Trustees of Irrevocable Trusts owe beneficiaries a fiduciary duty. If the beneficiaries believe that any action taken by the Trustee has harmed them, they are free to petition the court to review any and all actions seeking to surcharge the Trustee. Almost every Irrevocable Trust allows the Trustee to hire a lawyer to advise and represent the Trustee. Professional Trustees retain in-house attorneys for this purpose and then supplement these attorneys with outside Estate Litigation Lawyers.
Professional Trustees seek legal help because professional Trustees know this is a wise decision. Sound, legal advice from experienced Trust Lawyers helps avoid conflict and minimize the chances of litigation. Further, it helps reduce the chance that the Trustee will make a mistake causing personal liability. For more information go to our Estate Litigation page to learn more about:. While an Irrevocable Trust is never a legal requirement, they have many advantages.
Life insurance is a flexible, estate planning tool, and can be used in conjunction with many Irrevocable Trusts. For example, an excellent plan for avoiding conflict in a Second Marriage or Blended Family is purchasing life insurance to fund trusts so your spouse and children from prior relationships can part on good terms.
Further, life insurance in Irrevocable Trusts is often critical components in Business Succession Planning. Corporate Trustees have fee schedules available on request. For more information, see our section on Fiduciary Fees.
When you ask if the cost is expensive, you have to balance the need for a Corporate Trustee with the services provided. If a no family member is qualified, a Corporate Trustee is an excellent alternative. Further, an interested person can always challenge a fee and have the court review fees.
See Fee Disputes. In a Trust, a Protector is a person appointed to oversee the trustee. If you ultimately decide to create a trust there will be a number of decisions you need to make that pertain to the trust, such as what type of trust will best help you achieve your goals and who to appoint as the Trustee of your trust. You may even want to appoint yourself as the Trustee of your trust. The Vero Beach revocable trust attorneys at Kulas Law Group explain when acting as the Trustee of your own trust is a good idea.
A trust is a legal relationship where property is held by one party for the benefit of another party. The overall job of a Trustee is to protect and invest trust assets and to administer the trust terms found in the trust agreement. Trusts all fall into one of two categories — testamentary or living trusts. Living trusts can be further divided into revocable and irrevocable living trusts.
When you create a trust, you will be transferring assets owned by you into the trust. Skip to header Skip to main content Skip to footer. Home retirement estate planning. Timins, Esq. The Only Benefits of Irrevocable Trusts 1. The Many Negatives of Irrevocable Trusts If you are not wealthy, there is no good reason to fund an irrevocable trust with life insurance, create charitable remainder trusts, or gift substantial property to avoid estate taxes prior to your death.
Possibly the Biggest Negative of Irrevocable Trusts Never forget that you lose control of property transferred to an irrevocable trust. Has your youngest child ticked you off? Too bad, he is permanently a Beneficiary.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. About the Author. Most Popular. Tax Breaks. February 25, Income investors are often all about dividends, but that may not be a smart strategy for retirees. November 8, Financial Planning. Being trustee of your own trust can undo what the purpose of the irrevocable trust should be doing; this is, protecting your assets.
We understand the confusion. While you, as the grantor, may technically be allowed to serve as the trustee of your UltraTrust irrevocable trust, you may end up in a precarious situation. If you have any discretion, as the trustee, with trust asset distributions, these assets may be included in your estate for tax, Medicaid, bankruptcy, debt collection and other purposes.
If any of those discretions are types that cause the court or government agency to claim that you have discretion to distribute assets in such a way that would benefit you, at the very least you will have to pay a lawyer a lot of money to defend you.
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