An irrevocable trust is a type of trust that, once created, generally cannot be changed or revoked. It is commonly used to protect assets, reduce estate taxes, and plan for long-term care. Because the assets are no longer considered part of your estate, they may be shielded from creditors and legal claims. While irrevocable trusts offer less flexibility, they provide strong legal and financial benefits for individuals looking to preserve wealth and plan for the future.
At OC Wills & Trusts, our attorneys have been serving clients throughout Orange County since 2008. We focus solely on estate planning, offering experienced guidance tailored to your unique situation. Our firm is committed to transparency, with no hidden fees or surprise costs. When you choose us, you’ll receive a clear, effective estate plan that reflects your goals and protects your legacy.
What Are Irrevocable Trusts?
Generally, there are two types of trusts: revocable and irrevocable. A revocable living trust takes ownership of your property but allows you to continue managing it while you are alive. Probate becomes unnecessary because you no longer own the assets.
An irrevocable trust becomes effective during your lifetime but cannot be amended or modified. Assets transferred into the trust must remain there permanently. The person making the trust, the “grantor,” no longer owns the assets. The trust appoints a trustee to manage the assets on behalf of the beneficiaries. Assets in an irrevocable trust are not subject to estate taxes, probate, or creditors’ claims.
Types of California Irrevocable Trusts
There are various irrevocable trusts, including:
Marital Trusts
A Marital or “Bypass” Trust helps married couples with substantial estates reduce estate taxes upon the death of a spouse. In this arrangement, the property of the spouse who dies first is transferred into an irrevocable trust for the benefit of the surviving spouse. That individual can use the income from the trust property; it does not become part of their estate, and, therefore, it is not subject to estate taxes.
Trusts for Minors
This irrevocable trust protects the welfare of minor children until they reach adulthood. Some trusts for minors provide for a child’s health, education, maintenance, and support during childhood. Others only distribute funds when the child reaches a specific age or achieves a particular goal, like graduating from college.
Special Needs Trust
A special needs or supplemental trust provides for a disabled child or adult who receives public benefits such as Social Security Disability or Medicaid. A large inheritance could disqualify that individual from these vital benefits. With a special needs trust, assets are used to cover the beneficiary’s day-to-day expenses while preserving their eligibility for government benefits.
Spendthrift Trust
A spendthrift trust protects a beneficiary who cannot manage their finances, is at risk of creditors’ claims, or has a problem with alcohol, drugs, or gambling. Trust assets are managed by the appointed trustee who can either provide funds to the beneficiary on a scheduled basis or pay the beneficiary’s monthly expenses.
Medicaid Trust
Medicaid is the single largest payer of skilled nursing care, but many individuals do not qualify based on their income and assets. Our trust attorneys can help to create an Irrevocable Medicaid Trust. Assets held by this type of trust are not counted as resources for Medicaid eligibility limits.
Charitable Trust
One way to leave a charitable legacy is by creating a charitable trust, which minimizes taxes by combining gifting with charitable donations. In a charitable remainder trust, the property is transferred into the trust, a designated beneficiary, such as a spouse, receives income from the trust for a set period, and the remainder goes to a named charity.
Life Insurance Trust
Life insurance with a designated beneficiary passes outside of an estate; however, the proceeds of a life insurance policy are included in the total value of the estate, which may have estate tax implications. An Irrevocable Life Insurance Trust (ILIT) owns the policy and appoints a trustee to distribute the proceeds to the designated beneficiaries when the grantor dies.
Dynasty Trust
Also referred to as a generation-skipping trust, this estate planning vehicle is created to avoid or minimize estate and generation-skipping taxes when transferring wealth from one generation to children, grandchildren, and great-grandchildren.
Why Choose Us For Your Irrevocable Trust?
At OC Wills & Trust Attorneys, we advise clients from all walks of life on irrevocable trusts. We are not only astute trust attorneys but compassionate people genuinely concerned about our clients’ needs. When you meet with us, we will take the time to understand your circumstances and tailor a trust to your unique objectives. Above all, we will work in your best interests and help protect your assets, loved ones, and legacy.
Contact Our Experienced Orange County Irrevocable Trusts Attorney
A common misconception is that trusts are only for the wealthy, but many estate planners can benefit from creating irrevocable trusts. When you work with OC Wills & Trust Attorneys, you will have comfort and confidence with our legal team at your side. Contact us today to get started.
With offices in Irvine, Huntington Beach, and Anaheim, OC Wills & Trust Attorneys also serves clients throughout Southern California, including Mission Viejo, Huntington Beach, Costa Mesa, Seal Beach, Long Beach, Fountain Valley, Newport Beach, and the greater Orange County area.
