Irrevocable trusts are extremely helpful when used correctly in estate plans. You may be looking to reduce the taxes you owe or wanting to guarantee that someone you love will receive the assets you’re leaving behind for them.
When you speak with your attorney to set up an irrevocable trust, you’ll want to know if it’s the right kind. They’ll speak with you about several trust options, but until then, here are three possible benefits of having an irrevocable trust.
Tax savings
The first reason irrevocable trusts are important is because of the tax benefits they provide. Since your assets are taken out of your name, they are no longer included in your estate for the purposes of taxation.
Protection against creditors
Another good reason to have an irrevocable trust builds on the fact that the assets you put in a trust aren’t in your name. When you don’t technically own those assets, creditors can’t come after them in bankruptcy or as a form of payment in the future.
You can’t change the trust later
Finally, a third amazing reason to have an irrevocable trust is because you can’t change it. Why is that helpful? If you later develop a memory-related disease, become confused or have someone try to manipulate you, you won’t be able to change the trust in any way. Those assets are protected.
These are three reasons that you should consider an irrevocable trust. Your attorney can talk to you more about revocable, irrevocable and other forms of trusts that you may want to use as a part of your estate plan.