Should I have an attorney work on my irrevocable trust?
Are you concerned about becoming incapacitated or unable to communicate your wishes to legal counsel or loved ones? An irrevocable trust transfers your assets into a trust that can only be changed under certain limited circumstances. This is essentially the opposite of a revocable trust, which allows you to keep control over your assets. In addition to the peace of mind that an irrevocable trust allows, it also relieves your beneficiaries of paying expensive estate taxes and making estate planning decisions on your behalf.
Get more details on the advantages and disadvantages of creating an irrevocable trust by contacting LaCava Law Firm, LLC today.
An irrevocable trust moves ownership of assets from your hands into a trust that can only be modified if the grantor and beneficiary allow it. This prevents your assets from becoming the property of the state or court, and you’re also relieved of tax liability of the assets in the trust if they generate income.
In addition to the protection provided by an irrevocable trust, there are other benefits that you need to be aware of.
- An irrevocable trust allows you to take full advantage of the estate tax exemption by removing taxable assets from your estate.
- You can also prevent misuse by beneficiaries by placing conditions on the terms of distribution.
- You can retain income from assets even after gifting them or removing them from the estate.
- Gifting your primary residence can also be done with more favorable tax rules.
- Life insurance policies can be housed in an irrevocable trust. This removes the proceeds from your estate.
Do you still have questions about the benefits of an irrevocable trust? Schedule a consultation with an experienced attorney by contacting LaCava Law Firm, LLC today.
Peace of mind and savings on taxes are the clear advantages of irrevocable trusts. But what about the disadvantages? Entering into an irrevocable trust essentially takes control of your assets out of your hands. However, there are a few other aspects that count as disadvantages, including:
- An irrevocable trust becomes a separate taxable entity, meaning a trust can be taxed for earned income, and the trustee has to pay taxes out of the trust.
- Trusts are eligible for the gift tax exemption, but only to a certain point. Gifts beyond a certain value can still be taxed.
- The income tax rates on a trust are generally higher than the income tax on an individual.
Get additional details about how to start creating an irrevocable trust by scheduling a consultation with the team at LaCava Law Firm, LLC in St. Charles, IL. Estate planning attorney Michael LaCava will work to protect your assets and develop the irrevocable trust that suits your wishes and the way you want your assets distributed. Contact Michael by calling (630) 444-7504 or use our contact form to make arrangements for your estate with an irrevocable trust today.