When building an estate plan, many people choose a will or trust as the primary way to distribute assets. A trust is a legal contract allowing you to transfer your assets to an account that you or another trustee can manage. It is a way to manage your assets while you are still alive and transfer them after your death. There are many types of trusts, but two of the most common ones are revocable and irrevocable trust. With a revocable trust, you can make changes; with an irrevocable trust, you cannot. But Rupert Merdoch is trying to break an irrevocable trust – and what does this mean for you?
A trust is a legal instrument that ensures your assets are managed according to your wishes during and after your life. The main reason people establish a trust Is for financial protection. It is a way to financially care for yourself and your loved ones. One way is to reduce estate and gift taxes for your beneficiaries. Another benefit of a trust is asset protection. Technically, if you do not own the assets, they cannot be taken away from you. But please understand that not all assets should be included in a trust.
A revocable trust can be changed or updated anytime you are alive. With a revocable trust, you can:
On the other hand, with an irrevocable trust, you cannot change, modify or terminate it. In theory, an irrevocable trust cannot be changed, but some tough legal battles may allow it. And this is the situation Rupert Merdoch is in.
Originally, Mr. Murdoch established a trust in which all four children have equal voting rights in the family business. But now that he is older and his children are grown, Mr. Murdoch would like to change the trust and allow his eldest child to control the estate without equal input from the other kids.
How can this be done? How can you break an irrevocable trust?
It is not easy, and it will cost you time and money, but there are certain situations in which you can break an irrevocable trust:
While irrevocable trusts are designed to be permanent, some complex legal ways exist to change the trust. But in general, you should assume that an irrevocable trust will remain exactly as it is when it was created.
If you are establishing a trust or need to try to amend an irrevocable trust, you need an experienced trust attorney on your side. An attorney can walk you through the steps of deciding what type of trust you need, how to enforce it, and how to break it when necessary.
Do you have questions about setting up a trust in Illinois? Contact us today at the Estate & Probate Legal Group at 630-864-5835. Our experienced attorneys understand applicable laws and can advise you on the best options to protect you and your loved ones.
Areas we serve: Cook, DuPage, Kane, Lake, Kendall and Will counties.
