Creating an estate plan requires careful thought. One thing that you have to decide is who is going to get which assets after you pass away. Once you decide that, you’re going to have to figure out the best way to relay your wishes in a legally enforceable manner.
One option that you have for relaying your wishes is through an irrevocable trust. These trusts can’t be changed once they’re created, unless permission is given by the named beneficiaries or the court. While some people may be concerned about the permanence of these trusts, there are specific benefits that may make them attractive to some people.
Benefits of an irrevocable trust
When you create and fund an irrevocable trust, the contents of the trust move under the control of the trustee. As the creator, you don’t have control over any of the assets any longer. Because of that, the assets in the trust are removed from your estate. This can reduce the estate taxes your loved ones have to pay, which is particularly beneficial if you have a larger estate.
Another benefit of an irrevocable trust is that creditors can’t stake a claim on the contents of the trust. This means that if you have debts or if a lawsuit is filed against you, the contents of the trust are safe and can be passed down to your named beneficiaries.
It’s important to remember that an irrevocable trust is only one component that you can include in your estate plan. Thinking about your wishes and determining the best way to relay those is critical. It may be beneficial to work with someone who can assist you throughout this process.
