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Revocable and irrevocable trust options for Kentucky residents

There are many different kinds of trusts that can be used to control and protect assets in Kentucky. Here let's discuss the two basic kinds of trusts: revocable and irrevocable.

Revocable trusts are often referred to as living trusts because they are typically set up and controlled by the trustmaker during his or her lifetime. Revocable trusts can also be modified or altogether revoked, and you as a trustmaker -- otherwise known as a grantor -- can be the initial trustee, with the right to take property out of the trust as you see fit.

Revocable trusts are excellent tools for keeping assets out of probate because property that is in the trust at the time of the trustmaker's death is not subject to the probate process. However, creditors may still take legal action to get assets out of a revocable trust.

With proper planning, you can ensure that your revocable trust becomes an irrevocable trust at the time of your death. Doing this will remove the property in the trust from your estate and into the irrevocable trust, thereby protecting the assets from your creditors. An irrevocable trust may also be useful in avoiding or reducing estate taxes.

Before setting up an irrevocable trust during your lifetime, it is important to know that you will lose control of the assets placed in the trust, and an estate planning attorney can help you make the decision that is right for your particular situation.

To learn more about trusts, wills, gift planning, business succession planning and other strategies for protecting estate assets, please visit the estate planning overview of Landrum & Shouse, LLP.

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