BULLWINKEL & BROOKS, L.L.C.
For a majority of individuals that complete some sort of “advanced” estate planning (i.e. planning beyond the simple wills), a revocable living trust usually is sufficient. However, there are a certain group of individuals that require additional planning beyond the revocable living trust. For example, some individuals have a high net worth and want to reduce their estate tax exposure. To do so the individuals turn to certain irrevocable trusts to complete their estate planning. Other individuals who want to maximize their estate tax planning and provide a charitable benefit also make use of certain irrevocable trusts. Still, others who are planning for their long term care may want to establish an irrevocable trust to help plan for this circumstance.
Irrevocable trusts are slightly similar to revocable trusts in that the trust is still an extensive set of instructions that you, as the Donor, create that tells a helper (referred to as a “Trustee”) what you want done with the trust assets. However, unlike revocable trusts, an irrevocable trust, as the name implies, means that the Donor cannot revoke or amend the trust once it is created. The Donor should not serve as the trustee, but instead must name another individual to serve as trustee. The trustee of the irrevocable trust controls and administers the assets in accordance with the set of instructions that the Donor creates. Finally, as the trust is irrevocable, the trust typically obtains its own tax identification number and usually files its own income tax returns.
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