There are many different items and strategies you might use inside your financial planning tool kit. Far too many people brush off using revocable trusts because of the perception that trusts are only for the rich and famous.
Since so many people do not have a taxable estate under the new federal estate tax exemptions, reducing or avoiding estate tax is not a primary focus for most. Note that in Massachusetts, however, the state estate tax is still a real issue for many residents.
Trusts can also do so much more than just help minimize taxes. In fact, trusts can be a powerful foundation of an appropriate estate plan regardless of the level of someone’s assets.
One of the most useful trusts is a revocable one, which means that you as the grantor can create it, fund it and manage it over the course of your lifetime. You can reclaim the assets and revoke the trust at any point in time or could adapt and amend the document over the course of your life to achieve different financial planning goals.
Remember that you don’t need a bank or a trust company as a trustee. Trustees can be friends, family members, or even your attorney, so long as the chosen person is comfortable with serving in this role.
Assets that are put inside a revocable trust are not a gift since they can be reclaimed at any time and you as the grantor maintain unrestricted access to the property. Trusts require specific setup steps to accomplish the underlying purpose.
Scheduling a time to talk with an estate planning lawyer is one of the most important steps you can take to protect yourself with a trust.
