Trusts are beneficial tools to maximize the efficiency of your current and future assets. A trust can simplify the distribution of your assets after your death and give you the flexibility to qualify for certain governmental programs such as Medicaid while you are alive. On top of that, trusts can help give you tax breaks on certain assets and gifts you are given from others. There are many types of trusts but living trusts are some of the most used trusts in America.
There are two primary types of living trusts: irrevocable living trust and revocable living trust. Each has its own merits but may demand certain requirements. In order to set up a living trust that best suits you, it is advised to contact a living trust attorney to help you navigate through the benefits of each and what you need to do to get one started.
What is an Irrevocable Living Trust?
An irrevocable living trust is a very popular option among many people due to the financial benefits of it. An irrevocable living trust allows a grantor to start the trust and transfer assets to it, allowing for a distribution of those assets to other beneficiaries. Because these assets are in the trust and under the names of other beneficiaries, it is possible to avoid estate taxes on these, leaving you with more money in your pocket.
However, an irrevocable living trust is exactly that – irrevocable. This means that your living trust, once established, cannot be altered or changed and cannot be revoked after you die. Speak to a trust attorney to see if an irrevocable living trust is right for you.
What is a Revocable Living Trust?
A revocable living trust is similar to an irrevocable living trust wherein you can place assets and property into the trust. However, a revocable trust can allow you to constantly manipulate the assets inside of it. Because these assets are constantly shifting, it may not provide the same tax benefits as an irrevocable trust but it can allow your beneficiaries to avoid probate following your death. It is much easier to designate assets to their proper beneficiary through a revocable living trust than not having a trust at all. A living trust attorney can help you determine which trust is best for you.
How Can an Estate Planning Attorney Help Me with a Living Trust?
Living trusts of any kind may be able to provide you with the flexibility to manage your finances and optimize your ability to control them with ease. Israel & Gerity, PLLC can talk through your options with you and set you and your family up with great asset flexibility and protection.