What Is an Irrevocable Living Trust?
The irrevocable living trust is aptly named. This kind of living trust cannot be changed, amended, or dissolved after execution. Thus, the trust maker effectively surrenders ownership of any assets assigned to an irrevocable living trust.
This kind of legal document can be directly contrasted with a revocable living trust. As you may have guessed, a revocable living trust grants the trust maker the ability to change or dissolve its terms so long as they are mentally capable.
Our Irrevocable Living Trust Attorneys May Be Able to Help You
What Is a Living Trust?
Living trusts of both varieties provide an alternative to a last will and testament. Under the right circumstances, living trusts provide certain advantages unavailable with a will.
- Unlike a will, living trusts avoid the probate process. Consequently, this often means a quicker distribution of the deceased’s assets. That is because it does not involve the courts. It also may mean conserving money because the estate does not pay out probate fees.
- Living trusts also provide privacy. Wills become public record after one’s death. However, living trusts remain private. Additionally, when you distribute the assets according to a living trust, you can keep it private affair.
- A living trust also allows you to choose a successor trustee. If you happen to fall ill or incapacitated, then this person can manage your estate for you. Unlike with a will, this person can take over your affairs without court supervision.
Which Living Trust Would Best Suit My Needs?
If a living will is the right option for you, then you must decide whether to make it revocable or irrevocable. Oftentimes those who choose a living trust over a will instinctively gravitate toward the revocable version. This is perhaps because the immutable nature of an irrevocable living trust is, at face value, rather intimidating. However, there are certain benefits that an irrevocable living trust provides. Weighing the costs and benefits of each kind of living trust can help you determine which is right for you.
Benefits of an Irrevocable Living Trust
The execution of an irrevocable living trust makes its terms final. But such a significant action must have its benefits, right? Otherwise, no one would agree to it. There are three main advantages to this kind of legal document.
- You can protect certain assets by relinquishing ownership of them. Conversely, retaining ownership under a revocable living trust means you could lose your assets to creditors or lawsuits. By transferring assets out of your estate, any creditors or lawsuit judgement holders cannot take them. This is because, under an irrevocable living trust, you no longer own them.
- Additionally, by giving up ownership of certain assets, the value of these assets no longer contribute to the value of your estate. Because these assets are no longer yours, this change will be reflected in your federal estate taxes.
- Finally, by giving up ownership, you may qualify for government benefits. Owning valuable assets may count against you if you’re trying to get Supplemental Security Income, Medicaid, or Medicare benefits. In order to qualify for these services, you may need to file an irrevocable living trust.
Is an Irrevocable Living Trust Right for You?
An irrevocable trust is a serious and complicated legal document. It is not just a form you can fill out. Thus, you really should work closely with an irrevocable living trust attorney. This is the best way to avoid making mistakes that you cannot remedy later.
Located in Centennial, Colorado, the Law Office of Skipton Reynolds, LLC provides estate planning services to the surrounding area. If you think this type of document is right for you, then contact one of our irrevocable living trust attorneys today at (720) 613-2633.