Irrevocable Versus Revocable Trusts: How the Team at the Brabazon Law Office LLC Can Help Clients Understand the Difference
Part of the process of estate planning often involves setting up a trust fund for one or more children. The goal is to ensure that the beneficiary has access to funds that will provide something of a financial cushion in the years to come. There are a number of different ways to structure a trust. By talking with the team at Brabazon Law Office LLC, it’s possible to determine if a revocable or irrevocable trust is the more practical solution.
Understanding the Essentials of a Revocable Trust
With a revocable trust, it’s possible to place different types of assets in the hands of a trust administrator. The administrator is responsible for managing those assets in a way that allows some amount of increase or growth in net worth to take place. In a good scenario, the careful selection of assets in conjunction with the responsible management of each one results in a steady flow of income that can be used to pay for college educations, provide a stipend to take care of basic living needs, and in general provide some amount of financial stability for a loved one.
One of the features of this type of trust is that the individual who established it has the ability to modify or even terminate the arrangement at any time. This means that if a parent sets up a trust for a child who later chooses to sever ties with the family, it’s possible to shut down the trust and transfer the assets into a trust for another person.
How Does an Irrevocable Trust Work?
The general function of an irrevocable trust works much in the same way, with one major difference. Once the trust is established, there are only two ways for it to be modified or terminated. One way is for the beneficiary to provide permission for the changes to take place. The other is for the beneficiary to pass away and for the spouse and children to waive any claims to those assets. Depending on the family dynamics, the odds of either of these scenarios coming to pass may be slim to none.
Think long and hard before settling on the structure of a trust fund. Click Here and arrange to meet with the team at Brabazon Law Office LLC today. With a little time and effort, making the right choice will not be difficult.