Irrevocable trusts provide multiple benefits, but they do have some downsides. Understanding these disadvantages before electing which trust to use can help you make an informed decision about your own estate planning and your future.
Some of the biggest challenges associated with irrevocable trusts include complexity and costs, the fact that they cannot be revoked, and loss of control. Maintaining an irrevocable trust can be challenging administratively and financially, especially if you do not work with a qualified attorney to help you. Careful planning and knowledge with financial and legal professionals is essential for crafting a functioning irrevocable trust.
Irrevocable trusts cannot be modified or terminated after they are created, unless those changes occur with the support of all beneficiaries and potentially even court approval. This adds another layer of complexity. If flexibility is what you have in mind, it is far better to create a revocable trust.
Finally, loss of control associated with an irrevocable trust relates to the grantor relinquishing their control and ownership over any assets that are fully funded into the trust. This means that the creator of the trust cannot manage or access these assets directly as they are now under the designated trustee’s control only. If you have further questions about establishing an irrevocable trust and what to think about as you move forward in this process, consult a Pasadena estate planning lawyer today.
