A trust is a legal tool where a person, often called the “grantor” or “settlor”, transfers assets from their own personal ownership to ownership by a “trust” where those assets are managed by a trustee on behalf of certain beneficiaries as designated by the grantor of the trust. Trust property can include anything from cash to stocks to real estate. Real estate trusts are useful tools for protecting the assets held and avoiding eventual probate court proceedings. Trusts can be created either as revocable or irrevocable trusts; in Massachusetts trusts are presumed to be revocable unless the language of the trust clearly states that the trust is irrevocable. It is quite common for an original grantor of a trust to also be a trustee and beneficiary of a revocable trust; these types of trust are also commonly known as a “living trust” and provide the grantor flexibility to make changes and take assets out of the trust later.

There are several different reasons to create a real estate trust, and the trust can be tailor-made to fit with your general estate planning objectives, including:

• Avoiding probate; pass property to next generation more easily
• Protect property from creditors
• Qualify for public benefits like Medicaid and MassHealth
• Protect beneficiaries from their own poor spending habits
• Provide better management of property
• Determine who will manage your property in the event of your incapacity

Avoiding probate of your assets upon death is perhaps the most common reason for creating a trust. The probate process can be a long, expensive, and public process where an executor is appointed, and a court oversees the transfer of your assets based on the terms of your will or the laws of intestacy for any property or assets you have that were not accounted for in your will. Placing your house in a trust allows you to skip probate and pass the house to the next generation outside of the court system in a way that is much faster and inexpensive than the probate process for a will. Keeping your house in a revocable is often a good option if you anticipate selling the house later. By contrast, an irrevocable trust cannot be changed by the grantor after it is created but can provide income benefits to the grantor for the duration of their life, while also shielding the house and other assets from creditors or from its value being counted for purposes of public benefit qualifications as you age.

Whatever your estate planning needs are, D’Ambrosio LLP provides extensive services with all types of trusts and can help craft a trust to meet your specific needs and objectives. Feel free to contact us with any questions.