While most people are aware of the need to do estate planning to eliminate the cost of probate and reduce estate taxes through the use of revocable living trusts and pour-over wills, very few people are aware of the benefits of using irrevocable trusts as part of their estate planning strategy.
The benefits that can be achieved by receiving and retaining gifts and inherited assets in an irrevocable trust are significant. A person other than the beneficiary of the trust, including a spouse of the proposed beneficiary, can create and fund the trust. A perpetual dynastic trust can extend these enhancements for multiple generations. These enhancements fall into three categories:
1. The trust "shelters" inherited assets from the donee’s "predators."
