Special Needs Trusts In Massachusetts

Special Needs Trusts In Massachusetts: How To Protect Benefits And Provide Care

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Families caring for a loved one with disabilities face unique estate planning challenges. Providing financial support is essential, but direct gifts or inheritances can unintentionally disqualify a beneficiary from critical public benefits. In Massachusetts, special needs trusts are a powerful planning tool that allows families to provide care and financial security without jeopardizing eligibility for programs such as SSI and MassHealth.

Why Traditional Inheritances Can Cause Serious Problems

Many public benefit programs impose strict income and asset limits. If a person with disabilities receives an inheritance outright, even a modest amount can result in the loss of benefits. Once benefits are lost, requalifying can be difficult and time-consuming.

Well-meaning family members often create these problems unintentionally by naming a child with disabilities directly in a will, life insurance policy, or retirement account.

What A Special Needs Trust Does

A properly drafted special needs trust holds assets for the benefit of a person with disabilities without giving them direct ownership. The trust is managed by a trustee who uses trust funds to supplement, not replace, public benefits.

Funds may be used for:

  • medical and dental care not covered by insurance
  • therapy and rehabilitation
  • education and vocational training
  • transportation and specialized equipment
  • recreation and quality-of-life expenses

Because the beneficiary does not control the assets, eligibility for benefits is preserved.

Types Of Special Needs Trusts In Massachusetts

Massachusetts recognizes several forms of special needs trusts, including:

  • Third-party special needs trusts, funded with assets belonging to parents or relatives
  • First-party special needs trusts, funded with the beneficiary’s own assets, such as personal injury settlements
  • Pooled trusts, managed by nonprofit organizations for multiple beneficiaries

Each type has different legal requirements, tax implications, and restrictions. Choosing the wrong structure can result in benefit loss or repayment obligations.

Choosing Trustees And Planning For Long-Term Care

Selecting the right trustee is critical. Trustees must understand benefit rules, reporting requirements, and proper distributions. Many families choose professional or co-trustees to ensure long-term compliance.

Special needs planning also involves coordinating guardianship, health care proxies, and successor planning so care continues seamlessly if parents are no longer able to assist.

Call Troy Sullivan For Special Needs Planning

Protecting a loved one with disabilities requires careful legal planning. At The Sullivan Firm P.C., we help Gloucester and North Shore families create special needs trusts that preserve benefits while providing meaningful support and long-term care. Call 978-325-2721 to schedule a consultation and discuss a special needs trust tailored to your family’s situation.

Who Should Have A Revocable Trust In Massachusetts?

Who Should Have A Revocable Trust In Massachusetts?

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As estate planning attorneys serving Gloucester, Rockport, Manchester by the Sea, Beverly, and across the North Shore, we are often asked whether a revocable trust is the right choice. While not every Massachusetts resident needs one, many families benefit greatly from including a revocable trust in their estate plan. A revocable trust allows you to keep control over your assets during your lifetime while also making it easier for your chosen beneficiaries to receive them after your death—without the delays and costs of probate.

Under Massachusetts law, trusts are governed in part by the Massachusetts Uniform Trust Code, found in Massachusetts General Laws (M.G.L.) Chapter 203E. A revocable trust—sometimes called a living trust—lets you change, amend, or revoke it during your lifetime. This flexibility makes it appealing for many people who want both control and convenience. However, the decision to have one depends on your goals, assets, and family situation.

Avoiding Probate And Maintaining Privacy

One of the primary reasons people create a revocable trust is to avoid probate. Probate in Massachusetts is governed by the Massachusetts Uniform Probate Code (M.G.L. c.190B). Even with simplified procedures, probate can be time-consuming and public. Assets held in a properly funded revocable trust bypass the probate process entirely, allowing for faster distribution to beneficiaries and maintaining your family’s privacy.

For those with real estate in multiple states, a revocable trust can help avoid the need for separate probate proceedings in each state. This is especially beneficial for Massachusetts residents who also own vacation homes in other parts of the country.

