Living Trust Articles >> What is an Irrevocable Living Trust?

What is an Irrevocable Living Trust?

An irrevocable living trust is a trust established while you are still alive that can not be changed once it is signed. Irrevocable living trusts have substantial advantages for those with large estates, but have obvious limitations as they can not be altered or revoked after being created.

Irrevocable Living Trusts

A trust is a legal arrangement and document that places assets or property under the control of a trustee. In a living trust, the trust is made and often managed by you while you are still living. Once you die, however, the trust becomes irrevocable or unchangeable. This differs from a living irrevocable trust, however, as the irrevocable living trust is created before your death not after.

Advantages of Irrevocable Living Trusts

A living irrevocable trust has two distinct advantages in addition to the advantages of all living trusts. The income under the trust may not be taxable to the trustor and the assets in the trust may not be subject to estate or death taxes as part of your estate. To qualify for those benefits, however, you can not receive income from the trust and you can not use the trust assets. Additionally you must maintain the trust according to the codes set forth by the Internal Revenue Service.

The tax savings under irrevocable living trusts is considerable for those with large estates. If your estate is over $2,000,000 at your death in 2008, the government is entitled to close to fifty percent of your assets reducing the amount your beneficiaries stand to inherit by half. Instead of leaving an estate that large in a will where it will go through probate and be eaten up with taxes and fees, placing assets into an irrevocable living trust creates tax advantages for both your estate and your beneficiaries following your death.

Create an Irrevocable Living Trust

To create an irrevocable living trust, you can consult with a lawyer and have the paperwork prepared or purchase software to create the documents yourself. Irrevocable living trust software is often affordable and guides you through a series of fill-in-the-blank questions to complete the necessary documents. When the form is complete, you can save it and print it out.

Downloading irrevocable living trust forms from Create My Living Trust gives you the same or even more current forms that are required by your state to create irrevocable living trusts. In addition to the forms which you can modify, save and print from your computer, your download also includes information books that explain what sections of the forms you’re filling it and why. Download the living trust packet for your state and get started with serious tax savings today.