Many trust-based estate plans use Revocable Trusts due to the continued control of assets enjoyed by the clients. However, there can be very good reasons for creating an Irrevocable Trust. Irrevocable Trusts allow you to give up control and ownership of an asset during your life, but not yet give ownership to others. Instead, the asset remains in a protected state and subject to rules we have designed.
One example is the use of Irrevocable Life Insurance Trusts (ILIT) for clients who may face estate tax liability at the end of their lives. An ILIT allows a powerful method of moving value out of your estate so that it does not face the estate tax and can pass to your family tax-free.
A more common use of Irrevocable Trusts is for asset protection purposes. Many of our clients use Irrevocable Trusts to shelter assets against the potential costs of nursing home care later in life. Click here for more information about our Elder Law / Medicaid Planning services.