Estate planning is important for virtually every person in California who has reached adulthood. This particularly is true if a person has started a family or has recently gotten married. When it comes to estate planning, with an eye ultimately to estate administration, there are a variety of factors that come into play. These include whether or not a person should consider creating an irrevocable trust. As is often the case, there are pros and cons to doing so.
Pros of creating an irrevocable trust
There are some crucial benefits associated with creating an irrevocable trust as part of your estate planning and estate administration efforts. First and foremost, for many people, an irrevocable trust permits the passing of assets to designated beneficiaries upon death without estate tax consequences. This is important for people who have high-dollar estates.
Another advantage of an irrevocable trust is that the formal probate process is bypassed. Time and money associated with estate administration need not be spent upon your death.
Cons of establishing an irrevocable trust
The most significant negative element of creating an irrevocable trust is that you lose control over any assets that are placed in such a trust. Decisions regarding the assets in an irrevocable trust are within the province of the trustee that you have named. For most people, an irrevocable trust simply is not needed to avoid tax consequences associated with an estate. Most estates simply do not reach the dollar threshold at which federal and state estate taxes are imposed.
Estate planning and estate administration represent complicated areas of the law. You best protect your legal interests, and those of your family or other heirs, by seeking professional guidance from an experienced attorney.