Funding trusts can be a worthwhile endeavor, while estate planning. Residents of Kennett Square, Pennsylvania, should consider the value of setting up a trust in order to preempt family conflicts arising from the distribution of their estate. An irrevocable trust is one kind of trust that can serve many benefits, including the protection of properties from the heirs' mismanagement, estate taxes and liens by creditors against the decedent and heirs.
Once the irrevocable trust is signed, the testator, the person that created the trust, can no longer revoke it. However, that does not mean that the testator has no control over the trust. With the help of estate planners, the testator may design a flexible, irrevocable trust. This can be done on the very first step -- drafting the trust agreement. The testator may build the parameters on the agreement to build the flexibility of the trust. An expert suggests that the trust is like a triangle where each point represents the elements of the trust document. These are the trustee, the beneficiaries and the assets.
The creator of the trust has the ability to assign the power of the trustee. This, therefore, limits or upholds the power of the trustee to manage the assets that are included in the trust. It determines if the trustee can sell the assets or when they can be distributed in a lump sum or gradually. At the same time, writing the document limits the possibility that the heirs will contest the trustee's managing power and at what age or time they will receive the assets.
Simply put, irrevocable trusts are simply irrevocable. It is important that the creator of the trust consult estate planners if they have trouble making sound decisions. Trusts are only one of the options that will help a testator to resolve the estate's distribution. To ensure the efficiency of the trust, the testator must choose the trust that specifically adheres to his or her goals and provides the maximum allowed flexibility to have control over the trust.
Source: FOX Business, "An irrevocable trust that evolves with you," Judy Martel, June 17, 2013.