Albuquerque Irrevocable Trust Lawyer

An irrevocable trust refers to a category of trusts that usually have a specialized purpose. Depending on the type of irrevocable trust chosen, the trust creator might be able to shield their assets from creditor claims, obtain significant tax savings, help them (or other family members) qualify for needs-based services, or provide other significant benefits.

The tradeoff for these specialized capabilities is that, once formed, an irrevocable trust cannot be significantly changed or dissolved, at least not easily. While there are ways to possibly alter an irrevocable trust in Albuquerque once it has been created, they typically require unanimous consent from all beneficiaries.

Court intervention may even be required in some cases.

Because of the immutable nature of these trusts, it is highly important to ensure that they are structured the way they need to be in order to provide the intended benefits. Talking with an Albuquerque irrevocable trust lawyer can help you anticipate risks and contingencies while planning for the best trust arrangement possible with respect to your long-term goals.

Find out more about how an irrevocable trust could help you and which one might be best-suited for your objectives during a confidential, no-obligation consultation. Schedule your no-risk discussion at New Mexico Financial & Family Law now when you call us at (505) 503-1637 or contact us online.

How an Albuquerque Irrevocable Trust Attorney Can Help You

Forming an irrevocable trust requires a substantial commitment. In nearly every case, the trust creator (called a grantor) will never be able to fully reclaim the assets they used to fund the irrevocable trust.

Of course, when the goal of such a trust is to distribute property to loved ones, this quality may not be considered a problem.

Nevertheless, grantors will want to think carefully about the type of irrevocable trust they form and how it is structured. They can work with an experienced Albuquerque irrevocable trust attorney to receive professional guidance and personalized services, which ensure they can make all of the proper arrangements.

Their attorney will be able to help them set up the trust in a way that is capable of minimizing risks while helping them succeed in their goals.

When you come to New Mexico Financial & Family Law, we make sure to listen carefully to your goals and review the relevant portions of your financial portfolio. We can then make tailored recommendations for forming an irrevocable trust, helping you account for possible risks while using the best strategy possible for accomplishing your financial and legal objectives.

You can expect the following services and guidance from a highly experienced Albuquerque irrevocable trust lawyer when you work with our law firm:

• A high-level overview of all Albuquerque irrevocable trusts that may be relevant to your personal, legal, and financial goals
• Detailed explanations of the types of irrevocable trusts you are more interested in, along with comprehensive answers to all of your related questions
• An in-depth review of your financial portfolio, including the assets you are most likely to place within a trust
• A review of your intended beneficiaries, along with personalized recommendations based on the characteristics of these beneficiaries, such as if they are your spouse or children versus grandchildren
• Helpful examples and hypotheticals based on common trust structures
• Full disclosure of all your legal rights as grantor, including whether you may be able to serve as trustee of the irrevocable trust or name yourself as a beneficiary
• Any rights, powers, and legal obligations given to your beneficiaries, including their ability to correspond with the trustee
• Contingency plans to help you prepare for any possible risks to your trust strategy, especially in the event of a volatile economy
• Assistance with selecting a trustee, along with a contingent trustee, in case the first one is unable to serve
• Consideration of appointing a trust protector, who would monitor the trustee and could potentially assist with making adjustments to the trust, in cooperation with beneficiaries
• Preparation for any tax considerations for all interested parties as well as for the trust itself, since it may be reporting income as its own, depending on the irrevocable trust’s structure
• Incorporation of the trust into your overall estate plan, especially if it is going to be a testamentary (will-created) trust

When you establish a relationship with our Albuquerque irrevocable trust attorneys, you can also expect us to be around for the long haul. We make ourselves available to you for any follow-up questions or legal assistance.

Our goal is to give you complete peace of mind, knowing that your irrevocable trust is capable of delivering on all the benefits you sought when you decided to form one in the first place.

How Does an Irrevocable Trust Work in Albuquerque?

An irrevocable trust is formed when the grantor legally signs over ownership of some of their assets to the trust. Assets that can be used to fund an irrevocable trust include:

• Cash
• Banking, brokerage, or investment accounts
• Life insurance policies
• Publicly traded securities: stocks, bonds, mutual fund shares, ETFs, etc
• Real property (i.e., real estate)
• Certain closely held business shares, including equity or debt (may not include S-corporation shares, depending on the trust)
• Personal property, including vehicles, boats, etc.

Once the trust is funded, it is managed by a trustee. In some cases, the grantor can serve as trustee. In others, the trustee must be a non-interested party, meaning they cannot be the grantor or a beneficiary — or closely involved with anyone who is either.

The trustee is responsible for overseeing all aspects of the trust, including managing its investment portfolio while keeping up with ongoing responsibilities, like reporting taxes. The trustee must also distribute funds from the trust to beneficiaries according to the terms set by the trust’s founding documents.

The types of distributions made depend on the structure of the trust, the powers of discretion given to the trustee, and any instructions they are provided.

Some beneficiaries may receive their distributions on a regular basis, such as monthly or annually. Other times, beneficiaries only receive a distribution from the remainder value of the trust when it terminates. A beneficiary may receive both. They may even receive distributions only when the trustee determines that it is appropriate, as is the case in a discretionary trust.

