In a previous blog post, we provided detailed information on revocable trusts and how they can be used to accomplish your estate planning goals. Another option available is an irrevocable trust. As you might have guessed, it’s basically the opposite of a revocable trust. Why might you consider using this type of trust instead? To answer that question, let’s take a closer look at irrevocable trusts for estate planning in Massachusetts.
What Is an Irrevocable Trust
In a nutshell, an irrevocable trust is one that you cannot personally change after it’s created. You essentially give up all ownership and rights to the assets. The assets belong to the trust itself. Only the designated beneficiary has the power to alter an irrevocable trust. Normally, you would not designate yourself as the beneficiary of this trust as it would negate some of the benefits of selecting this type of trust to begin with.
Benefits of Irrevocable Trusts for Estate Planning in Massachusetts
Given that you lose control over your trust, why might you opt for this type of trust as opposed to a revocable one? Here are several possible reasons:
- Avoiding Real Estate Taxes
- Optimizing Tax Benefits
- To Exclude Assets from Your Estate
Proceed with Caution
Irrevocable trusts are not as straightforward as revocable trusts. Therefore, you should only establish one with the professional guidance and services of an experienced Massachusetts estate planning attorney.
Your attorney will advise you on the proper way to establish the trust, specific language to include, and how to leverage the trust to accomplish your specific goals. Be sure to ask about any current and future tax implications to both you and your beneficiaries when it comes to irrevocable trusts for estate planning in Massachusetts as minimizing taxes should always be an estate planning goal.