7th May 2019
An irrevocable trust can help you distribute property out of your possession and possibly avoid gift and estate taxes that can be incurred and a later date. Once it is set up, this type of trust can not be altered or changed. This process is also often very costly. The reason it is important to set up n irrevocable trust is to protect your heirs and loved ones from having to pay taxes on the items you leave them.
Ways to Set Up an Irrevocable Trust
There are a few ways to set up an irrevocable trust. One of these is to purchase a trust kit. These are packages in the form of books with forms or software packages. These kits allow you to create a trust with no outside help. Their prices range from as little as $50.00 to as much as $500.00. One thing to keep in mind if you choose this route is to assure that the kit you purchase includes the laws and statutes that are specific to the state that you live in.
Also, it is recommended to have this looked over by an estate planning attorney, to ensure you have completed this correctly.
Another way this task can be completed is to hire an estate attorney. This method is the preferred method, as only a professional that focuses in this field can ensure that this document is drafted correctly according to the laws of your state. The cost of an attorney can vary from $1500+ depending on the complexity of the trust.
How Long Does It Take?
When you are needing to take care of this issue then you should be prepared to spend a considerable amount of time completing the process. Both previously mentioned methods require a great deal of time to correctly complete the process of an irrevocable trust. If you hire an attorney, a way to avoid an escalating bill is to assure that the quote you receive is all-inclusive.
This process can take weeks to months, depending on how well prepared you are with your documentation and how long it takes you to get the information needed to complete your trust.
Additional Fees to Be Aware of
In some situations, there is an additional expense of transfer fees. If you have a substantial amount of assets this can prove to be a very costly expense. In the case of real estate transfers, there are transfer fees that you must pay.
Additionally, a transfer fee must be paid for each car that is included in the irrevocable trust. Therefore, if you have several properties and vehicles this could end up being a costly process since the prices per transfer ranges from $20.00 to $100.00 per transfer.
If the person filing the irrevocable trust has a tremendous amount of assets and research and tracing of possessions is required, then the cost will likely escalate due to the increase in time required to track down all the estate assets.
If there is a requirement to change the names on investment accounts, then there will be additional fees required for those services as well. There is also the issue of insurance policies that can also increase the expenses required in completing the trust.
Who Are the Parties Involved in an Irrevocable Trust?
There are three main entities involved in the irrevocable trust. The grantor is the person who creates the trust, which is the person who has the assets that will be distributed. Next, you have the beneficiary or beneficiaries. These are the people who will receive the assets that the trust was created for. The last person involved with a very vital role is the trustee. This person can be a bank, a lawyer or other person of importance who is trusted to carry out the wishes and requests that are dictated in the irrevocable trust.
The relationships of these individuals will be described in the body of the trust to eliminate any controversy and to clearly and concisely explain the wishes of the asset holder. The trust must abide by the regulations of the specific state in which the asset holder was living in and be in accordance with that states state laws. With this thought in mind, that is one reason that many who prepare an irrevocable trust do so through a lawyer since they are much more familiar with the laws that must be followed.
Should you have any questions regarding irrevocable trust filing, please contact us at Tompkins Law at 1-714-385-0044. Our staff is experienced in these matters and will assist you with any concerns you may have. Call us today for a free and confidential consultation.