Irrevocable Trusts
Irrevocable Trusts: Protect Your Assets and Plan for the Future
When you place your assets into an irrevocable trust, you give up full control, and the trust becomes the legal owner. Since the assets no longer belong to you, they generally fall outside your taxable estate.
People use irrevocable trusts to:
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Remove assets from their taxable estate
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Protect asset growth from estate taxes
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Shield assets from creditor claims
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Control how trust income is taxed
Irrevocable trusts are powerful tools for gifting, asset protection, and planning for your beneficiaries. Because they are legally complex and can trigger immediate tax consequences, it’s essential to work with an experienced estate planning attorney.
Frequently Asked Questions
What is the difference between a revocable and an irrevocable trust?
In a revocable trust you maintain the ownership to the trust and its assets. You can amend the revocable trust at any time for any reason. With an irrevocable trust, you transfer your ownership rights to the trust and cannot revoke this transaction afterwards.
Can I make changes to an irrevocable trust?
Maybe. An irrevocable trust may include certain provisions that will allow for limited modifications. For example, you can appoint a trust protector, who may make certain modifications as permitted by law.
Does an irrevocable trust provide asset protection?
Yes, an irrevocable trust provides asset protection.
Why would anyone want an irrevocable trust?
An irrevocable trust can provide important benefits, such as creditor protection, estate tax avoidance, separation of the trust assets from your personal ones.
Do I need an irrevocable trust?
It depends. Most often irrevocable trusts are created to achieve a specific purpose, such as structured inheritance, creditor protection, or tax reasons.
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