From Our “Ask a Question” Mailbag: “Can you provide useful examples of Bucks County Irrevocable Trusts?”
Irrevocable Trusts are invaluable estate planning tools. They have many uses, but explaining them can be complicated. I find that examples help learn what is unfamiliar, so I hope you find these examples helpful. For more information, follow the links.
Examples of Bucks County Irrevocable Trusts Being Used Successfully:
To begin, I am assuming that you are somewhat familiar with Irrevocable Trusts. If you are not, or if you wish to refresh your memory, follow this link for a quick Irrevocable Trust Review. This page will be ready and waiting once you have the basics firmly in place.
Special Needs Child or Grandchild.
- Mr. and Mrs. Doylestown had three children, one of whom suffers from mental health problems. This child, Bristol, is unable to hold a job and is dependent on Medicaid. If they give Bristol any outright inheritance in their wills, Bristol will become ineligible for needs-based government benefits. Mr. and Mrs. Doylestown had us include in their wills a Special Needs Trust for Bristol. At the second spouse’s death, 1/3 of their assets pour into this trust. At their deaths, the trust becomes Irrevocable. Because we followed the terms set by Congress, these funds no matter how large do not disqualify Bristol. She continues to receive her needs-based benefits uninterrupted. The other siblings, Perkasie and Yardley, are named Protectors, with the right to hire and fire a trustee. This way, Bristol’s siblings are not put in the position of denying their sister money. Instead, they watch over a professional. The professional deals with Bristol directly. Should the trustee fail to perform as expected, Perkasie and Yardley are free to fire the trustee (at-will employment) and hire a replacement.
- At his death, Mr. Quakertown wishes to keep the transfer of his Chalfont property private. He has a friend living in the property and worries that his children will attempt to thwart his wish that the friend lives in the property. He has us draft an Irrevocable Trust into which he transfers the deed. The trust allows his friend to live in the house until her death. At her death, the trustee sells the property and gives the proceeds to Mr. Quakertown’s favorite charity. At his death, the house belongs to the trust. It is not part of his estate. It will not appear as one of his assets and his children have no power over that property.
Avoiding Inheritance Tax.
- Mr. Tullytown has owned his Poconos vacation home for 30 years. His son, Croydon, loves the property and hopes to use it until his death. But, Croydon cannot afford to pay the Pennsylvania Inheritance Tax at his father’s death. Mr. Tullytown has us draft an Irrevocable Trust for Croydon and his descendants. He then transfers the deed into the trust. If Mr. Tullytown lives one year, then the Poconos property avoids the Pennsylvania Inheritance Tax. Further, during Croydon’s life, the trust gives protection from his divorce and creditors.
I hope you enjoyed this article providing useful Examples of Bucks County Irrevocable Trusts. We are always happy to brainstorm with you about your own, unique situation.
Let our Estate Planning Lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our Estate Planning Attorneys. By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!
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