What is an Irrevocable Trust and How Does it Work?

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What is an Irrevocable Trust and How Does it Work?

What is an Irrevocable Trust and How Does It Work?

An irrevocable trust is a trust that allows for certain protections for the creator of the trust. In exchange for these benefits the creator of the trust

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Richard

 

[pedro47]

Richard, Thanks for sharing this article.

 

[VacationForever]

What is not mentioned in this article is that irrevocable trusts incur very high income tax rates for computed growth in the portfolio. When I checked a couple of years ago, it was something like 35% tax rate and I nixed the idea.

 

[Brett]

What is not mentioned in this article is that irrevocable trusts incur very high income tax rates for computed growth in the portfolio. When I checked a couple of years ago, it was something like 35% tax rate and I nixed the idea.

but most estate planning uses the “grantor trust” form of an irrevocable trust so it's taxed at the beneficiaries tax rate

 

[mdurette]

It should also be known that it is very hard to get any type of mortgage or home equity on a house in an Irrevocable trust. Line all that up before you put it into one.

 

[VacationForever]

but most estate planning uses the “grantor trust” form of an irrevocable trust so it's taxed at the beneficiaries tax rate

True but I decided not to pursue it none the less. It would have added another level of complexity to our estate planning.