Do you need to give up control of your assets with an irrevocable trust? A trust-based estate plan protects you in many ways, but knowing the types of trusts and how to use them to your benefit is the key to protecting your assets long-term. When estate planning, you’re not only planning for what happens to your assets once you die, you’re also considering what the best options are your future while you’re still here. A trust-based estate plan keeps you protected while you’re still living and an irrevocable trust may be an option depending on where your future is headed.
When Should I Consider an Irrevocable Trust?
There are two main types of trusts available when looking into a trust-based estate plan. A revocable living trust and an irrevocable trust. A revocable living trust is probably more common as this type of trust is set up to hold your assets and list your instructions for the distribution of them should something happen to you. With a revocable living trust you still have access to the assets and are in full control of managing your assets during your lifetime. An irrevocable trust means just that, it is irrevocable in the sense that you cannot make changes to the terms of the trust once it’s established and the assets are assigned to the trust. An irrevocable trust essentially removes your rights of ownership over the assets you are placing into the trust. So why would giving up ownership of your assets in an irrevocable trust be beneficial?
Reasons to Have an Irrevocable Trust?
- Protection from lawsuits.
- Qualifying for government programs.
- Making your estate as tax efficient as possible.
Naming a trustee to your assets and giving up ownership can protect you in certain situations. If you are a licensed professional, have a substantial amount of wealth, or want to plan for long term care costs, an irrevocable trust may be something to consider. As always, you should consult with an estate planning professional to see what the best estate planning options are for your situation. Your estate plan should be specifically crafted for YOUR life and work for you as you move through each phase of life.
If you are in Illinois or Wisconsin, contact us and let us create the perfect plan for you.
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Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.