Over the years, thanks to hard work and resilience you’ve been able to garner many assets to your name and estate. Now that you’re thinking about your legacy and how and what you’d like to leave your loved ones, you likely have a lot to consider. Different kinds of trusts apply different rules to your assets, and it’s easy to feel like you’re in a whirlwind of choice.
For this post, we’ll be looking at two of the more fundamental trusts available through estate planning: revocable and irrevocable.
The irrevocable trust
You can probably guess the main feature of this trust by the name itself. This kind of trust cannot be adjusted after it is set up, but it also cannot be taxed. So in the passage of your assets from generation to generation or simply to its rightful hands, the full amount will arrive.
Not only will the amount not drop from typical tax measures, but irrevocable trusts cannot be touched by any potential lawsuits. One of the primary reasons it cannot be adjusted is because once you put assets into the trust you effectively give up your ownership of them.
The revocable trust
Now while you just read about a number of prime irrevocable benefits, there’s a chance that the very first fact of the paragraph stood out to you. In your decades of saving, you know that the only thing constant is change. While having large sums of money remained untouched by taxes might be an appetizing proposition, you realize that there’s a chance that your mind will change, or maybe circumstances surrounding your assets will. While revocable trusts have a different set of rules, the flexibility to change the trust instructions and the contents itself may be more appealing to you.
Leaving behind a legacy can be intimidating, especially when there are numerous assets that need to be addressed. For those who have a bounty of assets, an irrevocable trust features tax benefits that you might appreciate, but if one anticipates great amounts of change occurring, the revocable one may be better suited.
Estate planning can be a complicated process and needn’t be a solo mission. Leaving behind your legacy is something that ought to be taken seriously, and as such financial professionals as well as other legal counsels can do wonders in their assistance.