Irrevocable Trusts Lawyer in New York
Irrevocable trusts can be an important component of estate plans. Much of it depends on the purpose of the trust. There are many considerations, however, that must be taken into account before creating one.
At Testa Law Firm, Attorney Daniel Testa will thoroughly review your needs and wants when planning your estate and provide an outline of your best options, including the creation of an irrevocable trust. Contact us either online or at 315-255-3368 to schedule a free consultation today.
Understanding Irrevocable Trusts in Cayuga County
An irrevocable trust is a trust that cannot be changed, amended, or terminated after it is created (with some limited exceptions). By creating an irrevocable trust, the grantor is relinquishing their control over the assets placed in the trust. Irrevocable trusts are administered by a trustee for the benefit of the trust beneficiaries.
Pros of an Irrevocable Trust in New York
There are various reasons a grantor may choose to place assets in an irrevocable trust, including:
If done correctly an irrevocable trust can protect assets placed in the trust from Medicaid. Ie. if you enter a nursing home assets that were placed in an irrevocable trust before the 5 year lookback period will not be counted as assets to qualify you for Medicaid and will not have to be spent down. Many people choose to place their home in an irrevocable trust rather than reserving life use- by placing your home into an irrevocable trust rather than deeding it to your children with life use- you protect it from Medicaid and also protect the property from your children's creditors, divorce, lawsuits, etc.
It is possible to reduce your tax liability by moving taxable assets from your estate to an irrevocable trust. This is typically a more beneficial move for owners of large estates.
Irrevocable trusts provide protection to the assets that they contain. This includes protection from creditors, judgments, and divorce. People employed in highly litigious professions are most likely to use irrevocable trusts for this purpose.
Irrevocable trusts are a useful estate planning tool when you are providing for a family member with special needs. These trusts are often referred to as irrevocable special needs trusts, and they allow a beneficiary with a disability to receive funds for their living expenses without that income being used to disqualify them from receiving government benefits.
Cons of an Irrevocable Trust in New York
There are various reasons a grantor may choose against placing assets in an irrevocable trust, including:
Loss of Control
If you desire to maintain control over your assets, an irrevocable trust may not be the best choice for you. Changing the terms of an irrevocable trust is something that is not easily accomplished after it has been formed unless all parties (trustee and beneficiaries) are on board.
While the formation of an irrevocable trust may seem like a good idea when it is established, circumstances change, and it may not be the best choice down the road. Even so, you will not be able to easily change the terms to fit your new situation.
Terminating an Irrevocable Trust
In limited circumstances and jurisdictions, it may be possible to terminate an irrevocable trust by agreement when all parties, including the trustee and the qualified beneficiaries, agree to do so. Modification or termination of an irrevocable trust may also occur pursuant to a judge's order. Judges are more inclined to make these changes or terminate an irrevocable trust when it is obvious that the purpose of the trust has been fulfilled, has become illegal, or is defeated by compliance with the terms of the trust.
Otherwise, irrevocable trusts will end naturally pursuant to the terms that were established when the trust was created. It is typically dependent upon an event, such as the death of the person that created the trust, or it will end on a certain date.
Contact an Irrevocable Trust Lawyer Today
We at Testa Law Firm want to help you make the best choices for yourself and your family. To get started on your estate plan, contact our estate planning lawyer today by either using our online form or calling us directly at 315-255-3368. We will help you with trusts, wills, powers of attorney, and other estate planning documents that suit your specific needs.