Choosing to create a trust can help your loved ones avoid probate, taxes, and keep your finances private after your death . A trust can help you control the inheritance you’re giving by distributing by your assets over time to your beneficiaries or when they reach a certain age .
When creating a trust, it’s important to note there are different types, such as an irrevocable trust.
What Is An Irrevocable Trust?
An irrevocable trust is a trust that can not be terminated once it has been created and goes into effect after the person who created it dies . This makes them different than revocable trusts, which can be terminated until the person who created the trust dies . You can also create a living irrevocable trust, which goes into effect before the creator dies, eliminating the creator’s ownership of any property or assets now in the trust . The main benefit of an irrevocable trust is tax benefits.
In Washington State, Can An Irrevocable Trust Be Changed?
There are some exceptions to changing an irrevocable trust, but it can be challenging depending on the terms of the trust when it was created. In some cases, changes can be made if all the beneficiaries of the trust are in agreement, the change is in the best interest of the beneficiaries, or another legal exception applies .
What Are The Types Of Irrevocable Trusts Available In Washington State?
Irrevocable trusts can be created in a variety of ways to protect your property and help bypass taxes for your beneficiaries . Some of the most common types of irrevocable trusts are:
- Bypass Trusts: This trust exists for spouses. When the first spouses passes away, the majority of the estate will go into the bypass trust. Then, the living spouse can use the trust property, but when the second spouse dies the property is not included in his or her estate .
- QTIP Trust: This helps a married couple delay paying taxes until the second spouse dies .
- Charitable Trusts: These types of trusts allow you to reduce income and taxes on your estate by leaving a large amount to a charitable organization .
- Generation-Skipping Trusts: These trusts leave the majority of an estate to the deceased’s grandchildren. In this scenario, the grandchild is a beneficiary of the trust, but never owns the property, which shields it from tax when the child eventually dies .
- Life Insurance Trusts: This helps shield the income from a life insurance policy from tax .
- Special Needs Trusts: This type of trust allows money to be used to help support someone with special needs without disqualifying them for government benefits .
In Washington State, Can I Create My Own Irrevocable Trust?
To create the best irrevocable trust, it’s a good idea to hire a seasoned attorney, as more irrevocable trusts require a lawyer to draft them. The team at Priest Family Law can help you understand how an irrevocable trust works and create a trust that is right for you and your specific situation. Simmons Hannibal, Betsy. “Why Make A Trust.” Lawyers.com. https://www.lawyers.com/legal-info/trusts-estates/trust-planning/what-is-the-purpose-of-a-trust.html  Simmons Hannibal, Betsy. “Irrevocable Living Trusts.” Nolo. https://www.nolo.com/legal-encyclopedia/irrevocable-living-trusts.html  Simmons Hannibal, Betsy. “Modifying Or Terminating A Trust.” Lawyers.com. https://www.lawyers.com/legal-info/trusts-estates/modifying-or-terminating-a-trust.html