Irrevocable Trusts Vancouver, WA

While an Irrevocable Trust is never a legal requirement, they have many advantages. A careful analysis of your assets, goals and your heirs’ needs is the only way to judge if a trust is right for you.

Irrevocable Life Insurance Trusts, or ILITs, are specifically designed to hold life insurance. Life insurance is a flexible estate planning tool, and can be used in conjunction with many Irrevocable Trusts. For example, an excellent plan for avoiding conflict in a second marriage or blended family is purchasing life insurance to fund trusts so your spouse and children from prior relationships can part on good terms. Further, life insurance in Irrevocable Trusts is often critical components in business succession planning.

A “Corporate Trustee” is a bank or trust company serving as trustee. Corporate Trustees have fee schedules available on request. Typically, the Corporate Trustee charges a percentage of the trust’s assets’ fair market value; such as 1.5%. When you ask if the cost is expensive, you have to balance the need for a Corporate Trustee with the services provided. If a no family member is qualified, a Corporate Trustee is an excellent alternative. Further, an interested person can always challenge a fee and have the court review fees. Always balance a Corporate Trustee’s power by appointing a responsible Protector team.

In a Trust, a Protector is a person appointed to oversee the trustee. A Trust Protector may be granted many powers, but typically has the power to remove and replace the trustee without the use of courts or lawyers.

An Irrevocable Trust is, Irrevocable. If you appoint a person or institution as trustee and later regret that decision, your options to remove and replace that trustee are limited and expensive. If you include a Protector in the trust:

• Trustees will be more likely return your calls faster, as they can be easily removed.

• If the Trustee becomes incapacitated, inattentive, involved in a dispute with a beneficiary or otherwise problematic, the Trustee may be removed quickly and inexpensively.

• The Protector can act as a form of communication between a Trustee and beneficiaries and avoid needless litigation.

• The Protector can obtain data from a Trustee that might otherwise not be released.

• The Protector can have other powers, which allow them to address changes in the law, circumstances and the tax code.

Banks and Trust companies typically charge a percentage of the trust’s value each year. Corporate Trustees provide these fee schedules on request and sometimes publish them on websites. Non-corporate Trustees generally charge an hourly rate.

A well drafted Irrevocable Trust clearly states where assets pass when a beneficiary dies. A good Estate Planning Lawyer asks you what result you wish and drafts the trust accordingly.

There is no such thing as an Irrevocable Living Trust. This is a combination of Revocable Living Trust and Irrevocable Trust. A “Living Trust” is a trust that can be modified and revoked.

Simply put, the Grantor cannot revoke an Irrevocable Trust while he can revoke a Revocable Trust. These two trust groups have different Estate Planning and Asset Protection purposes.

An Irrevocable Trust can be useful for Medicaid Planning. In short, the grantor can form a trust, transfer assets into the trust and then wait out the Medicaid look-back period. Once past, the grantor can apply for Medicaid while the property remains safely in the Irrevocable Trust, sheltered from children’s divorce and creditors. Using Irrevocable Trusts in Medicaid planning is complex. Only attempt such planning after a thorough Estate Planning Lawyer’s analysis.

Irrevocable means that the Trust cannot be “revoked,” meaning it cannot be closed down by the Grantor.

A Trust Beneficiary is a person or entity entitled to receive benefits from a trust.

A Contingent Beneficiary is a person or entity entitled to receive benefits from a trust, dependent on a contingency.