The most common type of irrevocable trust is the Irrevocable Life Insurance Trust (ILIT). This trust holds life insurance on the grantor’s life and prevents the insurance from being taxed in the grantor’s estate at their death.
While irrevocable trusts have many advantages, they cannot be changed or revoked by the grantor. However, a special co-trustee or trust protector can be appointed to make limited changes to the trust document. For example, if the trust was set up for two children, it may make sense to modify their interests based on changing circumstances.
In some cases, starting over with a new trust may be beneficial, but this can be complicated. A qualified estate planning attorney can help explore options for changing the terms of the trust or shifting assets to a different trust.
Although irrevocable trusts may seem daunting, an estate planning attorney can assist in determining whether they align with overall goals and help navigate the legal complexities.
Compliments of the McGee Law Firm, Attorney Brandon McGee
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