Irrevocable Trusts Cannot Be Dissolved or Significantly Modified by the Grantor (Except Under Certain Circumstances)

When a grantor forms an irrevocable trust, they have effectively given up all claim to the assets they hand over to it. While the grantor could, potentially, be a beneficiary, they are not guaranteed to receive the asset intact (unless the terms of the trust specifically state that this is the case).

For many irrevocable trusts, the trustee has broad discretion for how to manage its asset portfolio. The trustee may decide to sell a piece of property, for example, to liquidate its value and reinvest the proceeds in an expanded portfolio of securities.

When this happens, the grantor may receive cash payments from the trust, rather than getting their property back intact.

Of course, the grantor can always include a requirement for the trustee to leave certain assets alone unless extreme circumstances force them to liquidate. When the trust is formed, the trustee will be given instructions for how to manage the trust’s asset portfolio, including whether they are to prioritize growth or the preservation of a certain mix of assets.

The point is that irrevocable trusts take assets out of your control as the grantor. Unlike a revocable trust, you have no universal right to make substantial alterations to the trust, either.

While a grantor could, in theory, dissolve a revocable trust at any point in time to recover their assets from it, an irrevocable trust specifically bars this type of action.

Why would anyone give up control of their assets in this way? The answer: to obtain specific benefits.

The legal arrangement of an irrevocable trust makes it so the assets are not technically part of the grantor’s estate, nor are they directly owned by the grantor. This separation can provide substantial benefits, some of which we list in the section below.

With an irrevocable trust — as opposed to an outright transfer of assets — the grantor has some psychological security in knowing that the trustee is bound to the agreement of the trust. They also know that there is some measure of guarantee that beneficiaries will eventually receive distributions from the trust, as intended (although the trustee’s level of discretion or the trust’s performance could affect this outcome).

Benefits That Could Be Obtained From Forming an Irrevocable Trust in Albuquerque

Some advantages of an irrevocable trust may include:

• Substantial tax exemptions or deductions (e.g., charitable trusts, grantor-retained annuity trusts, qualified terminable interest property trusts)
• The ability to give posthumous charitable gifts in a tax-advantaged way (charitable trusts)
• Asset protection (a domestic asset protection trust, offshore asset protection trust, or discretionary trust)
• Protection against beneficiary influence (discretionary trust, spendthrift trust, blind trust)
• Guaranteed distributions to certain beneficiaries (bypass trust, credit shelter trust, marital trust)
• Removal of assets from your view and influence so as to eliminate conflicts of interest (blind trust)
• Removing assets or other trust interest from the ownership of a grantor or beneficiary, potentially allowing them to qualify for income-based programs like Social Security Disability Insurance (SSDI) through a special needs trust — or Medicaid Long-Term Services and Supports (LTSS) through a Medicaid trust

Note that there is not an irrevocable trust that could do all of the above at once. Instead, the grantor will choose the type of trust they want based on the benefits they are seeking. In some cases, it may be possible to combine multiple benefits at once, such as combining asset protection with charitable giving.

Living Trust vs. Testamentary Trust

An irrevocable trust created during the grantor’s lifetime is referred to as a living trust or sometimes an inter vivos trust.

An irrevocable trust that is created after their death, on the other hand, is referred to as a testamentary trust. This name stems from the fact that such trusts are often created from a provision of the grantor’s last will and testament.

Note that all living trusts become irrevocable when the grantor dies unless special arrangements are made that allow someone to take ownership and control over it.

Can an Irrevocable Trust Be Changed or Dissolved Once It Is Started?

Making drastic changes to an irrevocable trust is possible, but it is rarely easy.

The most common mechanism for changing the irrevocable trust is for all beneficiaries to agree unanimously on a change. They can then petition the trustee with their request.

In some states, the beneficiaries will need a court order to consent to the change. The trustee may even need to be ordered to do so against their will if the language of the trust otherwise forbids them from making the change.

In addition, a grantor can appoint a special role known as a trust protector as part of their irrevocable trust arrangement. The trust protector can be given the power to monitor the trustee, demand changes, or even remove the trustee, depending on the foundational language of the trust.

Beneficiaries (and, sometimes, the grantor) may also be given what’s known as “powers of appointment” over the trust. These powers may allow them to access the principal funding value of the trust, for example, or change the way distributions are handled.

You can review your options for forming a trust with a trust protector or powers of appointment when you refer to an Albuquerque irrevocable trust attorney. They can help you balance goals like tax-advantaged charitable giving or asset protection with provisions that can safeguard assets from being used in a way contrary to what beneficiaries would wish.

Get Guidance From an Experienced Albuquerque Irrevocable Trust Law Firm

Irrevocable trusts include many of the most complex types of trust structures, but they also tend to offer special capabilities compared to revocable trusts. If your goal is to take advantage of certain laws or tax arrangements, you can use irrevocable trusts to secure assets and also remove them from your ownership in a beneficial way.

The key with any irrevocable trust is to make sure it’s done right the first time. To feel confident about your choices, you can refer to our Albuquerque trust law firm.

We’ll help you understand all of your options and choose the perfect irrevocable trust with reference to your unique goals, asset portfolio, and beneficiary situation.

Learn more about all the opportunities that await you during a confidential, no-obligation consultation. Call New Mexico Financial & Family Law at (505) 503-1637, or contact us online to schedule your consultation and estate plan review today.