Having a comprehensive estate plan is important so you can take care of your loved ones after you pass away. One of the options for doing this is to set up trusts. There are different options to consider when you’re ready to establish one.
While there are many different types of trusts available to pass assets along to your loved ones, all trusts are classified as either revocable or irrevocable. The classification plays a primary role in the protections the trust offers for the assets and the beneficiaries.
Protections of an irrevocable trust
One of the most important things to know about the irrevocable trust is that once it’s established, it can’t be changed unless all of the beneficiaries agree. The inability to control the contents of the trust makes the benefits possible.
An irrevocable trust provides a tax shelter that’s not possible with a revocable trust. This helps to ensure that your loved ones get as much as possible from the trust.
Another important benefit is that creditors can’t stake a claim on the contents of an irrevocable trust. This makes an irrevocable trust ideal for people who have a career that puts them at a high risk of a lawsuit because they can pass things on to their loved ones without having to worry that the contents of the trust will be yanked away from them.
Having an estate plan that’s set up with your beneficiaries in mind is critical to ensure that you can take the best possible care of them. The sooner you get this established, the sooner you can rest easy knowing that you’ve done all you could.