If you, like so many others across Ohio, have worked hard for years to build up your wealth and assets, you may be starting to think about how you might best preserve your wealth for your children or other loved ones. While you probably have numerous options at your disposal, one thing you may want to consider doing is creating an irrevocable living trust.
While, as its name implies, you cannot alter an irrevocable living trust once you create it, there are many benefits that come with establishing this type of fiduciary arrangement. It can also help you leave more of your wealth behind for your loved ones after your passing than you may be able to through a traditional will. More specifically, creating an irrevocable living trust typically allows you to:
Reduce estate taxes
Once you pass away, your loved ones must typically pay taxes on your estate, and this can eat up a good bit of the money you were hoping to leave behind. The assets you place in an irrevocable living trust, however, do not factor in when assessing the overall value of your estate, which can lead to considerable savings for your children or other loved ones.
Protect yourself from creditors
Once you place assets in this type of trust, they are no longer “yours” in the eyes of the law, which means creditors and anyone who files a judgment against you generally cannot touch them. Please note, however, that this perk is specific to irrevocable living trusts, meaning it does not apply with revocable ones.
Distribute assets on a conditional basis
An irrevocable living trust also gives you a certain level of control when it comes to distributing assets to your heirs. You can, for example, arrange it so your children do not receive assets until they turn 30, stop abusing substances, complete college or what-have-you.
While these are some of the main advantages of establishing an irrevocable living trust, this is not an exhaustive list of all related benefits.