Irrevocable Trust
What is an Irrevocable Trust?
Irrevocable Trust
What is an Irrevocable Trust?
Trusts
A Trust is a legal arrangement that allows you or a third-party (trustee) to hold assets on behalf of one or more beneficiaries.
A well-prepared Trust can provide the following estate planning tools: incapacity planning tools, long-term creditor protection, Long-term consolidation of assets & continuity of management, avoidance of taxable gifts during your lifetime, tax basis adjustment at your death, avoids Probate Court, & the private distribution of your assets in Court.
Last Will & Testament
- Disposition of wishes and assets at death
- Does not plan for disability
- Personal Representative must be appointed by Court in order to act
- Must be “proved” in Court
- Becomes public record
- Estate Administration is under Court’s oversight
- Validity is highly state-specific
- More prone to contests due to public & legal notice requirements
- Property in multiple states means multiples Court proceedings
- Probate is time-consuming, which may delay distributions
- Does not protect your heirs’ inheritance from divorce or creditors, or themselves
- Does not provide protections for heirs, if your spouse remarries
- No tax reductions
- Cannot include overseas savings or assets
Trust
- Disposition of wishes and assets during life & at death
- Can plan for the incapacity of the Trustmaker
- The successor of your choosing takes over at death (or incapacity) without Court involvement
- A contract that speaks for itself
- Trusts remain private
- Administration occurs privately between trustee & beneficiaries
- The governing law of Trust prevails
- Less prone to contests
- Can only be contested by a disgruntled heir/beneficiary
- Probate is unnecessary, if properly funded
- Little to no delays in making distributions to beneficiaries
- Protects heirs’ inheritances from divorce, creditors, and even themselves by implementing safeguards until they are more mature to handle a large inheritance
- Protects heirs’ inheritances, if your spouse remarries
- Reduces excise, gift, estate, and generation-skipping taxes
- Can include overseas savings and assets
Terms
Trustee
One or more individuals named in a Trust to administer the Trust’s assets and make distributions. Designated individuals can be the initial, successor, or an alternate Trustee.
Trust Protector
One or more individuals with limited powers over a Trust, usually including the power to restrain or direct Trustee in certain circumstances.
The document that contains the Trust’s terms, e.g., instructions for how assets are is to be distributed by the Trustee.
