“Revoke” means to “call back.” Unlike a revocable trust, you cannot “call back” an irrevocable trust, with rare exceptions.
Irrevocable and charitable trusts also fall into the category of “inter vivos” (during life) trusts. Rather than being created upon the death of a person, the person creates them during life.
Once you place assets into an irrevocable trust, they are no longer yours and you need not pay estate taxes on them. If there has been capital gain on them, they may not be subject to a capital gains tax.
Probate can also be avoided with an irrevocable trust. Upon death your will must be probated and your estate distributed according to your wishes. A trust is not part of your estate and does not require court supervision. You and your beneficiaries gain privacy with a trust.
Charitable trusts are irrevocable. After all, it would be awkward for the law to allow giving to a charity and then taking it back!
You can arrange for the charity to receive income for a certain number of years, and later the remaining income. Alternately, other beneficiaries might receive the income, and a charity receive the remainder at the termination of the trust. A charitable trust can spare your heirs in estate taxes, and save you income taxes and capital gains taxes.
Unlike the revocable trust, the irrevocable trust is not subject to estate tax on one’s death.
An irrevocable life insurance trust owns a life insurance policy on the creator’s life. The proceeds are not part of your estate for tax purposes, and they can be used to pay estate tax due.
A personal residence trust allows you to remove a home from your estate, but live there rent free. Any increase in value until the time of your death is excluded from estate taxation.
When you work with Charles D. Stark, Attorney and Counselor at Law, you deal one-to-one with an attorney with more than 35 years of experience.
By completing these two document before your consultation, it will give me a better idea of what your estate planning needs are and will help me tailor your estate plan to suit your needs.
If you are considering establishing a financial estate preservation plan, or if you are an administrator seeking help with Sonoma County probate, contact me online or by phone at 707-527-9900 to schedule a meeting. Successful outcomes start with the right choices about your future. My rates are reasonable, either hourly or by flat-fee, and I accept Visa, Master Card, Discover, and American Express.