Creating an estate plan is something that you may not be looking forward to doing, but it’s critical so you can outline your wishes for your loved ones. There are several things that you need to think about when you’re getting ready for this. One of them is to determine the most effective manner to pass assets to your beneficiaries.
It’s possible to hand assets down to your loved ones using a will, but that’s not always the best option. You may choose to use trusts, which are structured legal arrangements that allow you to set terms for getting assets to your beneficiaries. As you’re reviewing the options, you may come across the term “irrevocable trusts.”
What is an irrevocable trust?
An irrevocable trust is one that can’t be changed by the creator unless the court or the beneficiaries approve the changes. Once the trust is established and funded, the assets are under the management of the trustee. Since you relinquish control over the assets, those assets have specific protections.
One protection is that your creditors can’t stake a claim to those assets. This means that everything in the irrevocable trust will be able to be passed along to the intended beneficiaries.
These trusts also bypass the probate process, which means that the terms won’t be made public. Additionally, beneficiaries don’t have to worry about waiting for probate to get their inheritance. This can also save them money.
Setting up an irrevocable trust can be complex, so it’s best to work with someone familiar with these matters. This is only one part of a comprehensive estate plan, but it’s often a central part.