Creating an estate plan is something all adults need to do. If you die without an estate plan (at least a will), your assets will distributed according to the state’s intestacy laws, which may or may not be what you had in mind.
A comprehensive estate plan has more than one component. You can pass some assets down using your will, but there are times when a trust might be necessary. One type of trust if the irrevocable trust.
An irrevocable trust can’t be changed once it’s set up and funded because you give up control of the assets. The only exception to this is if the court orders a change or the beneficiaries agree to it. That means you need to ensure that you have the terms set exactly as you intend.
The benefits of an irrevocable trust
The benefits are what draw many people to establish an irrevocable trust as a way to pass assets to their beneficiaries. One of the biggest benefits is that the contents of the trust can’t be touched by creditors. Since you don’t have control of the assets, they aren’t considered your property for collection purposes.
Irrevocable trusts also have tax benefits. This type of trust is not considered part of your taxable estate, so it could save your loved ones money.
Because trusts don’t go through probate, beneficiaries can enjoy privacy. This means nobody has to know the terms of the trust unless they want to share them.
Setting up a trust must be done precisely. Having experienced estate planning guidance is critical. Ultimately, the goal of estate planning is peace of mind for you and your beneficiaries.