When is an irrevocable trust a sound estate planning strategy in San Diego and Southern California? Estate taxes may be at an all-time relative low, but estate planning is still an important ingredient for all Californians – especially if you own a home.
Trust planning allows your assets to pass directly to beneficiaries quickly and with minimum expense. The IRS annual gift tax exclusion is $15,000 per year per person at this moment in time. It is absolutely possible to pass $15,000 to each beneficiary each year tax free, but what if your children or grandchildren don’t have the same wisdom, life experience or money management skills that you possess? What makes an irrevocable trust a sound estate planning strategy is that it provides the ability to set aside money for children, grandchildren and other beneficiaries, gain immediate tax advantages and provide for the future while expanding the overall amount of wealth that is passed from one generation to the next tax-free.
Creating a trust moves an asset from one’s “person” to another owner – in this case the irrevocable trust. The difference between a revocable trust and an irrevocable trust is the asset(s) cannot be removed from an irrevocable trust without the consent of the trustee and all beneficiaries. In a revocable trust, assets can be moved in and out of the trust at will by the grantor (the person who establishes the trust).
Irrevocable trusts may provide additional tax benefits to the grantor to assist with many situations such as:
- Providing for the lifetime needs of a disabled or special needs child
- Preparing for retirement or long-term medical care (spend down strategies)
- Protecting beneficiaries from losing inheritance or assets in a contested or acrimonious divorce
- Ensuring college tuition for children and/or grandchildren
- Providing for a beloved pet
The experienced tax and estate planning attorneys at Allen Barron are skilled and seasoned professionals, and can provide comprehensive insight on tax related issues as well as the protection and distribution of your assets. What makes an irrevocable trust a sound estate planning strategy in San Diego and Central Ohio? Placing assets into an irrevocable trust is one portion of a well conceived and executed estate plan. Protect your wealth and pass it on according to your intentions. We invite you to contact Allen Barron to learn more about estate planning or call today to schedule a free and substantial consultation at 866-631-3470.
