Can Irrevocable Trusts Ever Be Amended Or Modified?
It depends. We treat the trust as a done deal. Having said that, there are certain situations where an irrevocable trust can be amended, but it’s state-specific and it often requires literally every party in the trust to be on the same page. This is highly dependent on the specific wording of the trust documents, but there is often language that allowed the beneficiaries to collectively make an amendment to the trust – particularly if they are all lifetime beneficiaries. But as a general rule, don’t plan on it.
How Much Can Someone Transfer Into An Irrevocable Trust Without Reaching The Gift Tax Limit?
Every year, a person has a gift tax exclusion per gift per person. That limit varies on an annual level. For 2017, let’s say the exclusion is $14,000 per gift, so every year you can give $14,000 to each person without a gift tax issue. What that means for a trust is that if I have a trust designed for a child, and maybe I have three kids and I gift $14,000 every year to each kid, every year you can collectively build up that gift. With good investment, you can really grow the total sum but the idea is for gifts to take advantage of the annual exclusion. There is also a lifetime exclusion for both the gift and estate tax, which in 2017 is $5.49 million. Married individuals can effectively double that to just shy of $11 million.
That’s actually 10.98 million for a married couple. So if you’re going to make a big shot at the estate tax, that’s the asset limit. Everything below 10.98 million dollars is not taxed and that’s same for the gift tax exclusion – below that, for a married couple, is not taxed.
Can Someone Make Additions To An Irrevocable Trust Over The Years?
Of course. Contributions to an irrevocable trust are not limited. In virtually every trust, you can make a gift to it as often as you’d like. For example, with the annual gift exclusion, the grantor can contribute that $14,000 every year from the birth of that child until the day that child comes of age or that parent dies or decides to stop contributing. It’s applied to both parents individually, so that family can put in $28,000 gifts every year as long as they’d like. They can gift as much and as long as they like.
How Does Someone Initiate The Process Of Setting Up An Irrevocable Trust?
Many people might think it’s a simple thing to set up. It is actually very important to talk with somebody who can give you a good advice. I want to talk with people about what their assets are. So, typically, a financial statement is really helpful for us as far as understanding what people are working with. Beyond just the financial statement, we have a long talk with them about their values, their goals, what they are afraid of as far as taxes, any personal issues, what kind of big gifts they want to make to people, and what kind of things they want to support. The ultimate goal here is to make sure that the person setting up the trust is protected financially for their lifetime, and to make sure that the people and organizations they care about are supported even when they are no longer there to do that support in person.
Additional Information About Irrevocable Trusts In Georgia
The term irrevocable trust, is a broad term that overs any trust whose language cannot be changed by the grantor and where transfers to the trust cannot be undone by the grantor. There are many different types of irrevocable trusts, which are tailored to the needs of the client. When someone comes to our office to discuss their estate planning strategy, we can design the trust to accomplish their goals.
For more information on Modifying An Irrevocable Trust, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (404) 939-7562 today.
Get your questions answered - Call for a complimentary strategy session at (404) 939-7562.