San Jose Irrevocable Trusts Lawyer
Understanding the Difference Between Irrevocable and Revocable Trusts
A key part of estate planning is the preparation of trusts. It is important,
however, to ensure you have the correct kind of trust. There are revocable
trusts, irrevocable trusts, asset protection trusts, irrevocable life
insurance trusts and more. How do you determine what kind of trust you
need? What is the difference between revocable and irrevocable trusts?
Revocable trusts, also known as
revocable living trusts, are trusts which can be modified or changed at any time. They allow the
trust maker to retain ownership and control of their property while they
are still alive. If you create a revocable trust and decide, at a later
point in time, you want to change a beneficiary or some other aspect of
the trust, you can do so through a trust amendment.
Irrevocable trusts, on the other hand, are trusts which cannot be changed
once the trust agreement has been finalized and signed. Revocable trusts
will become irrevocable trusts as soon as the trust maker dies. Some of
the main reasons for setting up irrevocable trusts include:
Reduction of Estate Tax: Irrevocable trusts, such as
irrevocable life insurance trusts, are often used by individuals in order to remove the value of property
from their estate and put it in the trust. This is done so the property
cannot and will not be taxed when the person dies. Setting up an irrevocable
trust benefits surviving beneficiaries.
Asset Protection: Irrevocable trusts can also be used to protect assets. When assets are
placed in an irrevocable trust, they are no longer under the control of
the trust maker. Therefore, the trust maker's creditors and others,
who are not listed as beneficiaries of the trust, have no legal access
to those assets.
Irrevocable Charitable Trusts: When an individual establishes an irrevocable charitable trust, they are
setting up for assets to be transferred or donated to a specific charitable
organization. If the transfer of said assets occurs prior to the trust
maker's death, then the trust maker receives a charitable tax deduction
during the year the transfer is made. Should the transfer of assets occur
after the trust maker has died, then their estate or beneficiaries would
be the ones receiving the charitable tax deduction.
Preparing irrevocable trusts can be tricky. You need a lawyer who is knowledgeable
and understands all aspects of estate planning. An improperly prepared
trust could lead to legal issues, which might delay or severely impact
the dispersal of your estate to your intended beneficiaries after you
die. Ensure your beneficiaries receive your assets and estate exactly
as you intended. If you or a loved one needs to prepare an irrevocable
trust, contact a San Jose irrevocable trusts attorney at
WealthPLAN, PC today.
Irrevocable Trusts Attorney Serving San Jose
WealthPLAN, PC has over 30 years experience in estate planning, advanced estate
planning, tax, trust administration and litigation. They have a California
State Bar certified specialist in Taxation Law,
Probate, Estate Planning and Trust Law in house and they believe in helping you
meet your irrevocable trust and complete estate planning needs. They are
here to evaluate your exact circumstances in order to advise and assist
you in making the smart, timely choices which will not only reduce the
exposure of your estate to taxes, but also allow your beneficiaries to
receive your assets and estate as you intended.