Experts in estate and trust administration know all the ins and outs of irrevocable trusts. Still, these legal contracts can become confusing for the layperson, sometimes discouraging individuals from including trusts in their estate plans. Even though trusts may seem intimidating, probate attorneys say they can often save your heirs a significant amount of stress while potentially saving you money.
Most people have only heard of trusts in a single context: They are set up by the very wealthy in order to keep their heirs flush with cash. The truth, though, is that irrevocable trusts can be used by almost anyone, depending on their estate planning needs. Irrevocable trusts allow an individual’s estate to remain viable long after they pass away.
The term “trust” is simply shorthand for a three-party relationship. First, the settlor establishes the trust, the trustee administers the trust, and the beneficiaries receive the assets from the trust. When you create this trust, you are actually moving assets from your own estate into the care of a trustee. This may sound like a gift, but it actually has different tax implications than simply handing over your property.
Ultimately, trusts give you much more control over the future of your assets than many other estate documents. Trusts can be used to help divvy out your assets to spend-thrift relatives, for example, or provide lifetime care for a pet or disabled child. A trust document will be created to define the terms of the irrevocable trust, which cannot be rescinded without the express consent of your trustee and beneficiaries.
Trusts may contain annuities, CDs, real estate, stock, cash and other valuable assets. Some people even use the trust to transfer the rights to their privately held businesses. If you want to consider using trusts during your estate planning process, contact a qualified probate attorney and financial planner. These business professionals can help you craft the perfect estate plan for your individual situation.
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