It is important to consider what will happen to your assets after you are gone. Failing to plan ahead can leave your family members to deal with immense state taxes and disagreements over who should receive what from your estate. One good option for avoiding these troubles is to establish an irrevocable living trust. Although this type of living trust is associated with people who have extreme wealth, a trust can also be set up for individuals with modest assets.
Irrevocable trusts are typically used to divide ownership interests for a certain asset or group of assets between several people for protection from creditors, planning for long-term nursing home care, or minimizing estate taxes. Unlike other trusts, assets in an irrevocable trust cannot be modified or taken out with being taxed.
Creating this type of trust can be a complicated process, so it is best to work with a qualified estate planning attorney if you are interested. If you need help setting up your irrevocable living trust, contact the Chicago irrevocable living trust attorneys at Peck Ritchey, LLC by calling (855) 328-5787 today.
Why You Need a Lawyer for an Irrevocable Living Trust
The process of estate planning can be overwhelming and complex. There are many advantages to setting up an irrevocable living trust, but it requires the assistance of an experienced lawyer who fully understands estate planning law and can ensure that your wishes are made official. An attorney can also help you understand the benefits as well as the consequences of setting up an irrevocable living trust.
By hiring skilled legal counsel for your estate planning needs, you can avoid mistakes that may ending up costing money for you and your family in the long run. A lawyer will ensure you get the full benefits of your irrevocable living trust while limiting the risks of the trust being contested.
Why Choose Us?
The irrevocable living trust attorneys at Peck Ritchey, LLC have a combined 100 years of collective experience in estate planning and estate law. Kerry Peck is a prominent figure in estate law in Illinois. Mr. Peck is president of the Chicago Bar Association and has received numerous awards, including being named a Super Lawyer for 11 consecutive years. Partner Timothy Ritchey has testified as an expert before the Illinois Senate on amendments to the Illinois Probate Act and chaired the Probate Practice Committee for the Chicago Bar Association.
Every attorney at our law firm brings years of experience and knowledge about trusts and handling estates. Our estate planning lawyers will make sure that any client who comes to us receives the best possible legal assistance so that their final wishes are met when setting up a trust.
What Are Irrevocable Living Trusts?
There are several types of irrevocable trusts that meet different purposes. The two main reasons for creating an irrevocable living trust are to protect assets and reduce taxes. Irrevocable trusts can also be established to ensure that these funds are fully protected and not misused in any way.
An irrevocable living trust is set up with a grantor, a trustee, and a designated beneficiary or beneficiaries. Once the grantor places funds into the trust, the grantor cannot revoke it, and it is considered a gift. The grantor can also determine the terms and the uses of the trust’s assets with the trustee and beneficiary’s consent. Any individual besides the grantor may serve as trustee, such as spouses, children, family members, or friends.
There isn’t a set limit to how much money or property is put into an irrevocable trust. However, once the assets have been transferred, you cannot use or benefit from them. If you do, the assets will be subject to estate taxes. If you transfer over a certain amount, you will be required to file a gift tax return and pay gift tax.
Irrevocable Living Trust FAQs
Many people have never heard of irrevocable living trusts, and thus have many questions about them. Some of the answers to common questions we hear at our office are listed below.
What Assets are Transferable to an Irrevocable Living Trust?
Any type of asset can be transferred to an irrevocable trust, including cash, stock portfolios, life insurance policies, real estate, and other business interests. Some assets and property are better to place in trust than others, so ask an attorney about what assets should be included.
How Do Irrevocable Living Trusts Provide Adequate Protection for Assets?
Making sure your assets and property has protection from creditors is a very important reason to set up a trust. To ensure that your trust is fully protected, it should be irrevocable. If you still have the ability to amend the trust and transfer the assets back to you or your family, a creditor could capture those assets at a future date, rendering the trust useless.
What are the Different Types of Irrevocable Living Trusts Available?
There are commonly used irrevocable living trusts that have specific purposes and benefits. One type is a life insurance trust, which protects a life insurance policy proceeds from creditors and estate taxes. A split interest trust provides income to one set of beneficiaries for a specific amount of time and provides income to another set of beneficiaries at a different time. Other irrevocable living trust types include spousal lifetime access trusts, charitable trusts, qualified personal residence trusts, and grantor-retained annuity trusts. To learn which trust type will best suit your needs, contact a lawyer to discuss the details of your situation.
Can Modifications Ever Be Made to an Irrevocable Living Trust?
An irrevocable trust can include certain provisions that allow for modifications if a situation arises where it is necessary. One example of a modification includes establishing a trust protector. A trust protector is basically a fiduciary, such as an attorney or accountant, who has limited authority over the trust. In some situations, a trust may need to be amended. A probate court will also allow modifications when an entity that is named as a beneficiary changes its structure.
Contact an Irrevocable Living Trust Lawyer for Help
Planning for your estate is a difficult and complicated endeavor. If you need to establish an irrevocable living trust, Peck Ritchey, LLC will help simplify the process. Our Chicago estate planning attorneys can draft a living trust for you that will meet your needs. Contact us at (855) 328-5787 to discuss your options.