Minnesota could offer you a range of options when it comes to estate planning. An irrevocable trust is one of these tools. When you create one of these trusts, you basically set up a separate legal entity over which you have no control and supply it with assets. In this role, you would be the grantor, trustor or settlor.
This naturally begs the question of why you would want to create an irrevocable trust. Although it would largely depend on your circumstances, there are some indications that this type of estate planning tool could be useful to you. Please read on for a brief description of some of these conditions.
Irrevocable trusts are often most useful to those who have earning investments to protect. As discussed in US News, one of the main reasons you may want to consider this option is to lower your tax burden. For example, irrevocable trusts file income taxes separately.
Another indication that you may benefit from an irrevocable trust is if you may qualify for the federal estate tax. If you have composed your strategy and are still at risk of significantly surpassing the estate-tax threshold, then you may benefit from the fact that the IRS would not consider assets held in an irrevocable trust to be part of your estate.
Generally speaking, an irrevocable trust would probably function best as a single component of a complex estate plan. However, every case is different. Please do not use anything in this article as legal advice. It is only intended to inform you about the general topic.