Creating an estate plan requires you to take an account of all your assets so you can determine who you will pass each one down to. Some people can do this through their will, but others may opt to use a trust.
One type of trust that you may come across is an irrevocable trust. This is a trust that can’t be changed or canceled unless you can obtain the permission of the beneficiaries or the court. You’ll create the trust and then fund it. Once it’s funded, the assets within it are controlled by the trustee.
What are the benefits of an irrevocable trust?
There are several valuable benefits to using an irrevocable trust to get assets to your loved ones. Since you don’t control the assets, your creditors can’t seize the contents of the trust to satisfy debts or judgments against you. This ensures that your loved ones will get as much of their inheritance as possible.
Another benefit is that the assets in the trust aren’t considered part of the estate. This can help to save the estate money on taxes, which is especially important if the estate is a high-value estate.
These trusts also enable your beneficiaries to have privacy. Trusts don’t have to go through the probate court, so the terms aren’t recorded as part of the public record. This can also help them to get their inheritance as quickly as possible.
Working with someone who understands your wishes and how trusts function may be beneficial. This can make it easier to get everything set up in the proper manner.