Why opt for an irrevocable trust when you cannot change it later
August 30th, 2010Estate planning and management requires the use of various instruments. One such is the irrevocable trust. As the name suggests, this type of trust incorporates terms and conditions that are not possible to change after the creation of the trust. It is, in this regard, that these trusts are completely opposed to the concept of revocable trusts.
Why then, would one opt for such a trust? There are various benefits of forming this type of trust arrangement. Here are a few:
1) Any entity can create an irrevocable trust while he/she is living. If the grantor is not the trustee, he/she can also become a beneficiary of the trust.
2) The assets are exempt from estate taxes. (As these assets is not the personal property of the grantor, you need not bother about taxation)
3) The irrevocable trust provides asset protection with ease. (It is safe from unscrupulous creditors and litigation suits)
Is there any way to change the provisions of the trust? Usually, the trust agreement has conditions for an acceptable change or modification. In most cases, all the parties involved – that is the grantor, the trustee as well as the irrevocable trust beneficiary – must reach a unanimous decision to change a certain term of the agreement.
Before you finalize any trust formation, it is best to talk to your accountant as well as your attorney. Financial and legal help is essential to come up with an agreement that is useful for all parties involved in the matter.

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