Revocable Trust

An irrevocable trust is a legal arrangement that cannot be changed or ended by the person who creates it (the “settlor” or “grantor”). The grantor transfers assets to a trustee who manages the trust, and the terms of the trust become legally binding. 

Irrevocable trusts are often used for estate planning and asset protection. Some benefits of irrevocable trusts include: 

• Tax benefits. Assets in an irrevocable trust are not included in the grantor's taxable estate, which can reduce the grantor's tax liability (and is particularly pertinent in Washinton where the individual estate tax threshold remains $2.193 Million). For example, if you are a Seattle resident who owns a modest home and has been working in the area for a couple of decades, chances are you may already be looking at Washington Estate Tax exposure for your estate.
• Asset protection. Assets in an irrevocable trust are protected from creditors and lawsuits. 
• Avoid probate. Irrevocable trusts can avoid probate proceedings. 
• Privacy. The terms and assets of an irrevocable trust are private and not available to the public. 

There are two types of irrevocable trusts:

• Living trusts, which are established while the grantor is still alive.
• Testamentary trusts, which are established after the grantor's death based on provisions defined in the testator’s complex will.

One final note: It's important to use the correct wording in the trust document to ensure that the irrevocable trust language is enforceable in the state where it's created. 

Schedule a free consultation today to discuss your personal estate planning needs.

RESOURCES

Please see the Washington State Bar Association website for more information on revocable trusts and irrevocable trusts.