Searching for an attorney for irrevocable trusts in Arizona?
Trusts come in two forms: revocable and irrevocable. To revoke something means to void or annul by recalling, withdrawing or reversing; therefore, an irrevocable trust is one that cannot be changed. When the trust-maker (the grantor) creates an irrevocable trust, he or she is effectively removing all of their rights of ownership to the assets contained in the trust. A revocable trust is the opposite of a “revocable trust,” which allows the grantor to change or modify the trust as they see fit.
Irrevocable trusts can serve different purposes, but the reasons why people choose this type of trust is for certain estate and tax considerations. The main feature of this type of trust is that it removes the trust assets from the grantor’s taxable estate. This means that the grantor is relieved of all tax liability on the income generated from the assets in the irrevocable trust. The assets held in this type of trust can include but are not limited to, a business, investment assets, cash and life insurance policies.
Keep in mind that an irrevocable trust cannot be terminated once it has been finalized, which sets it apart from a revocable trust which can be terminated. For estate planning purposes, there are dozens of different types of irrevocable trusts; however, the two most common reasons why people make irrevocable trusts are to reduce taxes and to protect property. Some of the benefits of an irrevocable trust include the following:
- Reduce estate taxes when the second spouse dies
- Postpone payment of estate taxes until second spouse dies
- Reduce income and estate taxes through making charitable gifts
- Skips generations in order to reduce estate taxes for wealthy families
- Reduce estate taxes by removing life insurance proceeds from a taxable estate
- Spendthrift trusts allow you to control gifts to adult beneficiaries who don’t manage money well
- Special needs trusts allow you to provide financial support for disabled family members without affecting their qualifications for government benefits
Contact a Arizona Estate Planning Attorney Today
It’s important to discuss the full benefits and consequences of both revocable and irrevocable trusts with a qualified Arizona estate planning lawyer from Ferris, Thomson & Zweig. With our many years of estate planning experience, we can help you ensure that you implement the appropriate estate planning tools which will allow you to get the most out of your hard-earned assets. Contact us today to find out how intelligent planning today can reduce the tax consequences upon your estate.