Creating your estate plan enables you to outline your wishes for your estate after you pass away. Determining the most appropriate way to pass assets to your beneficiaries is one of the major decisions that has to be made.
One option for passing down assets is through your will, but there’s another option—a trust. When you decide to set up a trust, you have to determine if it should be a revocable trust or an irrevocable trust. A revocable trust is one you can change, but changes are not possible if you opt for an irrevocable trust, except with the permission of the court or the beneficiaries.
What are the benefits of an irrevocable trust?
An irrevocable trust is managed by a trustee, so you don’t have control over the assets once the trust is established and funded. That relinquishment of control can help to preserve the assets held by the trust because those assets can’t be touched by your creditors. This enables you to pass the intended wealth to your loved ones.
Beneficiaries will benefit from you using a trust to hand out assets because trusts don’t go through the probate court. This provides privacy since the terms of the trust won’t be part of the public record. Bypassing probate can also help the beneficiaries to get their inheritance as soon as possible.
Creating a comprehensive estate plan is a critical step you must ensure you complete. Determining how to handle everything is challenging, so it’s typically best to work with someone who’s familiar with these matters. This may help to ensure you’re setting everything up in a manner that’s legally enforceable.