After careful review of your needs and assets, our attorneys will determine if an Irrevocable Trust is beneficial to your estate plan. It is important to understand that when a grantor transfers assets to an Irrevocable Trust, he or she relinquishes all rights of ownership to the assets and to the Irrevocable Trust. Also, an Irrevocable Trust may not be amended or revoked by the grantor.
One major benefit of an Irrevocable Trust is that by giving up ownership of the assets, the grantor may reduce the size of his or her taxable estate. Another potential benefit is that by transferring assets to an Irrevocable Trust, those assets may be protected from being drawn upon for future nursing home expenses and uncovered medical expenses.
In addition, most assets transferred to an Irrevocable Trust will generate income. The trustee will either accumulate the income or distribute it to the beneficiaries of the Trust.
One of the more common Irrevocable Trusts is a Life Insurance Trust that is created in order to exclude the proceeds of the policy from estate taxes.
Who is the beneficiary of an Irrevocable Trust?
The beneficiaries of an Irrevocable Trust can be individuals, businesses, or charitable organizations. Mostly, Irrevocable Trusts are created for the benefit of a surviving spouse or children.
Are there any assets that cannot be transferred to an Irrevocable Trust?
No. Any assets you own can be transferred to the Trust. Even if you owe money on the asset — such as a mortgage on your home — you can still transfer the asset to the Trust. The Trust document should address how debts are to be paid.