Common Misconceptions: Will I Lose Control If I Set Up An Irrevocable Trust?
This edition of the Koldin Report E-Newsletter continues a series on common misconceptions about Elder Law, Estate Planning and Medicaid.
In this newsletter we discuss misconceptions about losing control with an Irrevocable Trust. All prior newsletters are saved on our website. You can read them by clicking here.
Incorrect:I lose control if I set up an Irrevocable Trust.
Correct: The purpose of an Irrevocable Trust is to protect your assets while giving you as much control as possible.
As discussed in the previous newsletter, if you had direct control over your Trust to revoke it or to withdraw principal, then this would be considered a Revocable Trust and would not protect your life savings.
However, depending how your Irrevocable Trust is written, you can still retain important control to have your wishes met.
Irrevocable Trusts prepared by the Koldin Law Center, P.C. for our clients provide you with the following important control:
- (1) You select who you want to be your Trustee(s). You would typically select those you fully trust would comply with your wishes, such as your children.
- (2) You can appoint more than one person to serve as your Trustee.
- (3) You can designate whether your Trustees must act jointly or whether any Trustee can act alone.
- (4) You designate the beneficiaries who will inherit from your Trust at the time of your death and avoid probate.
- (5) You can change your beneficiaries at any time.
The most important control that you have is that you can change your beneficiaries at any time. If your Trustee(s) are also your beneficiaries, then they have a strong incentive to comply with your wishes or they face the risk of being removed as a beneficiary.
Although you cannot revoke an Irrevocable Trust by yourself, New York law specifically allows an Irrevocable Trust to be revoked or modified by all interested parties.
New York law defines interested parties as the Grantor(s) of the Trust and the Beneficiaries of the Trust. For most of our clients, the interested parties to an Irrevocable Trust are the parents who create the Trust and the children who are the beneficiaries of the Trust. Depending how the Trust is written, this means that the parents and children together can revoke an Irrevocable Trust.
For more information about Irrevocable Trusts, please see our website by clicking here.
At the Koldin Law Center, P.C., located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options, including the advantages and disadvantages of Revocable Trusts and Irrevocable Trusts, along with other estate planning considerations including a Will, Power of Attorney, and Health Care Proxy. We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
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