Irrevocable Trust and YouTrust can be a mysterious concept.  While many of us have heard of a trust, we may not understand the different types and how they may be advantageous for our circumstances.  One key consideration when planning a trust is whether it will be revocable or irrevocable.  In many cases, when an irrevocable trust is a properly created, it can provide significant tax savings and be a means for having more control over the distribution and use of the trust assets.  Here is what you should consider about irrevocable trust and you:

What is an Irrevocable Trust?

A trust is a legal device which allows someone to transfer their assets to the trust where they will be managed by a named trustee for the benefit of beneficiaries.  By making this transfer the person who owned the assets and created the trust will have surrendered their ownership.  The trustee will then have legal title to the assets and will have responsibilities regarding safeguarding and managing them.   When a trust is irrevocable, this will mean that in most cases the person who created the trust cannot remove the assets or change the trust terms.  However, in some situations, the creator will be allowed to receive income from the trust assets.

The Benefits of an Irrevocable Trust

Irrevocable trust have certain protections which are not available with other kinds of trust.  For example, placing assets in this kind of trust offers protection from estate taxation.  Another benefit is the assets placed in a properly created irrevocable trust are no longer the creator’s property and therefore will not be reachable by their creditors. Additionally, when the trust is set up, the trust creator can make specific decisions about how the trust assets will be distributed and used by the beneficiaries.  By being in this position, the creator can have more control over how the assets can be used in the future than they would have if they were left through a will.   Additionally, when trust assets are correctly allocated to an irrevocable trust, they will be excused from being part of the calculation for income-specific programs such as Medicaid.

There are different kinds of irrevocable trusts and determining which type is appropriate for you can be complicated.  Further, it is critical that you ensure that the trust is prepared in a manner which supports your goals.  Therefore, it will be important that you consult with a qualified and experienced attorney in order to ensure you have the right trust and that it has been created in a manner which benefits you.

Our office has experienced and knowledgeable estate planning attorneys who can help you explore your options and decide which type of estate planning tools will work best for you. Please contact us online or by phone if we may be of assistance.

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