In the past, on our blog, we have gone over the possible benefit of establishing a trust when you are engaging in the estate planning process. Forming a trust can be complicated, and there are several different kinds of trusts that fit different sets of needs, depending on the nature and size of an individual’s estate. In particular, an irrevocable trust is a tool that might be right for you as you are thinking about how to organize your estate.
An irrevocable trust is a specific kind of trust that allows the trust’s creator to designate assets to a beneficiary – once transferred, the trust cannot be altered. The trust’s creator automatically loses control over the assets once the beneficiary receives them.
Advantages and Disadvantages: What You Need to Know
An obvious disadvantage to the irrevocable trust is that as soon as the transfer happens, you (the grantor) lose control over the trust property. The irrevocable trust can also be subject to higher tax rates than other kinds of trusts.
On the other hand, however, any assets that are part of an irrevocable trust do not contribute to the value of a person’s estate, which is what often determines how much an individual pays in taxes outside of the trust. In addition, property in an irrevocable trust avoids probate, which can be extremely beneficial for a person’s loved ones after that person is gone.
Irrevocable trusts can also allow individuals to continue accessing government benefits like Medicare and Supplemental Security Income. The government will generally refrain from counting money in an irrevocable trust as part of someone’s total net worth when deciding whether that person qualifies for important benefits, which allows those individuals to avoid being exempt from receiving the money they might need.
How Do I Explore the Possibility of an Irrevocable Trust?
If you think an irrevocable trust might be right for you, the best thing you can do is speak with a qualified estate planning attorney that can help you think through next steps. While it is possible to set up trusts without lawyers in some situations, the entire process involves many legal hurdles and procedural requirements that are easy to miss without a dedicated attorney. In order to make sure your property is well protected, you should consult with an attorney that you trust has your best interests in mind.
Are You Looking for a Houston Estate Planning Attorney in Texas to Fit Your Needs?
If you or a loved one is in the estate planning process in Houston, give us a call at McCulloch & Miller. We offer a comprehensive approach that takes into account all of your needs and priorities so that you can rest assured your assets are in good hands. For a consultation with a member of our team, give us a call at 713-936-9073. You can also fill out our online form to get in touch with us today.