What is an irrevocable trust?
An irrevocable trust may not be altered or terminated with court permission. They are often, but not always done to take advantage of favorable tax laws. Other commonly used Trusts are: Charitable Trusts and Special Needs Trust (established so a disabled person can receive financial assistance without jeopardizing government benefits.) You can set up trusts to provide for minor children, to reduce taxes, manage and protect assets, avoid probate, etc. There are many different types of trusts that can be used to fit your needs and reach your goals. Whether any certain trust makes sense depends on your individual circumstances. The qualified Attorneys at Hughes Estate Group can walk you through the ins and outs of estate planning and explainyour options. Important Estate Planning Tools Financial Powers of Attorney – Giving some one a power of attorney is an important decision and a powerful estate planning tool. These powers allow one or more persons to act as an agent on your behalf. The
An irrevocable trust cannot be cancelled or changed by the person creating it, formally known as the grantor. • A trust is established by executing a trust agreement and funding the trust with specific assets. • The grantor names at least one trustee to manage the assets in the trust. • The grantor also names at least one beneficiary to receive assets from the trust. • The trustee is responsible for managing and disbursing trust property according to the instructions in the document. Three situations that can prompt the formation of an irrevocable trust • A revocable living trust becomes irrevocable upon the death of the grantor(s). • A trust is established and funded during the grantor’s life and designated as irrevocable. • An irrevocable trust is created upon the grantor’s death and funded with specific assets from the gra’s estate. This type of trust is known as a testamentary trust. REVOCABLE LIVING TRUST ACCOUNT What is a Revocable Living Trust? A revocable living trust allows th
An irrevocable trust is a trust which cannot be altered without the involvement and consent of the beneficiary, in contrast with a revocable trust, which can be changed by the grantor. There are some definite advantages to setting up an irrevocable trust, but there are also some very serious disadvantages which people should consider before establishing such a trust. It is also important to use the services of a skilled legal professional when writing up the documents which pertain to the trust, to ensure that it is established appropriately. When a grantor creates an irrevocable trust, he or she gives up control of the assets in the trust. This creates a totally separate tax entity, because the trust is not controlled by the grantor, and it is not yet controlled by the beneficiaries, either. The trust pays its own taxes, and it is usually administered by a trustee. Giving up one’s assets might not seem to have any particular advantages at first glance. However, one of the convenient t
An Irrevocable Trust is a legal document which cannot be amended or “revoked” once created. Irrevocable trusts offer tax advantages that revocable trusts do not. Irrevocable Trusts are often used to own life insurance policies to keep the life insurance proceeds out of an insured’s estate for estate tax purposes. Irrevocable Trusts are also used to make tax efficient gifts for the future benefits of one’s heirs – such as a Grantor Retained Annuity Trust or a Charitable Remainder Trust.
