Many people in Illinois may be thinking about how to handle their assets in the future. People want to ensure that their loved ones are provided for while also avoiding excessive estate taxes and fees. Trusts may be a good option to include as part of the estate planning process, because they provide greater privacy, flexibility and control. There are several different types of trusts that people may make use of as part of their estate plan, including irrevocable trusts.
In general, irrevocable trusts cannot be changed after they are completed, at least without the approval of the trust’s beneficiaries. Once funded, the assets of the trust’s grantor are fully transferred to the trust, changing their ownership permanently. Irrevocable trusts may be handled differently than revocable ones in a number of ways. They will not be subject to estate taxes with the rest of the estate, because assets held by an irrevocable trust have been removed from the grantor’s possession. They are also often shielded from creditors and lawsuits, which can enable people to protect key assets for their children or other beneficiaries.
Some types of irrevocable trusts can also help people to plan for Medicaid eligibility. People may be able to partially transfer assets to irrevocable trusts for their heirs to avoid spending them on insurmountable care bills. On the other hand, a special needs trust is a special vehicle created to allow parents and others to support the needs of a person with disabilities without endangering their eligibility for important forms of public assistance like Social Security and Medicaid.
There are a number of reasons why people may consider both irrevocable and revocable trusts as part of their planning process. An estate planning attorney may provide guidance and draft key documents that help people to implement their plans for the future.