Irrevocable Trust
- Thread starter djw3580
- Start date
Gill
Recycles dryer sheets
There are many types of irrevocable trusts and many reasons for creating them. What did you have in mind?
Gill
Gill
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
We have an irrevocable trust set up for my parents. No regrets (yet).
Basically though you would relinquish all decision making to the trustee(s). This requires lots of umm trust.
Additionally, the trust tax rates reach the highest rates at around 12-13k of income, so income is typically transferred out to other accounts to lessen the burden of taxes.
Please note this is a highly contested subject on this forum and a few threads surrounding this subject have been closed down.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I am not stating at all to delete your post. Don't worry.
Sometimes the discussion surrounding this subject in the past has pitted those who feel it is unethical to set up this type of trust for these reasons vs. folks on the other side.
my lawyer chose not to do that trust (I won't explain why).
my (lack of) understanding is that your assets in the trust in such a way that they are not yours anymore and I assume you are not the beneficiary. I think it is trust that the beneficiaries will gift it back.
Note that you are then likely opting for medicaid LTC where the system can move to a different LTC place as they choose.
I'm just SGOTI and dont have this type of trust.
my (lack of) understanding is that your assets in the trust in such a way that they are not yours anymore and I assume you are not the beneficiary. I think it is trust that the beneficiaries will gift it back.
Note that you are then likely opting for medicaid LTC where the system can move to a different LTC place as they choose.
I'm just SGOTI and dont have this type of trust.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
No need to delete. Just keep in mind that there are some of us who object to people finagling their finances to put their nursing home cost on us taxpayers so their money can go to their kids... its just that simple.
marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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But in most family cases, the trustee could be a close family member who you could (quietly) "advise" on how to manage the assets. IOW, the trustee would be more of a technicality than an actual blind trust where you'd have no control.
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
But there are other reasons to use an irrevocable trust, aren't there?
If you are in the Estate tax range, I think an irrevocable trust removes those funds from the Estate, but I think you can still take the income, or tap it for medical needs.
Or maybe to provide a trust for a child (or other chosen heir) with special needs? I think an irrevocable trust could provide added protections. And I stress "I think". Being irrevocable, you certainly want to check these things out extremely carefully and get good professional help.
-ERD50
I'm dealing with this now with Dad and his dementia.
His (revocable) trust was setup with a relinquish control clause of "when a Dr says I'm no longer capable"... but Drs here refuse to participate. Their response to his falling for scams is "he's still making decisions, they're just bad decisions".
Bottom line: If you're not going to trust your trustees, you need to chose a new trustee.
Ronstar
Moderator Emeritus
Just went through the trust type decision with MIL. Chose revocable for a number of reasons. I don’t trust the care given to Medicaid patients in nursing homes. And in MIL’s case, there would be a huge difference in basis for $ left to trustees. IIRC, In revocable, there is step up basis to time of death. In irrevocable, the basis is basis at the time the trust is set up. The tax difference more than offset the financial gain of hiding assets in an irrevocable trust. And I didn’t want to “hide” her assets anyway.
