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How can an irrevocable trust help your beneficiaries?

On Behalf of | May 21, 2024 | Uncategorized

A comprehensive estate plan outlines what you want to happen to your assets when you pass away. There are several components that you have to think about when you’re putting this kind of plan together. For example, you’ll need to identify the most efficient way to pass down your assets.

Trusts are an option that may make it easier to get assets to beneficiaries as you see fit. Some trusts are irrevocable, which means you can’t change the terms or void the trust once you establish and fund it. Consider the following if you’re thinking about adding an irrevocable trust into your estate plan:

Estate value reduction

The assets in an irrevocable trust aren’t counted as part of your estate, so it can be used to reduce the value of your estate while still handing assets to your beneficiaries. This benefit can also help to reduce certain tax liabilities that are based on the overall value of the entire estate at the time of your death.

Protection from creditors

Because you relinquish control of the assets in the trust, it offers protection from your creditors. This is beneficial if you are at a higher risk of being sued because of your occupation. Protection from creditors enables you to pass more of your assets to your loved ones when you pass away.

Variety of types are available

There are several types of irrevocable trusts, each of which serves a specific purpose. For example, a special needs trust helps to provide care for a person who receives assistance from needs-based programs. Since the trustee handles the assets and the beneficiary never has control over them, this type of trust can fund supplemental needs that aren’t covered by the needs-based program.

Creating a comprehensive estate plan is an essential task for every adult. Working with a legal representative who can explain the options and help you to get everything set up can give you peace of mind since you’ll know that you’re doing your best to care for your loved ones after your death. An irrevocable trust may or may not fit well into your personalized estate plan. Seeking feedback unique to your circumstances is a good way to learn more.