Most people across Missouri who work on their estate plans do so with a similar goal in mind: maximizing how much of their wealth they can leave behind for their loved ones. While there are numerous different steps you can take in your efforts to accomplish this, one popular method of preserving wealth for future generations involves establishing what is known as an irrevocable living trust.
Per the Motley Fool, an irrevocable living trust is a type of fiduciary arrangement that can help you protect and preserve your assets, and there are several key benefits that come with establishing this type of trust. First, depending on the size of your estate, an irrevocable trust may help you avoid having to pay estate taxes on it. How?
While Missouri does not have its own estate tax, high-asset individuals may, depending on estate size, have to pay a hefty estate tax. Placing assets into an irrevocable trust, however, removes them from your direct ownership, meaning they will not tack on to the value of your estate.
Another big reason many people create irrevocable living trusts is that, in doing so, they can protect their ability to maintain eligibility for certain benefits, such as Medicare. To qualify for Medicare, you need to undergo means testing, and if you do not transfer certain assets into a trust, those assets could potentially place you above the financial threshold necessary to qualify for such benefits.
This information about the benefits of irrevocable living trusts is educational in nature and does not constitute legal advice.