Irrevocable Trusts – Many of the oddly named Trusts out there are of the Irrevocable variety. In short, this means you, as the creator (Grantor) of the Trust, are in some fashion, giving up the rights of ownership & control over the assets placed in the Trust… and you are making this change permanent — No “Take Backs”.
However, in application, this is not as dire or cut-and-dry as it sounds. While you might be turning over the principal value of the assets to the Trust, you can still return to yourself (or others) income & annuity payments generated by the Trust principal and in some configurations, still pass the Trust assets on to your heirs who can continue receiving the same benefits as you.
Because you, the Grantor, are in essence relinquishing control over the asset(s), certain beneficial properties suddenly become bestowed upon them. Beneficial properties that include: Protecting the assets from creditors and a Step-up in Basis for assets that have appreciated.
While giving up control over something you’ve worked hard to build or own is a decision to weigh carefully… remember, a key reason to use an Irrevocable Trust of some variety, is to take advantage of these asset protections & the step-up in basis of a highly appreciated asset, thereby saving what would have ordinarily been paid in taxes on the Capital Gain!
Contact me to discuss further how a Trust might be beneficial to you!
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