Most financial planners are unfamiliar with some of the modern twists available with irrevocable trusts. They tend to be familiar with the older style of irrevocable trust that can pose several problems for those who use them. These problems include:
- Loss of control over the management of the assets;
- A separate EIN number for tax reporting purposes;
- A larger tax bills because of the way traditional irrevocable trusts are taxed;
- A loss of the step up in basis available to assets owned by an individual upon the death of the settlor; and
- The inability to change provisions or beneficiaries in the future.
The irrevocable trust, you have chosen does not suffer from any of the traditional problems discussed above. It is an Irrevocable Pure Grantor trust (IPUG™). With the iPug™ many of the advantages that are traditionally only found with a revocable trust can be provided in an irrevocable trust. Some may ask, why should we use an irrevocable trust instead of a revocable trust. Here is a summary of the reasons that the iPug™ trust is superior to the revocable trust and does not pose the problems that a traditional irrevocable trust presents: