Understanding irrevocable trusts

On Behalf of | Jul 18, 2017 | Trusts

People in Nevada can use irrevocable trusts keep control of assets that have been intended for their loved ones. Irrevocable trusts offer multiple advantages, such as tax savings, and may be more beneficial to use than revocable trusts or wills.

It’s important to note that irrevocable trusts have permanent terms that do not allow for any changes. In contrast, revocable trusts permit the individuals who create them to modify the terms or end the trusts as they choose.

There is more than one way to establish an irrevocable trust. Setting the trust during one’s lifetime is the least complicated method. It takes multiple steps, including the preparation of the trust document, the transfer of the assets to the trust and then making the trust effective with one’s signature on the agreement. The trustee will be obligated to adhere to the trust’s terms, which will detail how the assets are to be treated and who is to benefit from the distributions.

Irrevocable trust provisions can also be included in other types of estate planning documents that will not take effect until one’s death. For example, testamentary irrevocable trusts, or those included in wills, are not effective until the death of the creator. Individuals will be able to modify their wills, and if they so choose, the provisions of the irrevocable trust. After an individual’s death, the trust will be created by the executor of the estate, who will adhere to the guidelines provided in the will. The person who is designated as the initial trustee will then control the trust and obey the trust’s instructions.

People needing assistance with trust planning may want to consult an estate planning attorney. The lawyer could explain which type of trust may provide the best asset protection for a particular client.