If you have estate planned or are currently estate planning, especially if you are an older American, you likely have heard the term, irrevocable trusts. However, should an irrevocable trust be part of your Juneau, Alaska, estate plan? While this blog cannot answer that question for you, we can give you some context.
What is an irrevocable trust?
As the name suggests, an irrevocable trust is a trust that is not revocable, hence the name. It is this non-revocability that gives you a lot of benefits, like tax benefits, potential access to government benefits, asset protection, etc.
How is it irrevocable?
The irrevocability comes from the fact that the assets (business, investment assets, cash, life insurance policies, etc.) are transferred from your name into the name of the trust. This means that you no longer have control over them. In addition, as the grantor, you cannot receive the benefit to gain the benefits of a Juneau, Alaska, irrevocable trust.
What if I get sued?
One of the key benefits that is often underrated is asset protection. If you get sued, none of the assets in the irrevocable trust is in your name. This means that, even if you lose a lawsuit, the winning party cannot gain access to any asset within the irrevocable trust, even if you are running the business in it.
One of the most common types of irrevocable trusts is the inter vivos trust, more commonly known as a living trust, known as such because it is created while you are alive. This is usually created to get some kind of Juneau, Alaska, government benefits. For example, many government benefits for those later in life have means testing that are only for those with very few assets. A living trust can allow one to transfer their assets into that trust to qualify for these government benefits. However, as these rules are complicated, you usually need an attorney to qualify.
The other type of irrevocable trust is called a testamentary trust. This is created at death by your Juneau, Alaska, estate documents. It can be changed before you die because it is not actually created until you die.