You have likely heard of a revocable living trust, which has become a widely used estate planning tool. As the name implies, a revocable trust can be revoked or terminated at any time. Irrevocable trusts, on the other hand, typically cannot be revoked. The person creating the trust surrenders control over its assets. While this may seem like a significant disadvantage, irrevocable trusts can be an effective means of protecting valuable assets and furthering effective federal estate and gift tax planning. If you are looking for ways to preserve valuable assets for your family, a Palm Beach County irrevocable trusts lawyer can help you decide whether an irrevocable trust is right for you. Contact the trust attorneys at Comiter Singer today to get started.
When Should You Consider an Irrevocable Trust?
Assets held in trust are held for the benefit of the trust’s beneficiaries. This means transferring ownership to the trust itself. For example, to put your home in a trust, the property title would have to be in the name of the trust. As a result, an irrevocable trust can be a useful tool in the following situations:
- Potentially protecting assets from judgments or creditors
- Avoiding probate
- Reducing your tax liability and taking advantage of estate tax exemptions
- Reducing the tax liability of your heirs and beneficiaries
- Gifting specific assets but retaining the income they generate during your lifetime
Irrevocable trusts are complex and require careful consideration. A Palm Beach County irrevocable trust attorney can help you decide whether an irrevocable trust will serve your estate planning goals.
Modifying an Irrevocable Trust
Although you cannot revoke or terminate an irrevocable trust, it is possible to modify it in certain circumstances. The following situations may prompt you to consider taking steps to change your trust:
- Changes in state or federal laws pertaining to inheritances
- The birth or death of family members
- The beneficiaries’ needs have changed
- Your financial needs have changed
Many circumstances may warrant modifying an irrevocable trust. If you executed an irrevocable trust or are the trustee, or beneficiary of an irrevocable trust, an irrevocable trust lawyer in Palm Beach County can help explain under what circumstances the irrevocable trust may be modified.
How to Modify an Irrevocable Trust
Unfortunately, modifying an irrevocable trust is not as simple as drafting an amendment to the trust agreement. Under Florida law, there are four methods of modification:
- Decanting: Decanting the trust involves creating a new trust that takes over the assets of the prior trust.
- Reformation: This is a judicial action that allows irrevocable trusts to be modified to correct errors.
- Nonjudicial settlement agreement: You can modify your irrevocable trust by agreeing with all interested parties concerning the modifications you want to make. Alternatively, you may modify the trust without the other parties’ consent, provided you surrender certain privileges to the beneficiaries.
- Judicial modification: The trustee or a beneficiary can petition the court to modify or even terminate the trust if the purposes of the trust have been met or it is no longer possible to meet the terms of the trust.
Modifying an irrevocable trust is a complicated process, and you could face tax penalties and other issues if you do not do it correctly. If you are considering changing your trust, a Palm Beach County irrevocable trust attorney can help you navigate the process.
Contact a Palm Beach County Irrevocable Trust Attorney for Assistance in Protecting Your Assets
Irrevocable trusts are complex estate planning tools that offer significant advantages to those who wish to protect their estate’s value. To discuss whether you should create an irrevocable trust, call Comiter Singer at 800-226-1484 or contact us online to schedule an appointment with a Palm Beach County irrevocable trust lawyer today.
