Revocable vs. Irrevocable Trusts

A trust is a legal agreement whereby the creator of the trust, know as the settlor, trustor or grantor, transfers assets to the trustee. The trustee holds legal title to the assets for the benefit of the beneficiaries. Revocable trusts are an important part of the foundational planning that all families should put in place, regardless of whether the family assets that could be subject to estate tax. However, when looking to reduce potential estate tax exposure, revocable trusts will not be one of the tools that we use. The main reason for this is that, from the IRS’s perspective, you still own the assets that you have transferred to your revocable trust. If the goal is to transfer assets out of your estate so that you are not deemed to own them at the time of your death, this goal cannot be accomplished using a revocable trust. Only an irrevocable trust will work. While revocable trusts can be changed any number of times during the trust creator’s lifetime, this is not the case with irrevocable trusts. As the name suggests, irrevocable trusts generally cannot be amended after they have been created. Establishing an irrevocable trust is therefore a more complex process that involves considerations beyond those applicable to revocable trusts. Irrevocable trusts also often involve the trust creator giving up a certain amount of control over the assets transferred to the trust. Estate Tax Planning In San Diego Our law firm offers several estate planning services to San Diego residents, including estate tax planning. Estate planning exists to provide you with peace of mind, not just around who will inherit your property, but also to minimize any potential tax exposure. Our estate planning process has three steps: Initial Session: First, we will schedule a Family Estate Planning Session. Our attorneys will sit down with you and work with you to design a plan that is right for your family. Signatures: Then, a month later, you’ll return to our office to sign the required documents, making your plan official. Documents Issued: Once we process that paperwork, we’ll provide you with a binder of everything you need, detailing your estate plan and creating peace of mind for you and your family. We will also guide you through the process of how to transfer assets into your trust, or trusts. Get In Touch If you have possible estate tax exposure, or you may do in the future due to an inheritance, for example, contact Weiner Law and discuss how best to reduce that exposure. Estate taxes can severely deplete the resources that you leave behind for your family. The sooner you start the planning process, the more options will be available to minimize the exposure. Weiner Law 12707 High Bluff Drive Ste. 125 San Diego, CA 92130 (858) 333-8844 https://weinerlegacylaw.com/