One of the most important aspects of creating an estate plan is to protect your assets so you can pass them along to your beneficiaries. There’s more than one way that you can protect your assets and plan for getting them to your beneficiaries after you pass away.
While some people choose to do this through a will, trusts are another option that should be considered. There are various types of trusts that can be established, each of which serves a different purpose. They all fall into the categories of revocable or irrevocable, depending on whether they can be changed after they’re established.
Permanency of irrevocable trusts come with significant benefits
An irrevocable trust is one that can’t be changed or canceled once you set it up, unless you can get the beneficiaries or the court to agree to your proposed changes. The assets are removed from your estate once you fund the trust, which means that it can reduce the tax liabilities.
You have to turn the trust and included assets over to the trustee, so you don’t have any control over it. In exchange for that, you can protect the contents of the trust from claims by your creditors or court judgments.
Trusts are only one part of having a comprehensive estate plan, so it’s critical that you get everything together so your loved ones know your wishes. Relaying these wishes in a legally enforceable manner is important, so you should consider working with someone who can assist you with making sure everything is in order.
