"Irrevocable Trusts are important tools in both estate tax planning and asset protection planning. For Example, an irrevocable trust for the benefit of the children can own an insurance policy so that the proceeds are not included in the parents' taxable estates. That same trust can also be a member of an LLC with the parents so that the parents have the benefit of the charging order limit available to members of a multi-member LLC.
Irrevocable trusts of this types are commonly established when the parents create "basic" estate planning documents, e.g, a "pourover will"; "living" (also known as "family" or "revocable") trust; "blanket" assignment of assets; trust certificate; and durable powers of attorney for health care and asset management. And that type of planning - hopefully - takes place when the children are young.
Unfortunately, 20 years later, things have changed. The son has married a woman whom mom and dad do not approve. The daughter is married to a nice man who cannot earn a decent living. Both parents are uncomfortable with the irrevocable trust, which provides that the assets are distributed outright to their children on their deaths. What can be done? "
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Tax Law Updates, Wills, Trusts, & Estate Planning Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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