Now that you’re going through the estate planning process, you’re looking into whether you should set up an irrevocable or revocable trust, and the benefits of each. What you’re concerned about is the IRS coming after your assets.
Here’s some more information to help guide you in your decision to set up a trust.
Irrevocable vs. Revocable Trust
The way an irrevocable trust works is that you relinquish control of your assets and put them into this trust. You cannot change the trust. The upside is that your money is well-protected from creditors or people who may want to sue you. It could be a good solution if you work in the legal or medical field, for instance, and are vulnerable to lawsuits.
With a revocable trust, you can change it at any time. It offers a lot more flexibility than an irrevocable trust since you retain control of it. However, when it comes to the IRS and other creditors, you may decide to create an irrevocable trust instead.
The IRS and Irrevocable Trusts
When you put your assets into an irrevocable trust, they no longer belong to you, the taxpayer (this is different from a revocable trust, where they do still belong to you). This means that generally, the IRS cannot touch your assets in an irrevocable trust. It’s always a good idea to consult with an estate planning attorney to ensure you’re making the right decision when setting up your trust, though.
Getting in Touch With Legacy Law Group
If you need help setting up an irrevocable trust for your estate, you can contact the estate planning attorneys at Legacy Law Group in Eastern Washington, Spokane Valley, and Spokane itself. Get in touch with us at (509) 315-8087.