There are several kinds of irrevocable trusts

On Behalf of | Jul 1, 2019 | Blog

Trusts can be powerful instruments when they are included in Nevada estate plans. They can be tailored to fit the circumstances and wishes of the trustmaker, and they can effect the transfer of assets outside of probate. Broadly speaking, the two categories of trusts are revocable trusts and irrevocable trusts. An irrevocable trust cannot be altered once it is made, while revocable trusts can be changed by the trustmaker after they are established.

In many cases, irrevocable trusts may convey estate and income tax benefits. Placing assets into an irrevocable trust may also make it more difficult for creditors to reach them. This is because the trustmaker no longer owns the assets once they are transferred to the trust. Creditors cannot get to assets that the debtor does not own, generally speaking. There are several more specific types of trusts that are irrevocable trusts, including irrevocable life insurance trusts, irrevocable marital trusts and irrevocable charitable trusts.

Setting up an irrevocable life insurance trust as the beneficiary of a life insurance policy may avoid or lessen estate taxes on large policy payouts. A marital trust is designed to transfer assets from one to the other spouse when the first spouse dies. There are two types of irrevocable charitable trust, charitable remainder trusts and charitable lead trusts. In both types, a charity receives some portion of trust proceeds, up to 100%.

People who are considering their estate plans might want to speak with a lawyer. A lawyer who practices estate planning in Nevada may be able to help by analyzing the client’s circumstances and suggesting instruments to meet his or her goals. A lawyer might draft and file documents to establish wills or comprehensive estate plans, gather and organize client information or help the client structure the ownership of assets to re estate tax liability.