An irrevocable living trust is a legal arrangement that allows individuals to transfer ownership of their assets to a trustee while they are still alive. This type of trust has numerous benefits, including protection of assets from creditors and lawsuits, reduction of estate tax liability, and the provision of management and distribution of assets in the event of incapacitation.
However, an irrevocable living trust also has drawbacks. Once the trust is established, it cannot be revoked or amended, making it essential to carefully consider its terms and ensure it is properly funded and managed. This complexity often requires the assistance of an experienced estate planning attorney.
To create an irrevocable living trust, an individual should first identify the assets they wish to transfer to the trust, choose a trustee to manage the trust, and then transfer ownership of the assets into the trust. This may require changing the titles on property deeds or bank accounts, or re-registering securities in the name of the trust.
Overall, an irrevocable living trust can be an excellent way to protect assets and provide for loved ones, but it is important to understand the potential benefits and drawbacks before creating one.