Many people are uncomfortable thinking about their passing and put off estate planning, but preparing for this event allows one to ensure that assets are distributed appropriately. Estate planning can also provide benefits while you are alive as irrevocable trusts can help one safeguard assets.
Trusts allow an individual or couple to pass assets to beneficiaries without going through the probate process. Trusts are also private while wills are not. If you have a revocable trust, you can make changes to the trust while still alive. Irrevocable trusts are permanent once they are finalized, which offers asset protection.
One type of irrevocable trust is a qualified personal residence trust. When putting a home into this trust, the home belongs to the QPRT. This protects the home as it does not belong to you, which means others cannot take the home if bankruptcy occurs. It is also protected if someone files a civil suit against you. Other irrevocable trusts allow you to safeguard other assets.
Revocable trusts do not offer asset protection, but many people still use them as part of estate planning for other reasons as they offer more freedom than irrevocable trusts. You must consider your decision carefully when using irrevocable trusts since you cannot edit them even if you have a falling out with a beneficiary.
This means of asset protection secures your assets for your heirs, which is why it is useful for estate planning purposes. Irrevocable trusts are also useful for having more control over what happens to your assets and tax benefits. To learn more about asset protection, contact us today.