Adults should have a comprehensive estate plan in place so their loved ones can follow their wishes when they die. Most people have a will written out as part of the estate plan. For those who have considerable assets, a trust might be in order.
When you’re ready to create a trust, you’ll have to determine if you want to have a revocable or revocable trust. Consider these three points about an irrevocable trust if you’re thinking about this for your estate plan.
#1: You can’t change the terms without permission
An irrevocable trust can’t be changed or dissolved unless you get permission from everyone who’s part of the trust. You should only use this type of trust if you’re sure about all of the terms you’re including. Being certain about the beneficiaries is imperative because you won’t be able to change those if your relationship with them changes.
#2: Contents have protection from creditors
The assets held by the trust can’t be claimed by your creditors because they’re owned by the trust. You don’t have any control over them, so creditors can’t touch them. This is an important point for anyone who has considerable debts that they’re concerned might eat away a good portion of their estate.
#3: Privacy might not be protected
One of the downsides to an irrevocable trust is that it may not provide the privacy that you’d expect. If the remainder of the estate goes through probate, the fact that there is an irrevocable trust in place will likely become part of the public record (although not its terms).
Determining exactly what you need in your estate plan is important. Working with someone who’s familiar with your situation and who can help you to protect your wishes is important.