What Should A Person Consider When Naming A Trustee For An Irrevocable Trust?
Once a person names a trustee for an irrevocable trust, it can never be changed; it is a one-time designation. They can put provisions in for successors to that person and allow third parties to name a successor if that original trustee is unable to serve, but the settler will not have the right to change the trustee.
Can An Irrevocable Trust Agreement Ever Be Amended?
An irrevocable trust agreement can never be amended. However, some irrevocable trusts have terms in them that allow the settler to make minor changes within the trust without amending the trust. For instance, a charitable remainder trust is an irrevocable trust that would provide income to the settler during their lifetime, and the rest would go to charities after the settler’s death. This type of trust can allow the settler to change the ultimate charities from time to time. Since the trust allows this and it is of no direct benefit to the settler, it’s not considered an amendment to the trust. So, there are some things that the settler can change within an irrevocable trust, but they have to be designated at the time that the trust is established.
How Much Can I Transfer Without The Application Of Gift Tax?
The simple answer is $14,000 per year, per person. Any individual may make gifts of up to $14,000 to as many different people as they choose during each year, and it does not trigger any gift tax consequences. The more difficult answer is that the gift tax and the estate tax are combined, so above and beyond that $14,000 a year, a person may give a lifetime total of approximately $5.5 million under the current laws without triggering a gift tax. In addition, a person may make gifts to their spouse or to charities in any amount without incurring any gift taxes or using up any of their inheritance tax exclusions.
Can I Make Additions To The Irrevocable Trust In Future Years?
It is possible to set up an irrevocable trust that would allow a person to contribute additional assets from time to time, and that would allow other parties to contribute assets to that same trust. There are a few trusts that do not allow this, charitable trusts being one.
How Do I Get Started When Setting Up An Irrevocable Trust?
You should absolutely meet with your attorney, financial advisor and accountant. Because of the irrevocability, you need to be certain that it’s the right thing for you to do before you actually do it. You will need those professionals to help you understand all of the consequences and be sure that you are not putting yourself in a difficult position later on because of your decision.
For more information on Trustee In An Irrevocable Trust, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (626) 385-6303 today.
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