What Is an Irrevocable Living Trust?
The irrevocable living trust is aptly named. This kind of living trust cannot be changed, amended, or dissolved once it has been executed. 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 will provide certain advantages simply not possible with a will.
- Unlike a will, living trusts avoid the probate process. This often means a quicker distribution of the deceased’s assets because the courts are not involved. It also may mean conserving money, as no probate fees will be taken out of the estate.
- Living trusts also provide privacy. Whereas wills become public record after one’s death, living trusts remain private. Additionally, all asset distribution carried out according to a living trust remains a private affair as well.
- A living trust also allows you to choose a successor trustee. If you happen to fall ill or incapacitated, 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, 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 or else no one would agree to it. There are three main advantages to this kind of legal document.
- Relinquishing ownership of certain assets can be a way of protecting them. Retaining ownership under a revocable living trust runs the risk of losing 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.
- Relinquishing ownership of certain assets also means that the value of these assets can no longer contribute to the overall value of your estate. Because these assets are no longer yours, this change will be reflected in your federal estate taxes.
- Relinquishing ownership of certain assets may help you 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?
The immutable nature of the irrevocable trust makes it a serious and complicated legal document. Thus, composing one should be done in close collaboration with an irrevocable living trust attorney. This is the best way to avoid making mistakes which cannot be remedied later.
Located in Centennial, CO, the Law Office of Skipton Reynolds, LLC provides estate planning services to the surrounding area. If you suspect this type of document is right for you, contact one of our irrevocable living trust attorneys today at (720) 613-2633.