Tag Archive for: Revocable Trust In Massachusetts

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.

Does A Revocable Trust Protect My Assets From Nursing Home Costs In Massachusetts?

Does A Revocable Trust Protect My Assets From Nursing Home Costs In Massachusetts?

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As estate planning attorneys serving Gloucester, Rockport, Manchester by the Sea, Beverly, and all of the North Shore, we are often asked whether creating a revocable trust can shield assets from nursing home expenses. Many Massachusetts residents set up revocable trusts to avoid probate and keep their estate plans private. While these trusts can be excellent tools for estate administration, they do not provide protection from long-term care costs.

Under Massachusetts law, MassHealth (the state’s Medicaid program) counts the assets in a revocable trust as available resources when determining eligibility for nursing home benefits. This means that if you can amend, revoke, or access the assets in the trust, those assets will be treated as yours for eligibility purposes. A revocable trust does not remove the property from your financial control, so it remains subject to spend-down requirements before MassHealth coverage begins.

How Massachusetts Law Treats Revocable Trust Assets

Massachusetts General Laws Chapter 118E governs the administration of MassHealth. When reviewing an application for long-term care benefits, the program evaluates both directly owned assets and those in certain trusts. According to 130 CMR 520.023(C), any principal in a revocable trust that can be paid to or for the benefit of the applicant is considered a countable asset.

This means that if you place your home, bank accounts, or investments into a revocable trust, they will still be counted toward the $2,000 asset limit for MassHealth eligibility. The reason is simple: as long as you retain the ability to revoke the trust and reclaim the assets, they are legally considered available to you.

Why Revocable Trusts Are Still Valuable

While revocable trusts do not protect against nursing home costs, they are still a critical part of a comprehensive estate plan. They allow your chosen successor trustee to manage your assets without court involvement if you become incapacitated, and they ensure a smoother transition of property after your death by avoiding probate.

A revocable trust can also coordinate with other planning strategies, including irrevocable Medicaid trusts, to create a balance between accessibility and asset protection. The key is knowing when and how to use each tool.

Asset Protection Requires Irrevocable Planning

If the goal is to protect assets from nursing home costs, an irrevocable trust is usually the appropriate structure. In an irrevocable trust, you permanently transfer ownership of the assets to the trust, and you cannot take them back. Under 130 CMR 520.019, assets placed into an irrevocable trust are generally not countable for MassHealth eligibility purposes after the five-year look-back period has passed.

The timing is critical—transferring assets into an irrevocable trust within five years of applying for MassHealth can trigger a disqualification period. This is why advance planning is so important for anyone concerned about long-term care costs.

Working With An Attorney To Coordinate Your Plan

We regularly advise clients in Essex County who already have a revocable trust but also want to protect assets from the high cost of nursing home care. In many cases, the best solution is to maintain the revocable trust for probate avoidance and create an irrevocable trust for Medicaid planning. Each client’s needs, assets, and family circumstances are unique, so we tailor the approach to the individual situation.

Having both types of trusts, coordinated properly, can ensure that your estate plan works for incapacity, probate, and long-term care protection.

Massachusetts Revocable Trust Frequently Asked Questions

Does A Revocable Trust Protect My Home From Nursing Home Costs In Massachusetts?
No. If your home is in a revocable trust, MassHealth will treat it as an available asset because you retain the power to revoke the trust and reclaim ownership.

What Is The Difference Between A Revocable Trust And An Irrevocable Medicaid Trust?
A revocable trust can be changed or canceled at any time and does not protect assets from MassHealth. An irrevocable Medicaid trust cannot be altered once created and, after five years, can protect assets from nursing home costs.

Can I Convert My Revocable Trust Into An Irrevocable Trust For Medicaid Planning?
In most cases, yes, but doing so is considered a new transfer of assets. This means the five-year look-back period will start from the date of conversion, potentially delaying MassHealth eligibility.

Will MassHealth Take All My Assets Before Providing Benefits?
MassHealth requires that you spend down countable assets to $2,000 or less (for an individual) before it will provide long-term care coverage. Certain assets, like a primary vehicle or some personal belongings, may be exempt.

Does Transferring My House To My Children Protect It From Nursing Home Costs?
Not immediately. Transfers within five years of applying for MassHealth can trigger a penalty period. It’s often safer to use an irrevocable trust rather than an outright transfer.

Is It Too Late To Protect Assets If I’m Already In A Nursing Home?
Options are more limited after entering a nursing home, but there may still be legal strategies to protect some assets for a spouse or other family members. Immediate legal advice is crucial.

Why Do People Still Use Revocable Trusts If They Don’t Protect Against Nursing Home Costs?
Because they provide excellent probate avoidance, privacy, and incapacity management benefits, making them a valuable part of a complete estate plan.

Does Putting My Assets In A Revocable Trust Affect My Taxes?
No. For income tax purposes, assets in a revocable trust are still treated as yours. You report income the same way as before creating the trust.

Can I Keep Both A Revocable And Irrevocable Trust?
Yes. Many people use a revocable trust for flexible estate management and an irrevocable trust for Medicaid planning, ensuring both convenience and protection.

When Should I Start Medicaid Planning In Massachusetts?
Ideally, at least five years before you anticipate needing nursing home care. This allows transfers to an irrevocable trust to fall outside the MassHealth look-back period.

Call Troy Sullivan Firm Today For a Free Consultation

At The Sullivan Firm P.C., we help individuals and families throughout Gloucester, Rockport, Manchester by the Sea, Beverly, and across the North Shore create estate plans that work for both life and long-term care needs. If you have a revocable trust and are concerned about nursing home costs, we can guide you on how to integrate Medicaid planning into your existing strategy.

Call The Sullivan Firm P.C. Today At 978-325-2721 For A Free Consultation. Our law offices are located in Gloucester, Massachusetts, and we proudly serve clients in all of Essex County.