Irrevocable Trust Law

Irrevocable Trust Legal Issues

Irrevocable Trust Law:

An Irrevocable trust is a type of intervivios trust. An intervivos trust goes into effect while the grantor is still alive. Intervivos trusts can be either revocable or irrevocable.

An irrevocable trust is a trust that cannot be modified or terminated by the grantor, without permission of the beneficiary. The grantor transfers assets into the trust, which effectively removes all of his or her rights of ownership. That property is now under the authority of the trust. Assets held in an irrevocable trust can include business investments, cash, property, and life insurance policies.

A revocable trust allows the grantor to modify the trust and the assets within the trust.

Irrevocable Trust Legal Issues:

Estate and Tax considerations are the primary benefit of creating an Irrevocable Trust. The Irrevocable Trust removes all incidents of ownership, effectively removing the trust’s assets from the grantor’s taxable estate. The grantor is relieved of the tax liability on income generated by the assets within the irrevocable trust. There are precise rules, regulations and limitations to benefit from these tax advantages. Certain transfers within certain time periods prior to the grantor death can and cannot qualify for tax relief.

If property created and executed, assets in an irrevocable trust are no longer considered part of the grantors estate. Typically the assets in the irrevocable trust are not included in the grantors estate value when determining death taxes.

An irrevocable trust can also be used in situations where the grantor possesses testamentary capacity at the moment, but has a real concern that may soon no longer be true. At the onset of dementia or alzheimer's many grantors create an irrevocable trust to prevent future changes after symptoms have set in.

How a Lawyer can assist with Irrevocable Trusts:

Understanding the tax implications (gift, federal, estate, death, inheritance, etc.) for property transfers into an irrevocable trust can ensure the right provisions are followed. An experience trust lawyer can help avoid unnecessary tax-related issues caused by violations of tax code.

An estate lawyer can legal establish testamentary capacity when creating the Irrevocable Trust to prevent any will disputes after death.

Lawyer Referral Service:

To find an attorney experienced in Irrevocable Trusts contact Attorney Search Network. We can help you find an Estate Planning Lawyer who will help with your legal issue.

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If you have any questions about the information provided above, please contact Attorney Search Network.