Louisiana offers various estate planning options, including irrevocable trusts, which are widely used for asset protection and tax planning purposes, regardless of income level. It is worth noting that there are different variations of these trusts available, allowing individuals to choose the one that best suits their specific needs.
What Exactly Is an Irrevocable Trust?
An irrevocable trust is a trust that a Settlor cannot change or end after the trust has been created. This trust is also different from a revocable trust because it is permanent. As a result, a Settlor can keep a significant amount of control over an irrevocable trust.
Different Types of Irrevocable Trusts in Louisiana
There are countless types of irrevocable trusts that individuals can choose from in Louisiana. These trusts are usually flexible and tailored to suit the different circumstances of the individual creating the trust.
The following are some of the more common types of irrevocable trusts that tend to be used in practice:
- An Irrevocable Life Insurance Trust (ILIT): An ILIT is created to own and receive life insurance proceeds. It is also used to remove the value of a life insurance policy from the gross taxable estate of an insured.
- A Domestic Asset Protection Trust (DAPT): This type of trust allows a Settlor of the trust to be a discretionary beneficiary while protecting them against creditor claims.
- Medicaid Asset Protection Trust (MAPT): The primary goal of a Medicaid Asset Protection Trust is to transfer assets to it. This way, Medicaid will not take these assets and count them toward the resource limit when trying to figure out whether a person qualifies for Medicaid benefits.
- A Dynasty Trust: This long-term trust is usually created to pass wealth from one generation to the next without incurring certain types of transfer taxes, including estate and gift taxes.
- A Grantor Trust: This irrevocable trust is created by an individual when they want to remain the owner of their assets and property for income and estate tax purposes.
- A Special Needs Trust: This irrevocable trust is designed to protect and preserve government benefits, including Social Security Income or Medicaid, for special needs beneficiaries who will likely need continuing care.
Although the above trusts represent some of the more common irrevocable trusts, this list is neither exhaustive nor covers every type of trust available. If you want further information about irrevocable trusts and your options, consider reviewing your questions with an experienced Louisiana estate planning attorney today.
Contact Losavio & DeJean, LLC, To Go Over Your Estate Planning Options
If you are looking to create a simple irrevocable trust, or need assistance with more detailed estate planning, look no further than Losavio & DeJean, LLC. Our skilled legal team is here to provide you with the comprehensive and experienced legal representation you need. Contact us today to review your estate planning options and get the answers and legal help you require.