An irrevocable trust is a trust that you create which is not easily modifiable. While you can sometimes make minor changes to an irrevocable trust, altering trust terms is not nearly as simple or straightforward as with a living trust and there is much less flexibility in what you can do.
Although an irrevocable trust requires you to give up a lot of control because of the limits on modifications, it is still a very popular estate planning tool. This type of trust is a widely used trust because it has many advantages when it comes to the protection of assets. Unlike with a revocable living trust, which provides more limited protection for your wealth, you can get stronger legal protections to keep your assets safe when you create an irrevocable trust.
The Law Offices of James A. Miller, P.C. can provide you with assistance in determining if you should create a trust and can provide you with guidance in selecting the right trust type to meet your estate planning goals. Our legal team can also help you with the formalities of trust creation so you ensure that any trust you create, whether it is a revocable or an irrevocable one, will offer you the expected protections.
Signs You Need to Create an Irrevocable Trust
Unlike a revocable trust, an irrevocable trust typically involves giving up a substantial degree of control over the wealth that you transfer into the trust. Because you no longer own the assets, generally cannot easily access the trust property, and have limited or no control over the money and property put into the trust, your trust assets may be much more protected than if you had chosen another trust type that allowed you to remain in charge of assets.
You may wish to create an irrevocable trust to get this type of protection if:
- You want to protect assets in case you need nursing home care: If you are concerned that you will need nursing home care and you want to be able to get Medicaid to pay for it, an irrevocable trust can sometimes help protect assets while a revocable trust cannot. You’ll need to transfer assets into the irrevocable trust at least five years before you need Medicaid in order to avoid a period of disqualification from coverage and will need to ensure that trust assets are not accessible to you.
- You want to protect assets from creditors. You’ll need to act before you have credit problems and, like when protecting assets from Medicaid, ensure you can’t just access trust assets under the terms of the trust.
- You want to reduce or avoid estate tax. You may be able to avoid having the assets held within an irrevocable trust counted as a part of your taxable estate. This could allow you to avoid estate tax if your estate is large enough that you would otherwise have to pay.
There are also other situations where an irrevocable trust may help you, such as if you want to provide for a disabled child. An experienced attorney can assist you in determining if this type of trust should be a part of your estate plan.
Why You Should Talk with a Trust Lawyer When You Create an Irrevocable Trust
In order to get the asset protection that an irrevocable trust can provide, you need to ensure that you give up sufficient control of you assets and that your trust document follows the appropriate formalities. You do not want to discover, at the very time when protection for your assets is needed, that you failed to create a legally valid irrevocable trust that keeps your wealth safe.
The Law Offices of James A. Miller, P.C. will assist you with all aspects of trust creation, from selecting your trustee to creating your trust document in full compliance with the law. We can explain how the rules work for protecting your assets from creditors, taxes, and other possible sources of loss. Give us a call to find out more.
Getting Help from A Worcester Trust Lawyer
The Law Offices of James A. Miller, P.C. can assist you with all aspects of trust creation including with choosing between an irrevocable trust and a revocable living trust. We can also help to ensure that the trust you create is legally valid, provides expected protections, and will keep your family and assets safe.
To find out more about how trusts fit in with your comprehensive estate plan, join us for a free seminar. You can also give us a call at 866-370-3888 or contact us online to get personalized advice on the creation of the type of trust you need to secure your legacy.
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