Irrevocable trusts can reduce exposure to estate taxes, protect assets from creditors, and provide creditor protection for spouses and heirs. They also allow you to set conditions on distributions, protect special needs beneficiaries, and support guardianship or education funding, all while preserving privacy by avoiding probate.
Enhanced asset protection can shield family wealth from unexpected creditors and lawsuits, while preserving control through clearly defined provisions.
Choosing our team means working with estate planning professionals who listen, analyze your goals, and craft tailored trust provisions that fit Maryland law.
We provide guidance on monitoring, adjustments, and long-term management.
An irrevocable trust is a legal arrangement in which you transfer ownership of assets to a trustee to manage for beneficiaries. Once funded, you generally relinquish ownership rights, transferring control to the trustee and the trust itself, which can influence taxation and asset protection strategies. A revocable trust, by contrast, remains under your control and can be amended or dissolved. The choice between the two depends on goals such as tax planning, asset protection, and how actively you want to manage the trust during your lifetime.
A trustee can be an individual you trust or a professional fiduciary such as a bank. Family members can serve, but they must understand duties, fiduciary responsibilities, and potential conflicts of interest. If a family member serves, you may appoint a successor trustee to take over if the initial trustee cannot perform duties. This ensures continuity and reliable administration.
Generally funding includes real estate, bank accounts, investments, and business interests. Title changes and beneficiary designations may be used. Funding is essential to activate protections and ensure distributions occur as planned. Some assets, like retirement accounts with designated beneficiaries, may not be funded directly; those assets pass outside the trust and should be coordinated with your overall plan.
Funding can affect Medicaid and other programs; some irrevocable trusts are used for asset protection while preserving eligibility. Jurisdictional rules vary, so proactive planning is key. Working with a qualified attorney helps ensure your strategy complies with current laws and avoids unintended disqualifications or penalties.
Distributions are governed by the trust terms, often at the direction of the trustee based on needs or ages. The trustee exercises discretion within the framework you set. The grantor can outline conditions for distributions, including timing, amounts, and purposes, to ensure beneficiaries receive funds as intended while maintaining overall plan goals.
Yes, properly structured irrevocable trusts can remove assets from your taxable estate, potentially reducing estate taxes. This requires careful planning and attention to gifting strategies and trust provisions. Tax rules are complex and change over time, so planning with a qualified attorney is essential to maximize benefits while staying compliant.
In most cases, an irrevocable trust cannot be undone by the grantor after funding. Some exceptions may exist if the trust allows certain amendments or if there are specific legal provisions. Alternative options include revocable trusts or life insurance designations; continue planning with your attorney to select the best path for your goals.
The timeline depends on asset inventory, drafting, and funding; it may take several weeks to months. Coordinating with financial institutions and ensuring proper titles can influence speed. Early preparation and clear goals help streamline the process and reduce delays.
Costs include drafting, funding, and periodic administration, which vary by complexity and asset mix. Initial setup fees may be paired with ongoing trustee and accounting charges. Discuss budget and scope at intake to set expectations and avoid surprises.
Bring a list of assets, beneficiary information, and any existing estate documents such as wills. Notes about family dynamics, goals for protection, and questions you want answered will help tailor the plan. Having recent financial statements and asset valuations can facilitate faster planning.
