A trust can be used to protect your assets, and specific types of trusts have specific advantages. One that might work well for you and your estate is an irrevocable trust, but there are important rules about this arrangement that you should consider before making any big decisions. A Washtenaw County trusts attorney can help you learn more.
Do I Control an Irrevocable Trust?
You don’t. When you establish an irrevocable trust, you set the rules and pick a trustee. Then the assets inside of the trust are no longer technically yours, and changing the rules on your trust is quite difficult. This can seem like a bad idea, but there are some benefits to this arrangement. An experienced estate attorney from our firm can tell you if you could put this kind of trust to good use.
Who Should Be Put in Charge of My Irrevocable Trust?
Because you are leaving these assets in someone else’s hands, it’s important to choose the right trustee to manage your irrevocable trust. There are no strict requirements for this job and the state really only requires a trustee to be 18 years of age or older and of sound mind. You should choose someone who can be relied on and someone who would be able to handle the responsibility of managing a trust for you.
What Are Some Benefits of an Irrevocable Trust?
When you establish an irrevocable trust, you are essentially separating these assets from the rest of your estate. That means that:
- These assets could be protected from creditors
- You could lower your estate tax bill
- The trust’s assets could be protected from lawsuits
- You could qualify for certain government programs, like Medicaid
What Are Some Drawbacks?
There are some potential issues to be aware of though. When you establish an irrevocable trust you:
- Must be completely reliant on a trustee
- Cannot change your beneficiaries
- Lose all ownership rights and control over these assets
This is why it is important to talk things through with an attorney. We can tell you if this kind of arrangement is advisable.
Are There Different Types of Trusts?
It’s also important to figure out what you want to do with your irrevocable trust. You can use one to provide for a loved one with special needs, for example. A special needs trust is irrevocable, but it allows you to leave assets behind for an heir without jeopardizing their access to government benefits, like SSI and Medicaid, that they may rely on. There are also charitable trusts and arrangements that make it easier to leave a house or another property to a beneficiary.
Talk to an Experienced Estate Lawyer
If you want to learn more about the different types of trusts that you could use to protect your assets, contact Collis, Griffor & Hendra. We can schedule a consultation and help you learn more about all of your estate planning options.
