Creating an Irrevocable Trust

Those looking to avoid liability for estate taxes or who want to ensure that a trust’s property and assets are protected should consider creating an irrevocable trust. These types of trusts cannot be changed without the permission of the beneficiaries. This is true even if the grantor himself wishes to change the terms of the trust. Although irrevocable trusts can provide a number of benefits, whether they are appropriate for a person’s estate will depend on the specific facts of each case, so if you are considering creating a trust, it is important to contact an estate planning attorney who can help you decide on the best course of action.

Establishing a Trust Agreement

To create an irrevocable trust, the grantor, or the person creating the trust, must put down in writing the following information:

  • The identity of the trustee, or the person who will administer and operate the trust;
  • The identity of the beneficiary who will receive the property held in the trust; and
  • Details on how the property will be managed and distributed.

By taking these steps, a grantor can ensure that his or her assets:

  • Will be shielded from the probate process, which can be time-consuming and expensive;
  • Will be managed by an outside individual or financial institution in the event that the grantor becomes incapacitated; and
  • Will not be subject to a gift tax on any appreciation of the assets held in the trust once they are transferred to a beneficiary.

If an estate exceeds the limit imposed by the government in the year of the decedent’s death, it can be taxed significantly. However, by creating an irrevocable trust, the estate’s assets will be shielded from these taxes.

Modifying an Irrevocable Trust

Generally, irrevocable trusts cannot be changed, even by those who create them. However, it is possible in some cases for trustees and beneficiaries to petition a court to modify or terminate an irrevocable trust. In fact, trustees can modify an irrevocable trust without petitioning a court by entering into a legally binding settlement agreement. It can still be difficult, if not impossible, to alter an irrevocable trust, so if you wish to have the terms of a trust changed or clarified or want to remove a trustee, you should speak with an experienced attorney who can explain the legal process required to make these types of changes.

Call Today to Speak With an Illinois Estate Planning Lawyer

If you are interested in creating a trust or have another estate planning-related question, please contact one of the experienced Glencoe estate planning attorneys at Orlowsky & Wilson, Ltd. Attorneys at Law by calling 847-325-5559 today. You can also reach us by initiating a live chat with a skilled and knowledgeable member of our legal team or by sending us a brief online message containing your contact information and a brief description of your case. We have offices in Chicago, Lincolnshire, and Northfield and are eager to address your estate planning questions and concerns.

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