We Help Individuals Build Comprehensive Estate Plans with Irrevocable and Revocable Trusts
Trusts are versatile estate planning tools that can serve a variety of purposes. When planning your estate, incorporating one or more trusts into your plan can help you achieve your goals while also providing flexibility, tax savings, and other benefits. We routinely utilize irrevocable and revocable trusts in clients’ estate plans, and Fred Eisman can help you choose the trust (or trusts) that make the most sense for your personal circumstances.
What Are the Different Types of Trusts?
There are two main types of estate planning trusts: (i) irrevocable trusts, and (ii) revocable trusts. Irrevocable trusts come in several different forms, and each form serves its own specific planning-related purposes. Revocable trusts are more general in nature; and, for many people, a revocable trust (or “living trust”) will be a centerpiece of their estate plan.
Irrevocable trusts are designed to serve specific estate planning goals. Depending on what you have in mind, it may make sense to incorporate one or more irrevocable trusts into your plan. Some examples of commonly used irrevocable trusts include:
- Credit Shelter Trusts reduce estate taxes for married couples.
- Charitable Lead Trusts provide income to a charity while reserving the remaining trust principal for a named beneficiary.
- Charitable Remainder Trusts provide income to a named beneficiary while reserving the remaining trust principle for a charitable organization.
- Irrevocable Life Insurance Trusts (ILITs) are set up to own a life insurance policy. When structured properly, the death benefits from the policy are free from inclusion in the gross estate of the insured.
- QTIP and QDOT Trusts are used to postpone payment of estate taxes for married couples.
- Special Needs Trusts preserve eligibility for government benefits when leaving assets to a beneficiary with special needs.
A revocable trust can be used to distribute your assets at the time of your death. This is similar to the primary purpose of creating a Will, although there are a number of reasons why utilizing a revocable trust will prove advantageous in most circumstances. Once you establish a revocable trust you can modify the terms of the trust as necessary during your lifetime and you can continue to place new assets into the trust in order to ensure they will be distributed according to your final wishes.
What are the Benefits of Using Trusts for Estate Planning Purposes?
When Fred Eisman counsels clients regarding the use of irrevocable and revocable trusts, he explains all of the benefits in detail, and also goes over the specific limitations that apply to each different type of trust. Generally speaking, the benefits of utilizing one or more trusts in your estate plan include:
- Exercising greater control over the distribution and use of your assets;
- Minimizing or avoiding tax liability; and,
- Keeping your assets out of probate.
Request an Initial Estate Planning Consultation at EismanLaw PLLC
If you have questions about incorporating an irrevocable or revocable trust into your estate plan, we encourage you to get in touch. To request an initial estate planning consultation at EismanLaw PLLC please call 914-864-3355 or contact us online today.