If you’re considering planning for how your estate should be managed, you’re undoubtedly wondering whether you should include a trust in your estate plan. A revocable or irrevocable trust can be an excellent tool for holding and managing your assets, but it’s not always right for everyone.
This post considers irrevocable living trusts and their advantages and disadvantages. We’ll also learn how a trust lawyer can help you create the right plan for you.
What Is a Trust?
A trust is a tool that allows one party (the trustee) to control another party’s assets and property. An irrevocable living trust is a type of trust that cannot be revoked once it has been created.
What Is the Difference Between a Revocable Trust and an Irrevocable Trust?
A revocable trust allows its creator to change its terms or dissolve it at any time while they are still alive. An irrevocable trust cannot be changed once it has been created. Its creator must rely on the terms written into the document at the time of creation rather than being able to alter those terms later on down the road when circumstances change or new information comes to light.
Pros and Cons of Irrevocable Trusts
As an overview, the benefits of an irrevocable living trust include:
- Protection of assets from creditors and lawsuits
- Assisting in minimizing taxes due by placing the assets into an entity that is not subject to estate taxes
- Providing a legal framework upon which you can transfer your assets to beneficiaries after death
- Allow you to name a beneficiary who can keep the property in place if you become incapacitated
- Create benefits for your heirs, as they may not have to go through probate court after your death
The following are some disadvantages of irrevocable living trusts:
- You lose control of your assets if placed in an irrevocable living trust. Your assets become subject to the decisions of the trustee.
- If you unexpectedly experience financial difficulty, you will be unable to amend the terms specified in your irrevocable trust to take advantage of the assets when you need them most.
- You won’t be able to modify the trust if your personal or family objectives change, for example, if you would like to remove someone previously chosen as a beneficiary.
How Can You Choose?
Consultation with a professional estate planning attorney is the best approach to learning which trusts meet your estate planning needs. At the Law Offices of Michael K. Lanning, APLC, we can assist you in establishing a trust arrangement that will enable you to pass on your assets to your loved ones without having to pay costly estate taxes or go through probate. Contact us at 310-820-1600 or go to our website to learn more and set up a consultation to learn how we can help you with your estate planning process.
We serve West Los Angeles, Santa Monica, Pacific Palisades, Manhattan Beach, and the surrounding Los Angeles communities.