Annapolis Irrevocable Trust Attorney
According to Investopedia, Maryland is the richest state in the U.S. with the median 2017 household income coming in just shy of $81,000 per year. With this wealth comes the responsibility to manage it so that you can continue to live comfortably into retirement and leave behind some of your estate to family heirs after your death. One of the best ways to do this is through estate planning, and in particular, setting up trusts. A trust allows a person to move assets out of their name and into the name of their beneficiaries while they are still healthy and able to make financial decisions about their estate. After a person dies, the trust also helps the estate avoid certain tax implications and the probate process. There are numerous types of trusts, but they fall into two main categories of revocable trusts and irrevocable trusts. A knowledgeable Annapolis irrevocable trust attorney can help you determine which type of trust will better suit your wishes for your estate.
What is an Irrevocable Trust?
An irrevocable trust is specific in that it does not allow the creator to modify, amend, or revoke any of the terms of the trust. The opposite is a revocable trust, which allows the creator to maintain more control over the trust while living. While the general rule is that irrevocable trusts cannot be changed, there are exceptions to this rule depending on how the trust is set up. Irrevocable trusts can be challenging but the benefits make them worthwhile.
What are the Benefits of an Irrevocable Trust?
- The property listed in an irrevocable trust is not considered in the value of the estate when it is time to pay estate taxes. They can lessen the amount of estate taxes that will need to be paid as a result of your assets.
- Creditors can not go after assets that are in an irrevocable trust.
- When assets are set aside in an irrevocable trust, they can not be considered for determining whether or not you are eligible for Medicaid benefits. As org notes, Maryland has a five year look-back period for people who transfer assets. This means that it is in your best interest to set up an irrevocable trust well before you think you’ll need Medicaid benefits, because otherwise you could be ineligible or pay penalties.
Types of Irrevocable Trusts
There are different types of irrevocable trusts depending on where you want your assets to end up. Some common types include:
- Charitable trusts;
- Generation-skipping trusts;
- Life insurance trusts;
- Bypass trusts;
- Asset protection trusts; and
Contact an Irrevocable Trust Attorney About Your Estate
Irrevocable trusts should be well-planned out because they cannot be altered, but they are an excellent way to reduce taxes and keep your assets secure. If you are wondering what type of trust is best for your estate, it is smart to speak with a qualified Annapolis irrevocable attorney. The attorneys at Frame & Frame are here to help you through the estate planning process. Contact our offices at 410-255-0373 to schedule a free consultation today.