When working through your estate planning, you’ll inevitably be faced with the decision of establishing either a revocable or an irrevocable trust. Though they are similar in benefit to one another, a revocable trust allows you to make changes once the trust is established, while an irrevocable trust cannot be altered.

So why would anyone want to establish a trust that can’t be changed? Believe it or not, irrevocable trusts have benefits that can outweigh the permanent nature of the trust, and they are frequently utilized in order to receive benefits for some of the following items:

Irrevocable trust owners reap huge tax benefits, both on a personal level as well as on their estate taxes. Assets placed in an irrevocable trust are not subject to estate taxes, which can lead to protection from the probate process. This means your beneficiaries will get closer to the amount that you intended to give to them in the first place because fees and costs have not eaten away at it. In addition, estates with higher values are taxed at a higher rate, so placing assets in your irrevocable trust decreases the overall estate value, thus saving taxable money in the long run.

On a personal level, placing assets in an irrevocable trust separates them from your reported income, which could place you in a lower tax bracket.

Because qualifying for Medicare is based on income, placing assets and funds into an irrevocable trust disqualifies them from being included in any assets used to establish qualification. Many find that this is a helpful way to qualify for Medicare help when it is most needed.

You can name your trust as the beneficiary of your life insurance plan. By doing this your life insurance is paid to the trust and is not included in your assets when you pass away, thus reducing the amount of your estate, and any applicable estate taxes.

You can pay yourself from your trust! With a little clever wording you can set up your trust so that your assets are “property” of the trust, but that your trust can also pay you on any income it generates.

As with all estate planning preparation, it is in your and your heirs’ best interests to you consult with an attorney experienced in Florida estate planning and trusts. At Rodriguez Law, P.L., our dependable team can assist you in creating or making changes to any estate planning documents. We can also offer guidance and advice unique to your individual circumstances, and prepare the perfect plan for your needs. Contact us here or give us a call at (305) 262-8226. We’re here to help you!