Can Irrevocable Trusts Be Altered?
An irrevocable trust can be an integral part of estate planning. There are specific rules and regulations regarding irrevocable trusts in Texas. In most cases, it cannot be altered or terminated. So, before creating one, all considerations must be taken into account.
If you are in need of a Dallas trust attorney, count on the expertise of the Vermillion Law Firm LLC. With dozens of years of combined experience in estate planning, our team will work tirelessly to help you win your case. Allow us to help you understand your options and an irrevocable trust best fits your needs.
What Is an Irrevocable Trust?
An irrevocable trust is when a grantor’s assets are transferred to the control of a named beneficiary. Once this takes place, the trust cannot be altered, changed, or terminated unless consent is given by the beneficiary or ordered by the court.
The main purpose of an irrevocable trust is to reduce estate taxes and protect assets from being seized by creditors. While rules can vary depending on the state, the key elements remain intact. If you live in Texas, you must file a Texas irrevocable trust form to create one.
Pros and Cons of an Irrevocable Trust
There are reasons why an irrevocable trust may be your best option. However, there are also reasons why you may decide against it:
Pros of an Irrevocable Trust
- Tax Avoidance –In some instances, the tax liability can be reduced by moving taxable estate assets into an irrevocable trust. This action is often taken by large estate owners.
- Protection of Assets –Assets in an irrevocable trust is protected from creditors, divorce, and judgments. People employed in lines of work that often get sued are more likely to use irrevocable trusts.
- Beneficiary Protection –Irrevocable trusts can be an important tool when a family member with special needs is receiving aid. This “irrevocable special needs trust” allows the disabled family member to receive funds to live on. They cannot be penalized by the government if they are already receiving benefits.
Cons of an Irrevocable Trust
- Unforeseen Circumstances –While establishing an irrevocable trust may seem like a great choice, things can change down the road. If your situation changes, it may not be easy to change or terminate the trust at a later time.
- Loss of Control –If you wish to maintain control over your assets, you need to ask yourself, “Is an irrevocable trust a good idea?” The answer is likely, no. Changing terms is far more difficult than one may think. It requires all parties to be on board — and that may not be an option. Only a trust administration attorney in TX can answer your questions.
Can You Alter an Irrevocable Trust?
If you live in the state of Texas, there is a slight chance that your irrevocable trust could be terminated if the following occurs: a judge overturns the order or if all parties, including beneficiaries, are in agreement.
This can be a high hurdle in both cases. A judge may consider modification or termination if the purpose has been fulfilled or if there is some illegality attached to the order. If this doesn’t happen, the trust will continue under the terms that were first established. There is often a certain date for the trust to end, or it will also end when the creator dies.
How Can a Trust Attorney in Dallas Help?
If you need more information about irrevocable trusts, seek out the help of a qualified trust attorney in Dallas. Only they possess the expertise to help you understand your options.
An estate attorney will help you understand the pros and cons and how an irrevocable trust could affect you and your family. There are very strict laws regarding irrevocable trust in the state of Texas. Several important factors must be taken into consideration before making a decision.
If you live in Dallas and are interested in setting up an irrevocable trust, reach out to an estate planning lawyer for guidance. Only a qualified attorney can help you make the best choice to suit your needs. Call Vermillion Law Firm LLC at 972-386-4560 for a free consultation.