Trusts Attorneys in West Warwick, Rhode Island
A trust is a legal property interest held by one person for the benefit of another. The person who holds the legal property interest is the trustee. The person for whom the property is held is the beneficiary. The person establishing the trust is called the grantor. A trust can be revocable or irrevocable.
Revocable trusts may be changed or terminated by the grantor at any time and for any reason
Irrevocable trusts, once established, cannot be terminated or altered by the grantor for any reason
Trusts may be inter-vivos (living) or testamentary. Inter-vivos trusts are made while the grantor is still alive, while testamentary trusts are created by the grantor’s will and do not come into effect until his or her death.
Trusts allow trustees to direct or control property or other legal rights that are in the trusts. A trustee has a legal duty to make decisions regarding the trust property in the best interests of the beneficiary. Trustees can be held liable for any misuse or mismanagement of trust assets.
There are many different types of trusts which are designed for particular situations. At the Law Office of Devane, Fogarty & Ribezzo we can help inform you to allow you to make the decision of whether a trust is right for you.
Revocable Living Trusts
Revocable living trusts are similar in form and substance to wills. These instruments allow the creator (the testator) to transfer the title of ownership of property to the trust. During life, the testator can (and often does) remain in control of his or her assets, with the ability to sell, buy or transfer property as he or she wants. The trust also can be changed or terminated at any time by the testator.
Upon death, the property in the trust does not become part of the probate estate because title to the property is owned by the trust, not the decedent. The trustee designated in the revocable living trust will then be in charge of administering the trust and distributing property to the beneficiaries in accordance with the terms of the instrument.
Many people use revocable living trusts as a way to limit the amount of property subject to probate. Revocable living trusts are often advertised as a way to avoid probate altogether, but often they are coupled with a will that disposes of any property not specifically named in the trust.
Protection of Vulnerable Loved Ones
Special-needs trusts (also called supplemental-needs trusts) are vehicles that let us put money or assets into trusts to benefit loved ones with special needs without compromising their eligibility for governmental benefits.
Spendthrift trusts can provide support for beneficiaries who are not necessarily incompetent, but who have trouble with money management. Generally, these trusts cannot be reached by the beneficiaries’ creditors and the beneficiaries’ interests are protected from transfer.
Other Estate Planning Tools
In addition to trusts and wills, other estate planning instruments or tools you may use to execute your wishes or allow for management or your affairs or those of a loved one include guardians, special will provisions, and powers of attorney.
Guardians are people given power and responsibility by courts to meet the personal and financial needs of incompetent people. You can petition the court for your own appointment or for that of someone else to look after your incompetent loved one.
Special will provisions can be made to appoint guardians for our children and to help them manage their inheritances should we die while they are still minors. Particular planning tools can also protect our bequests to loved ones with disabilities.
Powers of attorney allow you to designate another person to make decisions on your behalf or to execute your financial plans. Powers of attorney are normally used to designate someone to make financial and legal decisions for you, but you can determine the type and scope of the power in the document. Special or Limited Powers of attorney can be designed to narrow the scope of authority conveyed. Designees can be either be named to act for us in financial matters now or in the future should we become medically incapable of doing so ourselves.
Medical Planning
Living wills are binding legal documents wherein we can provide instructions for our doctors and relatives about what medical treatment, especially life-sustaining procedures, we want (or inversely do not want) if we become incapacitated or otherwise unable to communicate our wishes.
Powers of attorney for healthcare allow us to designate health care agents such as spouses, partners, children or other trusted persons to make medical decisions for us under emergency circumstances or if you become incapacitated and cannot make the decisions for yourself.
Conclusion
It is best to begin your estate plan sooner rather than later. It is important to remember that wills, trusts and other estate planning documents can be modified one or more times to reflect changes in your life.
In estate planning and probate, federal law can come into play, especially in the area of taxation, but most legal issues are governed by state law.
It is important to consult with a knowledgeable attorney in your state to understand your options. You owe it to yourself and your loved ones to use probate and estate planning tools to provide a safety net for the future in case of incapacity or upon your death.