Good Reasons to Establish an Irrevocable Trust

An irrevocable trust places your assets out of reach to anyone but the trustee and beneficiaries. It’s an effective estate planning tool when it’s used judiciously, but it’s not right for every situation. If you’re unsure if this is an option for you, a trust administration lawyer in Las Vegas can offer further guidance.

Why Do You Want to Create an Irrevocable Trust?

Most legal contracts and entities are easy to change if your circumstances change. An irrevocable trust is meant to be permanent; except under very specific circumstances, it will only cease to exist when the settlor dies. Before creating one, ask yourself:

• Why do you want to create this trust?

• Do you have the right assets to fund it?

• Is there a chance that you may need these assets someday?

• Is there another legal way to accomplish the same goals?

When Is an Irrevocable Trust a Good Idea?

There are only three good reasons to establish an irrevocable trust, which are:

1. You want to avoid estate taxes. This reason is why life insurance policies are sometimes placed in such a trust. It allows you to pass gifts and transfer assets to spouses, family members, or charities without passing on a tax to them in the process.

2. You need to enroll in a government program. No one plans to become disabled or need assistance to pay for long-term medical expenses. Placing assets in a trust allows you to pass on your assets to your family untouched while helping you meet income restrictions for programs like Medicaid and SSI that cover the cost of medical care.

3. You need to protect your assets. Those who are in high-risk occupations, such as medical care providers, stock brokers, and developers can place assets in a trust to shield them from lawsuits. This is a distinct advantage for professionals whose personal assets aren’t protected by a corporate structure.

What Are the Consequences?

For many things that seemed like a good idea at the time, there are unintended consequences. Putting assets in a trust may defer estate taxes when the settlor dies, but there may be a capital gains tax later that mitigates any advantages. Placing a home in an irrevocable trust may eliminate a tax on the beneficiary, but it will make it difficult to obtain a second mortgage or improve the property.

If you have questions about trust or estate planning, an attorney at Sean Tanko Law has answers. Contact us today to request a consultation.

When Do You Need a Living Will?

No one can predict the future, but an estate planning attorney in Las Vegas can help you prepare. Living wills, also known as advance directives, are legal documents that speak for you when you can’t make your wishes known. They differ from health care proxies by taking the burden for making tough medical decisions off of your family’s shoulders.

Why You Should Have a Living Will

Anyone over 18 years of age should have a living will. It can be as simple as a document regarding life-support and emergency resuscitation measures or an elaborate plan detailing all possible end-of-life wishes. A living will takes the uncertainty out of the equation if sometime in the future you have to face a terminal illness or end up in a vegetative state.

What Goes Into an Advance Directive?

You should spell out your specific wishes regarding life-saving care if you’re unconscious, on life support, or otherwise unable to provide consent. You can add a “Do not resuscitate” order if there is little chance of recovery, but specify certain other treatments or medications if they will save your life. The legal authority of doctors over these matters will end at your death, except in cases where you want to permit an autopsy or organ donation.

Can My Family Ignore My Wishes?

No one can treat you without your consent. When you’re unable to give it, doctors must turn to your family unless there’s a legal document that provides instructions. Your living will confers the status of durable power of attorney (DPOA) to doctors in a life or death scenario. While it can be revoked or changed by you at any time during your life, family members have very little recourse at the end of it. In fact, doctors may find themselves in legal jeopardy if they ignore your directives. Talk to an estate planning lawyer about creating one today so you won’t have to worry about tomorrow.

The Benefits of Creating a Silent Trust

A silent trust is one in which the beneficiary knows little about what he or she is entitled to. In some cases, a trustee is directed to speak to a representative of the beneficiary regarding any matters related to the trust’s administration. For the most part, a silent trust is designed to provide for a child or grandchild without making a public spectacle about how much the family is worth.

