Could You Benefit from an Irrevocable Living Trust?
An Irrevocable Living Trust is a legal arrangement where the grantor (the person creating the trust) transfers ownership of their assets into the trust. Unlike a revocable trust, once an irrevocable trust is established, the grantor cannot modify, amend, or terminate it without the permission of the beneficiaries or by court order.
Our Elder Advisors Law team can help properly design and implement an Irrevocable Living Trust, which can provide an almost unsurpassed level of asset protection and keep your assets safe from the high cost of long-term care. Like Revocable Living Trusts, they spare your family the probate process’s delays, frustration, and expenses.
Other reasons to utilize an Irrevocable Living Trust include:
- Tax minimization
- Avoiding the risks of placing assets in the name of your children
- Protecting assets against predators, creditors, and lawsuits
Assets placed in an Irrevocable Living Trust can include a business, cash, investments, life insurance policies, and more.
Why an irrevocable living trust could be better than a revocable living trust for protecting your assets against the cost of long-term care.
The short answer is that under current Medicaid laws, assets in a Revocable Living Trust are not fully protected.
Why? Because any assets you place in a Revocable Living Trust are still available to you, the Grantor.
Therefore, Medicaid may determine that those assets must be used to pay for your long-term care. However, this is not the case with assets placed within an Irrevocable Living Trust, as long as it is properly designed and implemented to consider the latest laws governing Medicaid eligibility.
How an irrevocable living trust can protect your children’s inheritance.
When you transfer assets directly to your children, they typically become outright owners of the assets. They also become responsible for the risks associated with owning the assets. A properly drafted and implemented Irrevocable Living Trust will avoid:
- Loss of inheritances due to lawsuits, divorce, remarriage, or the inability of your children to manage money on their own
- Gift tax liability
- Income tax consequences for your children
- Problems with getting financial aid to cover educational and other expenses for your grandchildren
To determine if an Irrevocable Living Trust is right for you and your family, contact us today for a consultation.
