Besides the Revocable Living Trust, other trust documents may be a part of your overall estate plan. Some of these may be separate from your Revocable Trust, but many can be incorporated into it.
An irrevocable trust is not cancellable. Once you put it in place, it cannot be changed or revoked in most instances. Most irrevocable trusts require you to select someone other than yourself to be the trustee. This means you don’t have the same control over your assets that you do with a revocable trust.
Why would someone decide to put their assets into an irrevocable trust and lose control over those assets?
One large reason is tax avoidance. Estate taxes (or inheritance, or death taxes, as they are sometimes called) are calculated based on the total of what you own at the time of your death.
Today, estate taxes are not assessed until a person has more than $5.49 million in assets. This is called the estate tax maximum exemption amount.
For an individual with over $5.49 million, or a couple with combined assets of $10.98 million, establishing an irrevocable trust can take the assets above the maximum exemption amount out of their estate…for the benefit of their children.
ASSET PROTECTION TRUSTS
Because we still have control over the assets in a revocable living trust, the trust does not provide protection for the assets within it. However, there are trusts available to protect these assets. The type of trust you select will depend on a number of factors, including types of assets, your goals for those assets, the degree of control you are willing to relinquish, and the location of those assets.
A plan to protect your assets should be put in place well in advance of the threat of a claim or lawsuit.
If you are an author with copyrights, you may wish to include provisions in your trust to address your literary assets. If your heirs don’t have a clue about how to continue marketing and managing your literary works, you can put a plan in place that appoints the right people to manage those assets if you are incapacitated or deceased.
Americans love their pets. We have clients who sometimes attend their first legal consultation with plans already in place to take care of their pets…even if they haven’t yet decided who will take care of them if they are incapacitated or disabled.
A pet trust is probably not what you might think. You can’t actually leave money to a pet – it’s not legal. But we can leave money with specific instructions for the care of our pets. A pet trust assures that beloved animals are taken care of the way we instruct with the money we leave. It is legally binding on the people we appoint to manage the money and care for the pets.
A pet trust can be especially useful if you own an animal with a long lifespan, or one that is especially expensive to keep. Tortoises and certain exotic birds could well outlive you. A horse can outlive you, and its care and boarding could be quite expensive. A pet trust will ensure that the quality of your animals’ lives won’t diminish when you’re not around.