As part of your estate planning strategy, you and your probate attorney may decide that a trust is the best way to achieve the goals that you desire. Trusts allow you to do more than simply direct how your property will be distributed at the time of your death. An Oklahoma irrevocable trust can work to provide income to the beneficiaries during and after your lifetime. This is an excellent way to provide for your loved ones while also protecting your assets during your lifetime and after your death.
An experienced Oklahoma irrevocable trust attorney can answer the question “What is an irrevocable trust?” He will explain the various types of trusts that are available in Oklahoma as well as the advantages and disadvantages associated with each type of trust. Below is a brief discussion of the difference between a revocable trust and an irrevocable trust, as well as why some people choose an irrevocable trust over a revocable trust.
What Are The Differences Between Irrevocable and Revocable Trusts?
The difference between a revocable trust and an irrevocable trust is very simple — one can be undone by the grantor while the other one cannot. With a revocable trust, the grantor can reverse the trust at any time. The grantor remains in control of the assets that are placed in the trust and the grantor can remove those assets from the trust at any time. Most revocable trusts automatically convert into an irrevocable trust upon the death of the grantor.
An Oklahoma irrevocable trust removes the power from the grantor. The grantor forfeits any rights to the assets placed in the trust (the assets are transferred to the trust so that the grantor no longer owns the assets), as well as any rights to manage the assets of the trust. A trustee is named to manage the assets that are held by the trust. The trustee can sell or invest the assets without permission from the grantor.
What Are The Benefits Of An Oklahoma Irrevocable Trust?
You may be wondering why anyone would want to choose an Oklahoma irrevocable trust when they lose the ability to manage the assets within the trust; however, there are benefits of choosing an irrevocable trust.
- No estate taxes – When you place assets in an irrevocable trust, they are no longer part of your estate. Therefore, these assets cannot be taxed as part of your estate. This can be a very important element of estate planning to reduce the potential tax liability that could reduce the value of your estate for your beneficiaries.
- Protection from creditors – Because you no longer own the assets in an irrevocable trust, your creditors cannot attack those assets in an attempt to liquidate the assets to pay debts that you may personally owe.
- Tax on earned income is paid by the trust – When the trust earns income, the trust is responsible for the payment of the taxes on that income rather than the beneficiaries. Beneficiaries only pay taxes on distributions of income directly to the beneficiaries.
- Impact long-term health care benefits – Irrevocable trusts may be used to reduce your net worth so that you can qualify for long-term health care benefits.
- Provide for minors or other family members – If you have a family member with special needs, an irrevocable trust is a good way to provide for the needs of that person through regular income. Because the trust holds the assets, you do not need to worry about creditors or other parties seizing those assets in the future for your debts, thereby taking away the income from your family member.
Before deciding between an Oklahoma irrevocable trust and a revocable trust, you should discuss your estate planning needs with a qualified probate and estate attorney to ensure that you choose the option that is best for your situation and meets each of your needs. Estate planning is an important part of your overall financial plans and is something that everyone should consider a top priority.
Contact an Experienced Estate Planning Attorney in Tulsa
When you need the services of an experienced trust attorney, call Oklahoma Will & Trust. Tulsa Irrevocable Trust Attorney Earl D. Lawson has the experience and knowledge to assist you with all of your estate planning and probate needs. As a skilled Tulsa estate planning attorney, Earl D. Lawson knows the advantages of protecting your estate and ensuring that your wishes are followed.
Contact an experienced Tulsa Irrevocable Trust Attorney today for a free consultation about the best approach to protecting your legacy. Call (918) 876-4500 to schedule your free consultation. We are conveniently located at 201 W. Fifth Street, Suite 404 in Tulsa, OK.