Silent Trusts Can Prevent a Child From Being a Target

If a friend, colleague or scam artists knew that a wealthy person’s child had access to a portion of the family fortune, he or she could be the target of a lawsuit. Those parties may also try to use a young and impressionable family member as a means of funding a speculative business venture or a lavish lifestyle. However, if a child doesn’t know about an incoming inheritance, it provides a layer of protection for the beneficiary and the family as a whole.

Silent Trusts Allow a Child to Build His or Her Own Legacy

An individual may derive a sense of pride or purpose from starting a business from scratch or working hard for a promotion at work. While those who benefit from a parent’s wealth could be hard workers in their own right, the presence of family money may tarnish their accomplishments. Critics may argue that a beneficiary only got promoted to stay on a family’s good side or that family connections resulted in a start-up business being successful.

Trusts Can Also Help Prevent Probate

When properly constructed, trusts may make it easier for some or all assets to avoid probate. However, if necessary, a probate attorney in Las Vegas may review an estate plan to determine if there is a need to go through the process.

Different Types of Non-Probate Assets

If you’re considering creating a will and believe that it would be wise to start planning your estate, you should know more about the probate process and the types of assets that are considered non-probate. The probate process is a lengthy one that can sometimes cause issues with your assets and who they are given to. By avoiding the probate process, you’ll be able to have a direct say in what happens to some of your property and assets.

What Is the Probate Process?

Probate is a type of legal process wherein your final debts are settled within a probate court. The legal titles of your property are also handed over to the people who you’ve marked as your beneficiaries and heirs when drafting your will. Although this is a court-supervised process, there’s hardly any supervision by members of the court. The actual process typically involves filling out a substantial amount of paperwork in order to pay off any taxes and debts with the deceased individual’s assets.

What Assets Are Classified as Non-Probate?

There are some assets and types of property that may classify as non-probate, which means that these assets can go directly to your beneficiaries without being taken through the time-consuming probate process. For instance, assets that are jointly owned with your spouse or another individual through the standard rights of survivorship will be able to avoid the probate process. The same is true for life estates and living trusts. Any assets like IRA’s, life insurance policies, and annuities can be given directly to beneficiaries.

What to Consider When Planning Your Estate

While avoiding probate can be beneficial, there are times when your assets could go to people you don’t want them to. For instance, if you have a joint account at your bank with your spouse but want the assets to be given to your children, the account will go directly to your spouse. An estate planning lawyer in Las Vegas may help craft an estate plan to ensure your wishes are carried out.

Different Types of Trusts Available to You

While you’re conducting estate planning for the future, you may want to focus on creating a trust, which is a type of legal entity that allows a second party to hold assets that will eventually be provided to a third party or beneficiary. Given that there are numerous types of trusts that you can choose from, you’ll want to understand the differences between these options before selecting one. You can also obtain the services of a trust administration lawyer Las Vegas if you want to be provided with advice while creating a trust.

What Is a Trust?

A trust is a type of financial agreement that’s made between you and two other parties. The second party will hold your assets for the third party who will eventually receive the assets. These assets can include your estate or any kind of property. The trustee who is supposed to manage the trust will be titled within the agreement that’s made. The third party can be one or more beneficiaries of the trust.

Main Types of Trust

There are five primary types of trust that include living, revocable, testamentary, irrevocable, and funded/unfunded trusts. While these are the main types for you to select from, there are a variety of others that may apply to you. A living trust is one that’s made during the grantor’s lifetime wherein the property or assets contained within are meant to be used during their lifetime before being provided to the beneficiary upon the grantor’s death. A testamentary trust details who should receive assets upon the grantor’s death, while a revocable trust is one that can be changed or closed at any time. On the other hand, an irrevocable trust cannot be changed, and the assets are unable to be moved back to the grantor. Funded and unfunded trusts are trusts that can have assets placed into them during or after the death of the grantor.

Benefits of a Trust

The main benefit of creating a trust is that it can help you reduce the estate taxes that your beneficiaries will need to pay upon your death. Other benefits include the ability to avoid probate and the requisite court fees, to protect your assets from creditors, and to allocate your assets into the right hands.