You’ve worked hard to build your business. The last thing you want is to see it torn down piece by piece by creditors or a downturn in the market. What protections can you put in place to protect yourself and your business? You may wish to consider the benefits of an irrevocable trust.
The Law Office of Angela Siegel works to provide sound legal advice to clients throughout Garden City, New York. Our legal team can help protect your business assets with thoughtful and diligent financial planning and legal preparations. What can an irrevocable trust do for your business? We have the answers.
What Is an Irrevocable Trust?
An irrevocable trust is a financial tool that turns over control of specific assets to a trustee for the benefit of the trust’s beneficiaries. Most irrevocable trust arrangements aim to minimize estate taxes and protect assets from creditors. When a grantor moves assets into an irrevocable trust, that person gives up control of those assets. The terms of an irrevocable trust generally cannot be changed or amended once the trust has been established, except by court order. In New York, an irrevocable trust can typically only be terminated when all parties agree, including the grantor, trustees, and qualified beneficiaries.
There are two types of irrevocable trusts: living trusts and testamentary trusts. A living trust is created and funded by an individual during their lifetime. Common living trusts include irrevocable life insurance trusts, grantor-retained annuities, and charitable remainder trusts. Testamentary trusts are created after death and are funded from the deceased’s estate, typically according to the terms of the individual’s will.
Irrevocable trusts seem like an odd choice for business protection. However, they offer certain protections that revocable trusts do not offer. Although revocable trusts are easily modified, they do not protect assets from creditors, the government, and legal action like an irrevocable trust can.
How Can an Irrevocable Trust Protect Your Business?
You can place your entire business in a trust. When you do so, ownership of the business is transferred to a trustee who must have the power to enter into business transactions on behalf of the trust. The trustee can then run the business. The trust can be established with limitations for the beneficiaries. Placing your business in trust can help it survive your death, as the trustee will already have been running the business and can help with the transition.
Placing your personal assets in an irrevocable trust can provide them with protection. First, consider the tax implications. Placing assets in an irrevocable trust means that you no longer control those assets. As these assets are no longer under your control, they are also not a part of your tax liability. Moving assets from your possession into an irrevocable trust can help you minimize the overall tax burden upon your death.
One of the most significant benefits of placing assets in an irrevocable trust is asset protection, especially for those engaged in businesses or professions that make them vulnerable to litigation. Usually, creditors cannot seize assets transferred to an irrevocable trust. Assets in an irrevocable trust are also protected from civil litigation judgments and divorce settlements.
However, in order for an irrevocable trust’s assets to be protected from creditors in New York, the trust cannot be established for your benefit. If the trust assets benefit you, creditors will still be able to reach them.
You Need the Help of an Experienced Attorney
Setting up an irrevocable trust shouldn’t be complicated. However, it is not something you should do without the help and expertise of a skilled New York asset protection attorney. At The Law Office of Angela Siegel, our legal team dedicates themselves to providing our clients with high-quality legal representation and responsive service. We take a comprehensive approach to business asset protection, outlining your options and personalizing a strategy that addresses your needs and meets your business goals.
Attorney Angel Siegel has extensive knowledge of New York legal practices, estate planning, and financial protection plans.
Contact a New York Asset Protection Attorney Today
Don’t watch your years of hard work and dedication crumble, falling into the hands of creditors, the IRS, or lawsuit judgments. Protect your business by placing it into an irrevocable trust. At The Law Office of Angela Siegel, we can review your unique situation and offer asset protection solutions that meet your business needs. Contact our office today to request a confidential legal evaluation.