When you’re considering setting up trusts, something you may want to consider is an irrevocable trust. Irrevocable trusts have a few benefits that you may not see with others.
Why? When you create an irrevocable trust, you’re taking assets out of your hands. That means that you can:
- Protect your assets against creditors if you die with debt
- Assign assets to specific children, family members or friends
- Save money on your tax bill by limiting the value of your estate
There are many different kinds of irrevocable trusts, which is why it’s a good idea to talk to your attorney about creating one if you’re interested. Some possible kinds of irrevocable trusts to consider include:
- Irrevocable marital trusts
- Irrevocable life insurance trusts
- Irrevocable charitable trusts
Irrevocable trusts aren’t right for everyone. Once you make decisions and put assets into an irrevocable trust, then you cannot withdraw those assets. You should know that there are other kinds of trusts that may be better suited to you, which is something to talk about with your attorney.
However, if you are ready to create a trust and know that you have no intention of changing it in the future, then an irrevocable trust is potentially right for you. You may have less control than with a revocable trust, but you will be able to guarantee more protection to your assets. Rescinding ownership of certain assets may also be beneficial for your long-term care planning and if you intend to seek Medicaid for support later in life. Your attorney can walk you through the options and help you decide on a trust that is right for you.