Woburn Irrevocable Trusts Lawyer

Assisting Our Clients With Tax Minimization and Asset Protection

When creating an estate plan to protect your assets, choosing the right kind of trust is essential. An irrevocable trust is a powerful estate planning tool that can help you reduce estate taxes, avoid probate, and protect assets. There are many other benefits to irrevocable trusts, which may make them perfect for your financial goals.

If you’re interested in creating a trust, working with an estate planning attorney is essential. Our legal team will examine your estate plan and your current finances to determine whether an irrevocable trust is right for you. We can also advise you of other estate planning tools that you can use to protect your assets and safeguard the financial future of your family.

The Heritage Law Center is here to create the right estate plan for you. Don’t hesitate to reach out to our team today. For a free consultation, contact our law firm by calling (617) 765-9307.

What is an Irrevocable Trust?

An irrevocable trust is a trust that you can’t dissolve. Unlike a revocable trust, once you create the trust and transfer assets into it, those assets are no longer under your control. You’ll assign a trustee to manage and maintain your assets in the trust.

The primary purpose of an irrevocable trust is to move the assets from the grantor’s (person who created the trust) control. Moving assets into an irrevocable trust lowers the overall value of your estate, which leads to minimizing the impact of estate tax. This helps your family receive more of their rightful assets after you pass away.

Irrevocable trusts may offer less flexibility than other trusts, but the benefits they provide are much greater.

What Are the Most Common Types of Irrevocable Trusts?

There are two main kinds of irrevocable trusts: living trusts and testamentary trusts.

The main differences between the two include the following:

Living Trust

A living trust is created by an individual while they are still alive. They add assets to the trust during their lifetime and create instructions for distribution upon death.

The main kinds of living trust include:

• Irrevocable life insurance trust: Used to hold life insurance policies and remove insurance proceeds from your estate.
• Irrevocable Medicaid trust: Protects assets from MassHealth for long-term care as long as they’re placed in the irrevocable Medicaid trust prior to the five-year look-back period.
• Charitable remainder trust: Generates a potential income stream for you or other beneficiaries you choose, with the remainder of the assets going to one or more charities.
• Charitable lead trust: Provides financial support to one or more charities for a period of
  time, with the remaining assets eventually going to family members or other beneficiaries.
• Grantor-retained annuity trust (GRAT): Lets families transfer wealth to heirs without limitations from the federal gift exclusion.
• Qualified personal residence trust (QPRT): Places your home into a trust for a set period, then passes the title to your beneficiaries.

Testamentary Trust

A testamentary trust is created after the death of the grantor. The trust is funded by assets from the deceased’s estate according to their will. Altering the will before death will change the terms of the trust.

What Are the Benefits of an Irrevocable Trust?

Irrevocable trusts can be used for many things, and they have lots of benefits that may fit into your estate plan.

The many benefits of irrevocable trusts include:

• Lowering your estate taxes by removing valuable assets from the estate. Any property in an irrevocable trust doesn’t count toward the estate value, minimizing your taxes.
• Protects assets so you can qualify for government benefits like MassHealth for long-term care (assets must be in the trust prior to the five-year look-back period).
• Transferring a principal residence to children with more favorable tax rules.
• Holding life insurance policies so the proceeds from that policy can avoid estate taxes.
• Protecting assets from creditors.

Irrevocable trusts are more complex than revocable trusts. They also require more forethought and planning, as they can’t be changed or revoked once created. If you’re interested in creating an irrevocable trust, contact our team today for more information.

How Do You Create an Irrevocable Trust?

Creating an irrevocable trust is a complex legal process. To set up a trust, we’ll first talk to you about your specific situation and your goals. We’ll then draft the trust document to meet your unique needs. It will contain instructions for your trust administration, including who the trustee (person who manages the trust) is and who your beneficiaries are. You can also include instructions for asset distribution, like conditional terms that must be met before assets are distributed.

Next, you’ll transfer assets into the trust. Choosing the right assets to include in the trust is critical, as they can’t be removed once the trust is established. You’ll surrender ownership of these assets and give up control to the trustee. Those assets will no longer be part of your taxable estate.

Once your trust is set up, it’s important to monitor the assets in your trust. Although you don’t have control over them anymore, the trust will help you ensure that your beneficiaries are taken care of. To learn more about creating a trust as part of your estate plan, contact our team today.

What Can an Irrevocable Trust Lawyer Do for Me?

Irrevocable trusts are powerful estate plan tools that can protect your assets and set your beneficiaries up for the future. Our attorney will ensure that this type of trust meets your financial goals and help you create one with assets that benefit you the most.

The Heritage Law Center has been serving Woburn for years now, and we’re confident we can create an estate plan that protects you, your family, and your assets. To learn more about our services and how we can help you, contact us by calling (617) 765-9307 today.