For many, estate planning is an incredibly overwhelming process as there are many different options you can rely on to protect your assets and care for your beneficiaries. From wills and trusts to healthcare directives and probate, you may be unsure where to start or what documents you must establish. One option you should consider is reaping the benefits of irrevocable trusts. If you’re unsure what these entail or how to create one, you’ll want to keep reading to learn why it’s in your best interest to connect with PA trust attorneys to explore your options.
What are irrevocable trusts?
An irrevocable trust is a kind of trust fund that, once created, cannot be altered or revoked. This is because the person who creates the trust, known as the trustor, relinquishes control of the assets held in the trust, meaning they technically no longer own the assets. As such, the property in the trust is now technically the legal property of the trustee, or person named to control and distribute the assets according to the terms and conditions set in place by the trustor.
When are these used?
There are many reasons people will create irrevocable trusts when planning their estate. One of the primary reasons is the tax benefits it can offer. This is because it technically removes property from the estate of the trustor, meaning this can help reduce the tax liability of an estate.
Additionally, you may want to create an irrevocable trust if the assets and property held in your estate render you ineligible for government support like Social Security or benefits for a special needs child. This is especially important if you want to provide assistance for a special needs child, as it will allow them to use the funds held in the trust without technically owning them, such as if you were to gift them the funds. Creating this kind of trust ensures they can still benefit from government assistance programs while having additional funds for other uses and emergencies that may arise.
Finally, you may want to create an irrevocable trust if you are in a profession where lawsuits are the norm. This can help protect your assets from creditors should you lose or settle a civil lawsuit, as you technically do not own the assets held in this trust, meaning they cannot be seized. As such, this grants you and your beneficiaries additional protections.
How do I create one?
If you are interested in reading an irrevocable trust to help shield your assets and beneficiaries, you’ll need to establish the trust by deciding which assets will be held, name a trustee, and legally transfer the assets by relinquishing your ownership rights to the property.
Because creating an irrevocable trust is a permanent decision, it is strongly recommended to consult an experienced attorney to discuss your choices before proceeding with this matter. They can advise you of all potential risks to ensure you make the most informed decision possible.
At Friedman Schuman Layser , our dedicated legal team understands these matters. That’s why we can help you understand your options so you can have peace of mind that your assets and beneficiaries will be protected upon your passing. Connect with us today to learn more about these matters.
