Revocable V. Irrevocable Trusts
Think about putting your assets into a trust. When your assets are in a trust if something happens to you then your heirs can avoid going through probate.
1. Revocable trust can be cancelled
They become irrevocable once a person passes away.
2. Irrevocable can only be changed by a court order or the trust's beneficiaries
3. Irrevocable trust can protect an individual from creditors and/or estate taxes
4. Revocable trust does not protect a person from estate tax
5. Irrevocable trust requires an EIN - Employer Identification Number
If the trust receives income over $600 they must file a tax return.
6. In an irrevocable trust the Trustee, not you, retain control of the assets
But you could be setup to receive payments from the trust on a regular basis. The trustee and the beneficiary are different people.
7. 3 reasons you may need an irrevocable trust
1. Avoid estate tax
2. Shield you personally from legal liability
3. Put assets into a trust in order to qualify for Government benefits: Medicaid and Supplemental Social Security Income.
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