the irrevocabl trust

What Is the Irrevocable Trust?

Trust is a very important factor in any arrangement.  However, there is one trust, which is also very important that everyone can consider and this is the irrevocable trust which cannot be terminated after it has been finalized. An irrevocable trust is one that is cannot be revoked, changed, modified or amended or in other words, once it has been created and already finalized, the agreement will be now made and cannot be tweaked for any reasons in the near future, no matter what happens. This trust is commonly used in planning a property and allows the grantor to replace or change the arrangement stated in the trust. any time he or she wanted. Basically, there are types under irrevocable trust and below are some of these.

  • Testamentary trusts. What does this type of trust tells about? Nearly all stated testamentary trusts are said to be irrevocable. This is because this is a type of trust that is being funded and created after the death of a person. In other words, all the information or last will testament included has already been finalized, according to what the person wants.  Therefore, no one has the ability to change the information in the terms of this type of trust.  In addition, this will be the arrangement made by the person before he or she dies.
  • Irrevocable living trusts. This type of trust is called as the Inter Vivos irrevocable trust, which is finalized and created by a living trustmaker. This includes charitable remainder trust, spousal lifetime access trust, irrevocable life insurance trust and other trustmaker who have the authority to use this kind of trust.

These are the two main forms of irrevocable trust which you need to consider also, especially if you want to make a trust arrangement or written arrangement to someone.

Benefits of irrevocable trust

Well, for  the irrevocable trust, another significance of having this is that it provides an additional protection on the part of the creditor. Once the property or assets have been transferred to the trust, they will no longer belong to the grantor or in other words, the property has become the legally part of the board of trustee to hold the beneficiaries. Similarly, the creditor of this trust generally cannot place any lien against the trust of assets until such property and assets have been distributed to those who will benefit from it. This is just one of the significance of having this trust, which is really important on the part of the grantor.

Who can get benefits from this trust?

Actually, anyone other than the grantor may be named as the beneficiary of the irrevocable trust. For instance, in the testamentary trust, the family of the person who made the testament trust can benefit from it. However, not all are qualified because it depends on what is written or included in the testament trust. Now, you already know what an irrevocable trust all about and why having this is very important for both the grantor and the beneficiary.


What do estate lawyers do?

More than half of Americans leave the world without a proper will or an estate plan. Since they have not created the financial plans in their living, the state often transfers the assets to the deceased person’s closest relatives. The state also decides where the young children of the deceased are sent as well as their property if the other parent is unable to take care of them. However, with the help of an estate lawyer, these decisions can be made thoughtfully in advance.

An estate lawyer is a bar certified attorney who helps and guides their clients in choosing the correct options for maintaining their estates and property after death, mental disability or incapacity. Every person has different wishes. Some wish to distribute their wealth and property equally between their family members while others may have other desires about their assets. A qualified estate lawyer will not only describe the various options available but also make sure that your last wishes are carried out according to the law.

It is important to choose an estate lawyer who is experienced and understands your unique family and financial situations. The estate attorney should also be well informed about the laws of your certain state. You should also be comfortable with your estate planning lawyer in order to share the most intimate details of your life.

An estate planning lawyer can help you in various ways such as:

  • prepare a power of attorney according to the requirements of law
  • advice ways on how to reduce taxes on your estate property
  • prepare a will
  • establish a living trust
  • pass the property to the client’s family members as desired
  • makes sure that your property is protected from inheritor’s creditors and predators
  • And much more.

Who should hire an estate lawyer?

Estate planning is an important and often the most neglected part of any financial planning. Of course, it may seem simple for those who have few assets as well as no complicated family situations. But in truth, Estate planning is beneficial in assuring that finances are properly handed over to the heirs as well as medical decisions are made in advance and the heirs receive fair amount of the total assets.

An experienced and qualified estate planning attorney can help ensure that your property is managed smoothly even after your demise and makes sure your wishes to distribute your property and other wealth is carried out the way you want.


All About Trusts

Different Types of Trusts

When it comes to proper estate planning, it pays to examine all the features that will help you pass along the greatest amount to your children or designated party that avoids as many taxes as possible. This is where a lawyer experienced with estate planning can be most effective in helping you make the best decisions.

