Irrevocable Trust Lawyer – There are many different types of irrevocable trusts which serve very different purposes. A couple common irrevocable trusts include the Irrevocable Life Insurance Trust (ILIT) and the Special Needs Trust (SNT).
An ILIT is set up by a grantor (typically a Parent or Grandparent) who gifts money into the trust and chooses an independent trustee to manage it. Most commonly the trustee uses the gifted money to purchase and pay the annual premiums of a life insurance policy on the life of the grantor. The owner and beneficiary is the ILIT so that when the grantor dies the death benefit passes to the trust and is used according to the terms of the trust. The terms of the ILIT can limit how much a beneficiary will receive and at what ages they can access their portion. It also should have provisions which make it very hard for a creditor to invade the trust to pay for debts of a beneficiary. It is important to speak with an estate planning attorney about your specific situation to make sure that an ILIT is right for you and your family.
A Special Needs Trust (SNT) is typically set up by the parent, grandparent or guardian of a person receiving government benefits such as Social Security Disability (SSD) and Medicaid provided through the state (in Arizona this is ALTCS). This type of irrevocable trust holds money that would otherwise be gifted directly to the person because that outright gift would probably jeopardize their ability to continue receiving the government benefits until the gift has been spent. Not only can it affect the regular day to day services the person receives, but it can disqualify the person from programs that help teach the person how to be more self-sufficient. It is imperative that you speak to an estate planning attorney if you have any family members who will inherit from you and are receiving government benefits.