersed immediately.  You must make the trust property productive of income, and can be liable for failure to do so.  Creditors should be notified of the grantor’s death and trust’s existence.  Taxes must be filed and paid.  It is critical that you keep an exact accounting of all bills paid and investments completed, as the beneficiaries will have a right to this information.  You must treat all beneficiaries impartially and show no self-interest if you are a beneficiary as well.

If the trust calls for total distribution of the assets, you must so disperse the assets after a final inventory has been conducted and all bills remunerated.  Distribution must be in precise accordance with the terms of the trust and may involve transferring titles and liquidating assets.

Administering a trust after the death of a loved one can be bewildering, time-consuming, and overwhelming.  At BK Estate Planning Attorneys we guide trustees seamlessly through the trust administration process, allowing you to grieve the loss of your loved one without having to deal with unnecessary burdens.