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Should you choose irrevocable trusts to protect your assets?

You've worked hard to live a life with many assets, and at this point, you just want to protect as many of them as you can. As you age, you know you could risk losing assets to the government if you do not plan carefully.

There is an easy solution. If you want to protect your assets, one of the things you can do is have an irrevocable trust. This trust cannot be terminated or modified without a beneficiary's permission. You, the grantor, transfer assets into the trust. This removes the assets from your ownership.

Why is this important? This means that the items are no longer yours and cannot be taxed as yours. This prevents beneficiaries from misusing the assets but also allows you to take advantage of the estate tax exemption. It allows you to remove taxable assets from your estate, lowering how much you would owe overall.

The good news about an irrevocable trust is that any assets you place into the trust can still retain the ability to create an income. For example, if you place a rental property in the trust, the income from the rental property will continue. This is a fairly complex legal arrangement, so it is not something that you want to do on your own. Your attorney can help you decide if the irrevocable trust is the right option compared to other trust options, like a revocable trust. This and other options can round out your estate plan and create an individualized plan that is ideal for your situation in New Jersey.

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