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What is an irrevocable trust?

On Behalf of | Sep 27, 2023 | Estate Planning |

When it comes to planning your estate, there may be no wrong time to begin. Once you start considering the wide range of options, you may find the sheer number of choices confusing or unnecessary.

But, like your life, your estate plan should be uniquely tailored to what you and your loved ones need, as well as your business needs and interests. One type of estate planning tool that can help you do this is an irrevocable trust.

Irrevocable trust basics

A trust is a way of dividing ownership in property. The property’s original owner, known as the grantor, puts the property into the trust, where it is managed by a trustee for the benefit of the grantor’s chosen beneficiaries.

A grantor can set up a trust during their lifetime as either a revocable or an irrevocable trust. In a revocable trust, the grantor maintains a degree of control over how the trust is managed. An irrevocable trust gives the grantor much less control than a revocable trust, but has many important advantages.

Reasons people choose irrecoverable trusts

There are many motivations for choosing this type of trust, and the following are not exhaustive. Moving assets into an irrevocable trust is often done to shield the assets from estate taxes or qualify an individual for certain benefits, provided that the trust is set up appropriately within state law.

The irrevocable trust can also protect assets from creditors.

Final thoughts

Estate planning is deeply personal. An irrevocable trust that moves your assets may not be the best choice for your situation. It is just one type of estate planning tool, in addition there are revocable trusts and other types of trusts that you can also choose. Whatever you decide for your estate plan, just be sure to follow Washington’s estate planning and probate laws.