Boulder Will & Trust Attorneys
Say the word “trust” and images of the rich and famous generally come to mind. Irrevocable Trusts; however, are documents created by a lawyer for someone with assets they want to be protected from taxes, creditors or other obligations in order to provide for their loved ones.
Trusts are legal arrangements which allow for the ownership, management, and distribution of your assets. The person putting the assets into a trust is known as the grantor. A trustee is the person who oversees the trust, and the receiver of the assets in the trust is known as the beneficiary.
Assets protected by trusts may include:
- Real Estate and Other Property
- Life Insurance policies
Different Trusts for Different Needs
An Irrevocable Trust is a trust that, as its name suggests, cannot easily be undone, Once an irrevocable trust is established, it cannot be changed by the grantor, meaning the beneficiary and benefits provided to them stay the same. Additional assets can be added, however. This is different from a revocable trust which allows the grantor to make changes at any time.
Irrevocable trusts are established to minimize estate taxes, protect assets from creditors, and provide for family members who are minors, disabled, or have special needs, as well as a number of other purposes.
Asset protection is established when the signing of an irrevocable trust, although there may be applicable state laws that require a period of time before the assets are fully protected. And, of course, if assets are fraudulently transferred into a trust, then the courts may reverse transfer. There are few limits on how much you can transfer into an irrevocable trust, and the property is no longer owned by the grantor – it is now legally owned by the trustee on behalf of the beneficiaries. The trustee manages the trust according the arrangement, takes care of taxes on the trust (assuming the irrevocable trust is not a “grantor” trust), and provides the benefits to the beneficiary as intended. The beneficial owner of the trust’s assets includes all the beneficiaries.
Another type of trust is a Generation Skipping Trust. Generation Skipping Trust documents, while irrevocable, provide the grantor the ability to skip a generation in their passing along of assets. This is another legally binding document which is a wealth preservation tool for estates with significant assets or savings. A qualified attorney familiar with general trust law and taxes should be engaged to create these documents.
Irrevocable trusts, special needs trusts, and generation skipping trust arrangements are all subject to government regulations and tax laws. Taxes are different for trusts than for income or gifts. These are not simple documents like wills.
Your Reliable Denver and Boulder Irrevocable Trust Lawyers
It is important to work with a reliable lawyer when creating irrevocable trust documents for asset protection. The attorney can guide you in preparing the documents to provide flexibility for unforeseen changes. You will need to do this to assure the beneficiary(ies) will obtain the assets intended for them.
Rocky Mountain Healthcare Law’s team members are highly qualified to assist you with the creation and implementation of an irrevocable trust. They will work with you to provide protection to your assets and ensure that your beneficiaries are properly covered by your trust.