As part of the process, you will need to understand the two basic types of trusts that are available which can help you in planning accordingly. By understanding how trusts can affect your estate in a positive manner, you can make the best decisions when it comes to what you want to leave behind and avoiding the taxes involved.

Living and Testamentary Trusts

There are essentially two types of trust, living and testamentary that can be used in association with your estate. A living trust which may also be called an “inter-vivos” trust is created during the lifetime of the person. A testamentary trust is set up in a will and it becomes active only after the death of the person and the will is being executed. In both cases, you will need to work with your lawyer to ensure that your wishes are carried out and the proper taxes avoided so that your estate will not place an undue burden on the inheritors.

Living trusts can be divided into two different types, revocable and irrevocable.

Revocable Trust: This will allow you to retain all control of the assets in a trust where you are free to make changes at any time that you want. There are benefits to this type of trust, most notably if the recipient is in your view no longer capable of receiving the money that the trust holds you can always change where it goes or the terms that you have imposed.

Irrevocable Trust: Here, the assets of the trust are no longer yours to do with as you please. Instead, any changes that you make must be done with the consent of the beneficiary in order for them to apply. This may seemingly be a big disadvantage of the trust. However it is not subject to estate taxes which is a big benefit.

In addition to the irrevocable and revocable trusts, there are a number of other, more complicated versions of trust that can be used in specific situations. Again, it is imperative that you get the best advice from a trusted lawyer with experience in estate planning to see which of these specialized types of trusts work best for your needs.

Credit Shelter: Also known as a “family trust” or “bypass”, this is a type of trust that you put into a will that bequeaths a particular amount to the trust that is up to, but does not exceed the estate tax exemption. At that point, you will then pass the rest of your estate to your spouse which will be tax-free. In addition, there is an additional bonus in that the credit shelter trust will always be free of estate taxes even if it grows in value because the original amount was below the personal tax exemption when it was created.

Dynasty Trust: Also called a “generation-skipping” trust, this allows you to transfer a large amount of money tax-free to beneficiaries at least two generations removed from you and down the road which means that they must be younger. This generally means that you will leave money to your grandchildren which will skip your children. This is an excellent way to make sure that your grandchildren benefit from your estate without having to pay the estate taxes. In addition, the beneficiaries may also be grand nieces and nephews or even great-grandchildren and beyond depending on the limitations as explained in the rules and regulations that govern this type of trust.

Irrevocable Life Insurance Trust: This is a trust that removes your life insurance from the estate that is taxable. It is designed to help pay the estate costs and provide your beneficiaries with cash that they can use for a variety of reasons. There are many who do not realize that the benefits of their life insurance policy is considered part of their overall estate. So, to remove it from consideration you will need to surrender the ownership rights of the policy.

The bad news is that you can no longer use your life insurance policy to borrow against or change the beneficiaries if you wish to make such decisions. However, the good news is that the proceeds from the policy may be used to help pay off estate costs after you pass away and provide your recipients with a tax-free income.

Qualified Personal Residence: This is a type of trust that may remove the value of your home or vacation residence from your estate. This particular type of trust is quite valuable if your home is likely to appreciate considerably over the years. Basically, this is the type of trust that works well if you see the value of your property going up considerably which may exceed the personal exemption for estates. By putting it into this type of trust, you are removing a potential issue for those who receive your estate and still providing them with a home.

Qualified Terminal Interest Property Trust: If you are part of family that has experienced divorces, getting remarried, and having step-children, then you may want to focus the assets to a particular group of relatives with this type of trust. This means that your surviving spouse will receive the income from the trust along with the beneficiaries that you stipulate. This means that those whom you do not stipulate may get the principle or the remainder after your spouse passes away. This type of trust is designed to avoid any confusion when it comes to how you want your estate divided when there are multiple beneficiaries that are available.

All in all, understanding the nuances of estate planning, irrevocable and revocable trusts and the many different types of specialized trusts that are available will help you make the best informed decision about your estate.