Planning For Incapacity

A revocable trust is not just about what happens after death—it also plays a role during your lifetime. If you become incapacitated, your successor trustee can step in and manage trust assets without the need for a court-appointed guardian or conservator. This can save time, money, and stress for your loved ones. Under M.G.L. c.203E § 602, you retain the power to revoke or amend the trust while competent, but the document can name a trusted person to act if you cannot.

Who Should Strongly Consider A Revocable Trust

While anyone can have a revocable trust, it is especially beneficial for:

  • Homeowners – Particularly if you own your home in Gloucester, Rockport, Manchester by the Sea, or Beverly and want to keep it out of probate.
  • Families With Minor Children – A trust can hold assets for children until they reach a responsible age, avoiding the mandatory distribution at age 18 that happens under intestacy rules.
  • Blended Families – A trust can help ensure your assets are distributed according to your wishes, even in complex family situations.
  • Owners Of Multiple Properties – Especially if you own property in more than one state, avoiding multiple probates is a major benefit.
  • Those Seeking Privacy – Probate records are public, but a trust’s terms remain private.

Funding The Trust Is Essential

Creating a revocable trust is only the first step. It must be funded—meaning you must transfer ownership of assets into the trust’s name. Real estate deeds must be updated, and accounts retitled. Failure to fund the trust could mean those assets still go through probate, undermining one of the trust’s biggest advantages.

Massachusetts law recognizes pour-over wills (M.G.L. c.190B § 2-511) that direct assets not already in your trust at the time of death into the trust. This acts as a safeguard but still may involve probate for those assets.

A Coordinated Estate Plan

A revocable trust should work together with other essential documents such as your will, durable power of attorney, and health care proxy. Having a trust without these complementary documents can leave gaps in your planning. Our work with North Shore clients often involves creating a coordinated set of estate planning tools to ensure all aspects of your financial and personal affairs are protected.

Massachusetts Revocable And Irrevocable Trust Frequently Asked Questions

What Is The Difference Between A Revocable And Irrevocable Trust In Massachusetts?
A revocable trust can be changed or revoked during your lifetime, giving you full control over the assets. An irrevocable trust generally cannot be changed once created, which can offer stronger asset protection and tax benefits but less flexibility.

Does A Revocable Trust Help Me Avoid Massachusetts Estate Taxes?
Not by itself. A revocable trust does not remove assets from your taxable estate for Massachusetts estate tax purposes. Other strategies may be needed to reduce estate tax exposure.

Can A Revocable Trust Protect My Assets From Creditors?
No. While you are alive, assets in a revocable trust are still considered your property and can be reached by creditors.

Is A Revocable Trust Public Record In Massachusetts?
No. Unlike a will that is filed with the probate court, a trust generally remains private, which is one reason many clients prefer to use one.

If I Have A Revocable Trust, Do I Still Need A Will?
Yes. A pour-over will ensures that any assets not titled in the trust at your death are transferred into it, preventing them from passing under intestacy laws.

Can I Be My Own Trustee Of A Revocable Trust?
Yes. Most people name themselves as the initial trustee and designate a successor trustee to take over upon incapacity or death.

Does A Revocable Trust Replace A Durable Power Of Attorney?
No. A durable power of attorney is still necessary to handle financial matters outside the trust, such as retirement accounts or other personal transactions.

Will My Retirement Accounts Go Into My Revocable Trust?
Usually, retirement accounts like IRAs and 401(k)s are best left outside the trust, with designated beneficiaries named directly, though there are exceptions that should be discussed with an attorney.

How Does A Revocable Trust Affect My Mortgage?
Transferring real estate into a revocable trust typically does not trigger a due-on-sale clause, but you should confirm with your lender and attorney.

Can A Revocable Trust Help Avoid Guardianship Or Conservatorship Proceedings?
Yes. If you become incapacitated, your successor trustee can manage trust assets without the need for court involvement.

Call Troy Sullivan Firm Today For a Free Consultation

At The Sullivan Firm P.C., we help clients in Gloucester, Rockport, Manchester by the Sea, Beverly, and across the North Shore determine whether a revocable trust fits their needs. We design trusts that work hand-in-hand with your other estate planning documents, ensuring your plan is both effective and enforceable under Massachusetts law.

