Whether you need to protect assets from creditors or lawsuits or want to prevent asset loss for your beneficiaries during Medicaid estate recovery, an irrevocable trust can protect assets you wish to preserve.
The attorneys at Commonwealth Life & Legacy Counsel know how to navigate the complex rules of creating, funding, and managing a trust. Call today at 434-589-2958, or in or near Powhatan at (804) 598-1348 to schedule a free consultation with a trust lawyer who cares.
Irrevocable vs. Revocable Trusts
Both irrevocable and revocable trusts can help your loved ones avoid probate after you pass away, by allowing the trustee to begin distributing assets that are owned by the trust to your intended beneficiaries privately and in a much shorter period of time than a Will that must go through the probate process.
The primary difference between a revocable and irrevocable trust is that you can still amend, cancel, or move assets in and out of a revocable trust. Once you create and fund an irrevocable trust, you give up your right to ownership of the assets in the trust, and the trustee takes over managing the trust and its assets.
Due to your ability to manage and control the assets in a revocable trust, they are not protected from creditors and are counted for Medicaid purposes, because your creditors have the same access to your assets as you do. In a revocable trust, you have full access to your assets, and so do your creditors.. However, because you are not allowed to serve as trustee in an irrevocable trust, and the trust owns the assets (not you), an irrevocable trust will protect assets from debts, lawsuits, and Medicaid estate recovery while reducing personal estate taxes.
Protect Assets in an Irrevocable Trust
An irrevocable trust is not a single type of trust. Rather, many trusts are irrevocable, including:
- Testamentary Trust
- Medicaid Planning Trust
- Asset Protection Trust
- Special Needs Trust
- Charitable Trust
- Irrevocable Life Insurance Trust (ILIT)
Client needs vary between individuals and families. For example, people who work in industries where lawsuits are common—such as doctors, architects, engineers, professional athletes, etc.—should establish an asset protection trust to safeguard the properties they wish to retain if they must pay damages in a lawsuit.
You may also want to put your life insurance policy into an ILIT so that your estate doesn’t inherit the policy proceeds after your passing. A large life insurance policy payment could tip the value of your estate, so your beneficiaries might have to pay higher estate taxes.
Contact one of our knowledgeable trust attorneys today to schedule a consultation and learn more about which trust best fits your needs.
Estate Planning and Trusts
When you pass away with a Will, its executor can only distribute assets to your beneficiaries after the Will has passed through probate. During probate, the court assesses the value of your assets and uses them to pay your final expenses, bills, taxes, and other creditors.
Both irrevocable and revocable living trustsrusts avoid probate if they are properly drafted and fully funded. If you want to ensure that your beneficiaries receive their inheritances privately and quickly, let an experienced attorney help you create an irrevocable or revocable living trust and pour-over will to bypass the probate process.
Contact an Irrevocable Trust Lawyer in Central Virginia
The attorneys at Commonwealth Life & Legacy Counsel have years of experience in elder law, trust creation, trust administration, and probate. Secure your family legacy with an irrevocable trust by calling 434-589-2958, or in or near Powhatan at (804) 598-1348 or reaching out online to schedule a free consultation.