Mullen and Iannarone, P.C.
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Creating an irrevocable trust

An irrevocable trust may be a good option for some people in New York who are creating an estate plan. Unlike the revocable variety, an irrevocable trust cannot be changed. However, it offers advantages in protecting assets that a revocable trust does not.

An irrevocable trust has a number of uses. For example, placing property such as a life insurance policy in the trust's name removes it from the estate and thus can save on estate taxes. With a charitable trust, the creator can be paid an income while the rest of the assets will go to the charity after the creator's death. A dynasty trust is set up to preserve family wealth for decades or even hundreds of years. With a spendthrift trust, a person can arrange for more oversight for a loved one who may be irresponsible with money. A special needs trust will provide funds for a person who receives government benefits without affecting eligibility for those benefits.

Estate holders can set up these trusts while they're still alive. After the trust documents are prepared, the assets must be moved into the trust. At this point, the agreement must be signed. The trust may also be created on a person's death with a will or another estate planning document.

It is important that a person be thorough and accurate with all estate planning documents. For example, one common mistake is creating a trust and failing to fund it. Another consideration is keeping the estate plan current. Updating an existing estate plan may involve reviewing goals as well as assets and the family situation to determine whether changes need to be made. A trustee may no longer be suitable, or a person who has married, divorced or had children may need to alter the estate plan.

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