Creating your estate plan requires you to take a complete inventory of assets you own. Once you have this, you can determine which of those assets you want to give to specific beneficiaries. Next, you have to determine the way you will accomplish this.
Some people opt to pass down assets in their will, which means their beneficiaries will have to go through probate court to get what you want them to have. The alternative to that is to put the assets in a trust for distribution.
There are two types of trusts, revocable and irrevocable, that you may come across. There are marked differences between these, but the primary one is that a revocable trust can be changed and an irrevocable trust can’t be changed.
What are the benefits of an irrevocable trust?
Once you establish and fund an irrevocable trust, you aren’t in control of the assets any longer. The trustee over the trust takes control once that occurs. Because of this, there are very specific assets that you and your beneficiaries can enjoy.
The assets that are in the trust are removed from your estate, which can lower the taxable value of the estate. This could save your loved ones money in the long run. Additionally, the contents of the trust are protected from creditors’ claims against you. This means that they can’t touch those assets, so they can be passed along to your loved ones.
Setting up a trust is only one part of getting your estate plan together. It must be handled in an exact manner, so it’s critical that you work with someone who can assist you in this matter.