Is Having an Irrevocable Trust the Right Move for You?
There comes a time when you have to decide who matters to you the most and who deserves your assets after you.
There are a few effective estate planning tools you can opt for to prepare your estate for the ease of transition such as revocable trusts and irrevocable trusts.
You must be familiar with these trusts but most of you might be confused about their benefits. Here, the first thing to consider is how much control you want over your property. After discussing your concern with a Los Angeles estate planning lawyer , you can effectively decide the appropriate trust for you.
What is an irrevocable trust?
Irrevocable trust: It is a trust with terms and conditions and once it gets finalized, it cannot be changed by the grantor. This is a valuable estate planning tool for government benefits such as Medicaid.
How does an irrevocable trust work?
An irrevocable trust also includes three main players like any living trust holds.
● the grantor
● the trustee
● the beneficiary
More briefly, the grantor creates the trust and the trustee administers that trust; while the beneficiary is one who receives all the benefits of the trust.
The irrevocable trust is settled by a trust agreement which is typically drafted by an Arcadia attorney. In this agreement, you can mention how your property will be managed and distributed to benefit the lives of the people you care for.
Why irrevocable trust?
First of all, an irrevocable trust requires a careful analysis of the grantor’s assets, health & care needs, objectives, family dynamics and other considerations. Here are a few benefits that you can avail by creating an irrevocable trust:
● Avoid Probate
● Avoid Taxation
● Asset protection
● Medicare considerations
● Creative options
This can be an easy way for the grantor to control their properties long after they pass on. Let’s check what are the duties of the trustee upon the death of the grantor:
● Find and review all of the essential documents of the deceased.
● Create a list of all household items to be distributed to beneficiaries.
● Clear all outstanding bills or debts.
● If the trust will generate more than $600 in income from the date of death until all trust assets are distributed (which is generally the case), a tax identification number needs to be obtained for the trust.
As it is irrevocable, careful planning and drafting is crucial to make sure your specific goals & benefits are met legally. So, take the help of an experienced living trust attorney to assure that your family's financial future is safely guarded.