Irrevocable Trusts and Tulsa Ok Estate Planning Lawyers:
There are many differences between a revocable Trust and an Irrevocable Trust for the Purpose of Estate Planning and asset protection in Oklahoma. With an irrevocable trust the assets of the trust are placed beyond the control of the Trustor and managed solely by the Trust administrator. This is different than a revocable trust which uses the grantor as the manager as the trustee and the person who manages the trust assets. Many revocable trusts will be converted to irrevocable trusts upon the grantor’s death. This allows the grantor to manage his or her assets during their life time but upon death protects the remaining beneficiaries form those who might wish to tamper with the original trust creators wishes when gone. This is because the irrevocable trust can not be changed.
Catastrophic injury or illness and the irrevocable trust: Many people believe that by placing their assets in an Oklahoma Will trust you are asset protected from creditors and in particular from medical bills associated with your illness. Although a Trust is a great tool for protecting your assets a revocable trust will not protect the assets of your estate in the event of serious illness. For proof of this simply look to the Rules of Medicaid and how it defines a persons assets for the purpose of paying their major medical bills. In a revocable Trust Medicaid can force you to withdraw your assets as the Trustee and use the money or property to pay for the medical expense you have incurred as a result of the catastrophic illness or injury.
Like any trust the terms of the trust must be precise and must be tailored to the particular needs of the person making the trust. Government agencies like the IRS and Medicaid and the Oklahoma Bankruptcy Courts all have very precise language on what is an irrevocable or revocable trust. This difference can make all the difference in the world when you are protecting assets or limiting State and Federal Tax liability.