Trust funds are an excellent way to provide for loved ones even after the parent or caregiver passes away. That’s one reason any discussion with an Estate Planning Attorney in Dundalk MD should include the topic of those funds. One approach that should be considered closely is the irrevocable trust. Here are some of the advantages that come with this approach.
Difficult to Break
As the Estate Planning Attorney in Dundalk MD will explain, an irrevocable trust can only be breached under highly unusual circumstances. That is not necessarily the case with other trust funds that can be dissolved or restructured with relative ease. When the plan is to ensure a loved one with disabilities has a steady flow of income no one can easily take away, this approach makes a lot of sense.
Easing Tax Burdens in the Here and Now
While it’s true the person who establishes the trust remains the trustee, any assets held by the trust are no longer classed as personal holdings. This can provide a tax break for the individual who sets up the trust. The initial worth plus any appreciation that follows in the years to come will not be included in the personal income and will not be listed as assets on personal tax returns.
No Need for Probate
Any assets held in the trust do not have to go through the probate process. The person who assumes the role of trustee once the originator passes away simply disburses funds and manages the assets according to the provisions of the fund itself. That can be a wonderful way to ensure loved ones do not have to worry about covering basic living expenses while the rest of the estate is going through the probate process.
No Worries About Losing the Assets
Since any assets placed in the irrevocable trust no longer count as personal assets, they are protected if the individual is sued and the judge awards the plaintiff any type of financial compensation. While the assets not held in the trust could be seized and sold to settle that judgment, anything in the trust remains intact.
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