Summary
An irrevocable trust is an estate planning document that may help clients in achieving their estate planning objectives. The primary characteristic of an irrevocable trust is that the trust provisions cannot be changed.
• What is an irrevocable living trust?
• Why use an irrevocable trust?
• Types of irrevocable trusts
• How the Edward Jones Trust Company can help
Important: State Laws Vary
It is critical to note that state law varies on how irrevocable trusts are executed and interpreted. It is important that clients consult with their legal professional prior to executing any estate planning document.
What is an Irrevocable Living Trust?
An irrevocable trust is a trust that does not specifically provide the right to amend or revoke. However, it is important to note that certain powers to change certain things inside the trust can be delegated to others, while the trust is still considered irrevocable. For example, many irrevocable trusts allow beneficiaries to change trustees. Where this power exists, and a trust is currently managed by a local bank or trust company, if the client wished to change the trustee to the Edward Jones Trust Company, they may be able to do so.
Why Use an Irrevocable Trust?
Irrevocable trusts are often used to to minimize estate tax. It is important that your client seeks legal advice before executing an irrevocable trust as this type of agreement is usually permanent. When a grantor executes this type of trust, they may give up benefits, and often control, of the property.
Types of Irrevocable Trusts
Irrevocable trusts can fall within a myriad of trust types. The one thing that these trusts have in common is that the instructions and provisions in the trust are not amendable or revocable. Common types of irrevocable trusts include:
• charitable remainder trusts
• special needs trusts
• irrevocable life insurance trusts
• revocable, living trust (the trust becomes irrevocable at the grantor’s death)
• credit shelter trust
• testamentary trust