As you’re starting the estate planning process, you’re trying to decide between a revocable and an irrevocable trust. You’ve only heard negative things about irrevocable trusts, however, and you’re wondering why anyone would want one.
Here are some reasons why an irrevocable trust could be an ideal solution for your situation.
You Can Become Eligible for Government Benefits
If you are disabled and on Supplemental Security Income and Medicaid, then there are strict limits on how much money you can make and assets you can have to your name. But if you put your assets and income into an irrevocable trust, they will be sheltered, and you can still receive benefits.
It Shields Money from Creditors
Let’s say you have a creditor coming after you for debts you owe or a legal judgment against you. If you have an irrevocable trust in place, the trust will own your assets, not you. That means that when you pass away, your assets will be protected from these creditors and legal judgments.
You Can Save on Taxes
While grantors of revocable trusts will be denied tax benefits, irrevocable trusts have protection from taxes. This is because the settlor doesn’t have ownership of the trust; the assets are not considered to be part of the settlor’s taxable estate.
The Downsides of an Irrevocable Trust
Of course, there are drawbacks to having an irrevocable trust, the main one being that you will lose control of the property you transfer into it. Before deciding on whether you should go with a revocable or irrevocable trust, you need to get in touch with a qualified estate planning attorney.
Contacting Legacy Law Group
If you need help creating an irrevocable trust, 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.