When would an Irrevocable Intervivos Trust be used?
An Irrevocable Intervivos Trust is general used as part of a plan to reduce federal estate taxes. If you desired to make a substantial gift to a minor child and have the gift removed from your taxable estate, an Irrevocable Trust could be used. The minor child would have the option to remove the principal upon age 21 years. The assets transferred would be subject to the provisions of federal gift tax. Any appreciation in value of assets after the transfer to the trust would not be subject to gift or estate tax. It can be used in other manners to make a transfer of a relatively small amount now to shelter appreciation in the future.
Related Questions
- Why is it better to have an irrevocable life insurance trust purchase alife insurance policy on the donor, rather than have the heirs themselves own a permanent life insurance policy with the premium paid by the heirs with gifts by the now- living donor?
- When would an Irrevocable Intervivos Trust be used?
- When would a Revocable Intervivos Trust be used?
