There are several non-tax reasons for utilizing trusts such as asset protection; avoiding probate; creditor protection; protection for the surviving spouse and children in the event the surviving spouse remarries; control and management of assets for spendthrifts, minors and those disabled; and avoiding ancillary probate for real estate owned in another state. Moreover, living trusts are private (not public) documents and notice of the trust assets and accountings need be given only to the interested parties.
Example: Mr. and Mrs. Whitman have "I love you" wills whereby they leave everything to each other and they each have a taxable estate of $2 million (a total of $4 million). Mr. Whitman dies and Mrs. Whitman remarries. She and her new husband have a verbal agreement that at their deaths their respective assets will go to their respective children by prior marriages. Mrs. Whitman’s estate plan leaves her $4 million to her children. However, after her death, Mrs. Whitman's new husband waives her Will and claims a forced share (also referred to as "elective share" and "statutory share"). Under Massachusetts law, assuming there is no valid and enforceable prenuptial or separation agreement and one of Mrs. Whitman's lineal descendants survived her, the new husband's forced share is 1/3 of Mr. and Mrs. Whitman's $4 million (the first $25,000 outright and a life estate in the remainder). In contrast, if Mr. and Mrs. Whitman had credit shelter trusts to minimize estate taxes, the new husband's forced share is 1/3 of her $2 million (again, the first $25,000 outright and a life estate in the remainder).
Nothing in this blog should be considered legal advice as this is a complicated area of the law.
The author Brigitte von Weiss of VON WEISS LAW OFFICE is an estate planning lawyer and elder law attorney serving clients in Easton, MA, as well as nearby towns and cities, including Abington, MA, Attleboro, MA, Avon, MA, Bridgewater, MA, Brockton, MA, Canton, MA, East Bridgewater, MA, Foxboro, MA, Mansfield, MA, North Attleboro, MA, Norwood, MA, Norton, MA, Plainville, MA, Randolph, MA, Raynham, MA, Rehoboth, MA, Rockland, MA, Sharon, MA, Stoughton, MA, Walpole, MA, West Bridgewater, MA, and Whitman, MA.
Brigitte, a graduate of Boston College School of Nursing and an honors graduate of Loyola University of Chicago Law School, stands out from other elder law and estate planning attorneys in that she worked as a registered nurse for four years and earned a Master of Science in Taxation with high distinction from Bentley College. This unique combination of legal, nursing and taxation backgrounds enables Brigitte to provide outstanding legal guidance to her clients in their time of need. Call (508) 238-3005 for a free phone conversation with Brigitte to learn if she can help. You also may reach her through her website at www.vonweisslaw.com.