There are two types of trusts, revocable trusts and irrevocable trusts. In most instances, a revocable living trust is the most efficient method of achieving a client’s goals. However, in certain circumstances, an irrevocable trust is more effective in accomplishing the goals of a client. David C. Hawkes, Esq. will help you determine whether a revocable living trust or an irrevocable trust is more appropriate for your situation and desired results.Asset Protection and Wealth Maximization
One of the main uses of irrevocable trusts is asset protection. The main goal of asset protection is to shield assets that could otherwise be reached by creditors. Usually a creditor has access to all assets held by a debtor. Because the creator of a revocable trust usually maintains control over the trust and its assets and has the ability to revoke the trust, it offers little to no protection from creditors. However, a creditor is not able to access assets that are not owned by a debtor. Therefore, irrevocable trust can help shield assets that would otherwise be accessible to creditors. As long as a transfer to an irrevocable trust is not done to defraud creditors, the law will usually respect the transfer and the assets will be shielded from creditors.Irrevocable Life Insurance Trusts (ILITs)
One of the most prevalent irrevocable trusts is known as an irrevocable life insurance trust (commonly referred to as an “ILIT”). At death, the proceeds of life insurance are includible in your estate for estate tax purposes. By having an irrevocable life insurance trust own the life insurance policy and also be the policy’s beneficiary, you can avoid the inclusion of the proceeds in your gross estate. Although it is an irrevocable trust, the terms often closely resemble those of the insured’s revocable living trust and some flexibility can be given to the trustee to modify the terms should unexpected circumstances arise in the future.
Other Irrevocable Trusts
- Domestic Asset Protection Trusts
- Special Needs Trusts
- Spendthrift Trusts
- Personal Residence Trust
- Charitable Trusts
Contact David C. Hawkes, Esq. for a free consultation to determine what estate planning vehicles fit your situation and needs. David C. Hawkes, Esq. will help you determine if an irrevocable trust is appropriate to accomplish your goals.