You can choose from a selection of several different trusts for your estate plan, all of which are advantageous in their own ways. One popular trust type our firm handles is the irrevocable living trust. Commonly referred to as an irrevocable “asset protection” trust, this trust type has you forfeit your legal ownership rights over certain assets to that of the trust. Though it may seem drastic, relinquishing this control may come with benefits, such as offering you and your beneficiaries certain protections. Follow along to find out how an irrevocable living trust can protect you and how a proficient Broward County trust lawyer at The Probate Lawyers can help you remain wary of its downsides.
In what ways can an irrevocable living trust protect me?
To reiterate, you may no longer hold ownership rights over the assets you place in an irrevocable living trust. This means that these assets cannot be counted toward the gross value of your estate and thereby your taxable estate. So, you may be protected from certain estate tax implications.
While Florida may not impose estate taxes, this may still be relevant if you worry about federal estate taxes on your estate worth more than $13.61 million, as of 2024. Aside from taxes, an irrevocable living trust may offer the following, additional protections:
- It may protect you from out-of-pocket medical costs and rather have you qualify for Medicaid benefits.
- It may protect you from debt-seeking creditors should you ever face bankruptcy proceedings.
- It may protect you from your former spouse should you ever face divorce proceedings.
- It may protect you from a plaintiff should you ever face civil court proceedings.
Overall, by protecting your assets from third parties, you may leave a greater financial legacy for your loved ones. In other words, you may allow your designated beneficiaries to receive greater inheritances when you, sadly, pass on.
What is the downside to this trust type?
Though there are many great advantages to establishing an irrevocable living trust, it may be weighed down by one significant downside: its cost. On average, it may cost you anywhere from $3,000 to $6,000 to set up this trust type. Perhaps this total cost may be more if your assets are particularly complex.
So, before you take the plunge, you must ensure you are at a financial standing where establishing an irrevocable living trust makes the most sense. Otherwise, you may consider reverting to the simple Last Will and Testament. This may cost you a few hundred dollars rather than a few thousand dollars to set up.
When in doubt, someone at The Probate Lawyers will look into your case. So please retain the legal services of a talented Broward County estate lawyer today.
