Irrevocable Living trusts are very common in estate planning as they allow the grantor to reduce tax collections for both themselves and the beneficiary. An Irrevocable Trust is a kind of trust where its terms cannot be changed, altered or terminated without the consent of the grantor’s named beneficiary or beneficiaries. The grantor, having successfully transferred all ownership of assets into the trust, legally removes all of their rights of ownership to the assets and the trust.
When you sign an Irrevocable Trust and transfer property to the trustee of the trust, those assets are secured, outside of your control, and are now controlled by the trustee. The grantor can dictate the terms, rules and uses of the trust assets with the consent of the trustee and the beneficiary.
Today’s Irrevocable Trust comes with numerous provisions that were not generally found in older versions. These additions allow for much greater flexibility in trust management and distribution of assets. It is vital that a Fremont estate planning attorney is contacted before you enter into any trust, revocable or irrevocable. There are many estate and tax actions that can be levied against you if you have not received the proper legal representation. Our law firm has great experience as we have represented thousands with their estate planning needs.
The main purposes behind setting up an Irrevocable Trust are for estate and tax considerations. The advantage of this type of trust for estate assets is that it removes all incidents of ownership, effectively expelling the trust’s assets from the grantor’s taxable estate. It additionally relieves the grantor of the tax liability on the income the assets generate. While the tax rules vary between jurisdictions, in most cases, the grantor can’t get these benefits if they are the trustee of the trust. The assets held in the trust can include — yet are not restricted to, a business— investment assets, cash and life insurance policies.
Setting up a trust of any sort can be complicated enough that an attorney is required. We can help you set up your trust successfully.
Protecting your assets from your creditors generally means that the trust has to be irrevocable and the trustee and beneficiary are unrelated parties (or, probably, the same party with restricted control over trust funds). For individuals who frequently face claims (including doctors, architects and real estate developers) these protections are highly useful, though the laws on creditor protection over your assets vary state-to-state.
When you create an irrevocable trust, you lose ownership of all the assets being gifted away. This loss of ownership allows these estate items to be granted to a named party without any estate tax being levied onto them. This is very important to many people as they want their loved ones to be cared for after they pass.
Our law firm can help you decide which path to take. We will review your options and determine the best course of action for both you and your beneficiaries. It is very important that you retain legal representation during this time as you do not want to enter into any contract or agreement before weighing both its negative and positive features.
Irrevocable trusts can include a large variety of assets including: businesses, cash, property and even life insurance policies. When you agree to an irrevocable trust, you are not allowed to change or cancel it. This is a very important life decision as you may be losing you right to a valuable piece of your estate. Every trust is different and requires an in-depth review of the possible options. The Singh Law Firm is very knowledgeable of California estate law and is capable of helping you every step of the way. We promise to take a compassionate approach during this process and work hard to ensure a legally sound trust is created for you.