When you’ve worked hard to accumulate assets and property over the course of your lifetime, it’s important to do whatever it takes to preserve as much of that wealth as possible for your loved ones. One way you can do this is through an irrevocable trust, which allows you to protect what you’ve earned, avoid costly estate taxes and prevent losing a substantial amount of your assets if you need long-term care sometime in the future. You should contact an experienced irrevocable trust attorney in Pennsylvania to determine whether it is the best option for you and your family.
To set up an irrevocable trust in Pennsylvania, you, as the trust’s creator (also known as the “settlor”), would place a certain amount of your money in the trust, naming an executor to oversee it. This executor should be an individual you know and can depend on to perform all of the duties required in this role.
Unlike a revocable trust, which you can change at any time, an irrevocable trust essentially means that you give up ownership of the assets contained within it. This can be a frightening thought for many people, although the benefits usually far outweigh the possible risks (which are quite minimal). Just like any other trust, you will be able to name beneficiaries, clearly outlining who you would like to receive which assets and property.
Avoiding taxes and probate with Pennsylvania irrevocable trusts
One of the top benefits of an irrevocable trust is the fact that the assets within the trust are no longer subject to taxation once you pass away. The money in the trust will be distributed to your heirs quickly and without any estate taxes being levied.
Irrevocable trusts also do not need to go through probate, which can otherwise be a drawn-out process that causes headaches for your loved ones. And because of this, the extent of your holdings will be withheld from public records.
Irrevocable trusts and long-term care considerations
Another big concern you might have is what will happen to your wealth if you need to enter a nursing home for long-term care. Most of us have heard the horror stories of how the costs of this care can drain a person’s savings in a matter of months or a couple of years — even if that person had substantial assets.
When you place a large share of your assets in an irrevocable trust, that money cannot be counted as resources when it comes to qualifying for Medicare and Medicaid benefits. This is not the case with revocable trusts, as the assets contained within them do get counted as resources — and you may not be able to qualify for public assistance to pay for long-term care.
Finally, it is important to understand that irrevocable trusts allow you access to cash flow through the income they produce. Thus, you may continue to live off the income of the trust, even though you will not have access to the principal.
As you engage in the estate planning process, consider the value provided through an irrevocable trust. It may be the solution you need to protect your assets and property both now and in the years to come.
Contact our experienced Pennsylvania irrevocable trust attorney
You should consult with experienced Pennsylvania irrevocable trust attorney Joe Frabizzio to determine the best and most cost effective strategy for your family. Proper estate planning could help your family save tens of thousands of dollars in estate taxes and probate costs.
Call us for a free consultation to learn more: (610) 667-2988.