Worcester & Westborough Living Trust Lawyer

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A living trust is an essential part of a comprehensive estate plan. Unlike a will, which only becomes effective upon death, a living trust can be created while the settlor (the individual who creates the trust) is still alive. Living trusts are divided into revocable and irrevocable. There are a number of benefits to both types, although each has its own disadvantages and limits as well. If you have concerns about what will happen to your estate upon your death, and how to ensure your family’s financial needs are cared for, it’s time to talk with SederLaw’s Estates & Trusts attorneys.

What Is A Living Trust?

In general, a trust is a legal instrument created by a settlor (sometimes called a grantor), into which property and assets are transferred. The property transferred into the trust is managed by an individual (known as a trustee) and is managed for the benefit of third parties (known as beneficiaries). The trust contains certain rules and restrictions for how the property is to be handled.

A living trust is called such because it is created while the settlor is still alive. The settlor will choose which individual will serve as trustee and successor trustee. There are numerous reasons to create a living trust, including:

  • Setting aside property and assets for minor children or beneficiaries who are inexperienced or unable to handle their own financial matters
  • Avoiding the costly and time-consuming probate process
  • Potentially reducing estate taxes (more on this below)
  • Keeping certain financial details private, because, unlike a last will and testament, the details of a trust are generally not made public

Living Trust: Two Different Types

Living trusts are either revocable or irrevocable. Revocable means the trust can be revoked or changed. With a revocable trust, the settlor retains full control over the assets. Upon the death of the settlor, the trust assets bypass probate and are distributed directly to beneficiaries named in the trust.

An irrevocable trust, on the other hand, cannot be changed or revoked once it is created. Property and assets are permanently transferred into the trust and are therefore no longer owned by the settlor. A revocable trust becomes irrevocable once the settlor dies.

Advantages And Disadvantages Of A Revocable Living Trust

Both types of living trusts have their own benefits and drawbacks. For a revocable living trust, you should consider the following:


Retains control. The primary difference between the two trusts is whether the settlor can control the trust property. With a revocable trust, the settlor retains full control of the assets. They can be moved in and out of the trust, and the settlor can buy and sell property from the trust as circumstances require. Also, the terms of the trust can be changed at any time.

Flexibility during disability or incapacity. The ability to control assets in a revocable living trust allows the settlor to continue to manage those assets in the event he or she becomes disabled. The same is true if the settlor becomes legally incapacitated due to cognitive limitations. Assets transferred into the revocable trust will continue to be managed by the trustee (or successor trustee). Without this instrument, an individual would either need a durable power of attorney or a court order to authorize someone to manage assets for the settlor’s benefit.


Taxes. Although revocable trust assets can bypass probate, they are still subject to state and federal estate taxes. That’s because the settlor still has control over the trust assets, and in the eyes of the law, they will continue to be included in that person’s estate for tax purposes.

No protection from creditors. The flexibility of revocable trusts can be a disadvantage. Because of the settlor’s ability to control trust assets, they will not be protected from the claims of certain creditors.

Advantages And Disadvantages Of A Irrevocable Living Trust

Asset control is the primary distinguishing feature between revocable and irrevocable living trusts. Here are some pros and cons of irrevocable trusts:


Taxes. An irrevocable trust can remove assets from your estate and thereby reduce the amount of taxes your estate will pay. This feature is especially beneficial with respect to appreciable assets like real estate and stocks. This allows for savings with respect to capital gains taxes.

Asset protection. These types of trusts are generally more secure from the claims of creditors. Because the assets are no longer considered the property of the settlor, creditors are usually unable to seize them. Also, placing assets in an irrevocable trust means they will not be counted for purposes of MassHealth eligibility. This allows an individual to qualify for the health program without having to deplete his or her resources.


Lost control. Since the irrevocable living trust cannot be altered or revoked, the settlor loses control over the assets placed in it. The settlor may have some indirect control if he or she chooses a close family member or friend as trustee. However, this should be undertaken with the counsel of an experienced estate planning attorney.

Limits ability to adapt. Unlike a revocable trust, assets placed in an irrevocable trust cannot be removed later. This limits the ability to plan for future events like disability and incapacity. As previously mentioned, an individual can use an irrevocable trust to qualify for MassHealth without depleting the assets placed in the trust. But there is a five-year lookback window, meaning this must be done at least five years before qualifying for the program.

Contact Our Worcester Living Trusts Attorney

Estate planning is a process that cannot be completed without consideration of a living trust. Depending on your particular goals, a revocable or irrevocable living trust may be better. A knowledgeable Estates & Trusts attorney can guide you in creating an estate plan that gives you peace of mind, saves money, and provides for you and your family. To learn more, contact SederLaw today.