Call The Sullivan Firm P.C. today at 978-325-2721 for a free consultation. Our offices are located in Gloucester, Massachusetts, and we proudly serve all of Essex County. Let’s discuss your goals and create an estate plan that protects your assets and your family’s future.

Mental Incapacity and Estate Planning

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The common issue of mental incapacity is one of the most important reasons for beginning the estate planning process early. While you may work hard at taking care of yourself, you do not know what the future has in store for you. Estate planning allows you to ensure that your assets are protected and distributed in the manner you choose in the event that you become incapacitated later on in life. The Commonwealth of Massachusetts will not recognize any legal documents drafted or signed by individuals who are mentally incapacitated. A will is one such legal document. Mental incapacitation can occur due to mental illness, coma, physical ailment, or the side effects of prescriptions. Generally speaking, mental incapacitation occurs when you are unable to fully understand the terms of the document that you are signing due to a temporary or permanent mental issue. Mental incapacitation centers around the issue of consent. An individual who is mentally incapacitated cannot consent because they are unable to process decisions. When someone becomes mentally incapacitated, the court can appoint individuals to make decisions for the mentally incapacitated person, such as a health care guardian or financial conservator. In probate, mental incapacity has a specific definition with regards to an individual’s ability to draft a will or otherwise conduct any estate planning. According to the Massachusetts Supreme Judicial Court in Goddard v. Dupree et al., 322 Mass. 247:

[T]estamentary capacity requires the ability on the part of the testator to understand and carry in mind, in a general way, the nature and situation of his property and his relations to those persons who would naturally have some claim to his remembrance; freedom from delusion which is the effect of disease or weakness and which might influence the disposition of his property; and ability at the time of execution of an alleged will to comprehend the nature of the act of making a will.

Putting this in layman’s terms, a testator must have the mental capacity to understand the consequences of drafting a will and how he or she would like to distribute assets in a will. Unfortunately, mental capacity is a grey area in Massachusetts. While an individual who is in a coma cannot under any circumstances contemplate the nature of a will, an individual with a mental illness like bipolar disorder may. By only acknowledging wills of those who are mentally capable of drafting them, the Massachusetts probate courts seek to reduce the number of situations in which individuals use coercion or forgery to create wills for mentally incapacitated testators. If you suspect that someone coerced a loved one to draft a will while your loved one was mentally incapacitated, you need to consult with a qualified probate attorney immediately on how to prove mental incapacity and coercion in court. If you are in the process of drafting a will, it is important that you draft the will with the aid of a skilled probate attorney. The probate attorney can ensure that your will is valid and conforms with Massachusetts law. If you suffer from a disease such as dementia or mental illness that may raise mental capacity concerns, your attorney can assist you with creating a record of mental capacity should any disputes arise after your death. In addition, your attorney can help you create a comprehensive estate plan should you become incapacitated in the future. These additional documents include:

• Health Care Proxy: An agent appointed by you who can make treatment and medication decisions, pay medical bills, and obtain your records.

• Durable Power of Attorney: An agent appointed by you who can make financial decisions while you are mentally incapacitated.

• Advance Medical Directives: Instructions included in a living will that dictate what treatments are or are not permitted.

• Trusts: You can place some of your assets in a trust; develop a plan for how those funds are to be disbursed, to whom, and when; and appoint an individual to administer the trust.

If you or a loved one is or may shortly become mentally incapacitated, you need to consult with a probate attorney immediately on estate planning to avoid any issues regarding medical treatment, financial status or assets. The attorneys at The Sullivan Firm, P.C. have dedicated their careers to helping individuals preserve, protect and provide for their families’ futures. Call The Sullivan Firm, P.C. today at (978) 325-2721 to schedule a free exploratory meeting.

Troy Sullivan, Massachusetts Estate Planning Attorney

The Sullivan Firm, P.C. is a boutique probate and estate planning law firm serving the North Shore and Cape Ann of Massachusetts including Gloucester, Rockport, Manchester and Beverly. The firm concentrates on estate planning matters, including trusts, wills, healthcare proxies, life planning, probate, special needs trusts, and trust administration.