On behalf of David Whitlock at Whitlock Canter LLC
Our Paramus Law Firm Explains An Irrevocable Trust
An Irrevocable Trust is a legal document which cannot be amended or “revoked” once created. Irrevocable trusts offer tax advantages that revocable trusts do not. Irrevocable Trusts are often used to own life insurance policies to keep the life insurance proceeds out of an insured’s estate for estate tax purposes. Irrevocable Trusts are also used to make tax efficient gifts for the future benefits of one’s heirs – such as a Grantor Retained Annuity Trust or a Charitable Remainder Trust.
One of the main reasons for setting up an irrevocable trust is for estate and tax considerations. The benefit of this type of trust for estate assets is that it removes all incidents of ownership, effectively removing the trust’s assets from the grantor’s taxable estate. The grantor is also relieved of the tax liability on the income generated by the assets. While the tax rules will vary between jurisdictions, in most cases, the grantor can’t receive these benefits if he or she is the trustee of the trust.
The assets held in the trust can include, but are not limited to, a business, investment assets, cash and life insurance policies.
Another reason for the use of an Irrevocable Trust is for Medicaid Planning.
With our affordable and easy-to-understand approach to legal services, an irrevocable trust is no longer a confusing or complicated process. At Whitlock Canter LLC in Bergen County, New Jersey, we make irrevocable trusts easy to understand.