If you live in North Carolina and are beginning the process of estate planning and getting your plans for the future in order, you may be giving some thought to how you might best preserve your wealth for future generations. While there are a variety of methods you can use to plan ahead, one method you might consider utilizing to help you protect your hard-earned assets involves establishing what is known as an irrevocable living trust.
An irrevocable living trust can be a great way to protect your assets and help preserve more of them for your beneficiaries. While you cannot change or draw from the trust once you create it (although you may be able to do so through a revocable living trust), there are numerous things you can accomplish by creating one. For example, you can use an irrevocable living trust to:
Safeguard your assets from creditors
Once you place assets in an irrevocable living trust, they no longer belong to you. Instead, they become the direct property of the trust itself, which can be a very good thing in the event that a creditor tries to come after you or someone files a claim against you because this person or entity will not be able to touch them. Please note, however, that a revocable living trust does not offer this same benefit.
Reduce estate taxes
In most situations, you can also use an irrevocable living trust to reduce the amount of taxes assessed on your estate. Generally, the assets you include in a trust do not factor in when assessing the total amount of your estate, meaning you can, in many cases, end up paying considerably less in estate taxes.
Maintain access to benefits
Placing assets in an irrevocable living trust can also help you gain or maintain access to government benefits. For example, you may be able to enjoy substantial savings with regard to Medicaid or Medicare if you have an irrevocable trust in place.
While these are some of the things you can do with an irrevocable trust, this is not a comprehensive list of all possible uses and benefits.