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Charleston Inheritor's Trust Attorney

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Inheritor’s trusts allow you to protect your income from creditors and exclude it from your estate for federal estate tax purposes.  While South Carolina’s laws do not allow you to protect your own assets once you have received an inheritance, if you are expecting an inheritance from someone who is not able or willing to put the inheritance in an asset-protected trust, you can protect these assets yourself by creating an inheritor’s trust.  This kind of trust protects your assets from others’ access while allowing you to access them as necessary.  Further, you have the option of appointing these assets to a trust to benefit your children, which will provide similar benefits and protections for them and subsequent generations.

What is an Inheritor’s Trust?

An inheritor’s trust, often called an irrevocable trust, is a trust which cannot be amended or revoked.  Once you place assets in an inheritor’s/irrevocable trust, they are no longer yours.  You are essentially giving them away for good.

Why Set Up an Inheritor’s Trust?

Trusts are created with the intent of benefitting a recipient in the future.  Inheritor’s trusts take this concept one step further, by creating a kind of trust that protects trust assets as much as possible from taxation, creditors, and parties the trust is not intended to benefit.  Inheritance that is given to children as an outright gift under the terms of a will or trust can be included in the taxable estate of that child, which makes it open to claims from creditors, divorcing spouses, and others who may want to access this money.  Most donors want to ensure their beneficiaries, not other third parties, receive as much of their assets as is legally possible.

How Do You Set Up an Inheritor’s Trust?

Often, parents have already created a trust providing their children with access to inheritance, and this trust is not an inheritor’s trust.  In these situations, parents and their children have several options when it comes to ensuring the trust assets are protected in the form of an inheritor’s trust.  First, the parents can amend the language of the existing trust, however this requires parents paying attorneys fees and amending a document they may not want to touch.

In the event that a parent or other donor is unwilling or unable to convert the existing trust to an inheritor’s trust, the recipient of the inheritance may create an inheritor’s trust. By utilizing the services of a skilled South Carolina estate planning attorney, an inheritor may themselves draft the trust and then request their parents add simple language to their existing trust directing that the ’ trust assets be payable to the child’s newly-created inheritor’s trust.  This kind of language change is simpler to effect, and because it only requires a small change, parents are usually more likely to implement it.

What Are the Features of an Inheritor’s Trust?

Inheritor’s trusts can either be set up as a standalone trust or as separate trusts, depending on the wishes of the donors and beneficiaries.  Generally, all inheritor’s trusts have the following attributes:

  • Perpetuity – inheritor’s trusts are designed to continue for as long as the law allows them to exist
  • Separation of tax-exempt and non-exempt transfers – inheritor’s trusts allow you to ensure that assets which can be exempt from taxes will be exempt
  • Ability to set up or merge trusts – inheritor’s trusts allow trustees to create secondary or sub-trusts, as well as merge trusts under certain situations, like when a grantor dies
  • Control – inheritor’s trusts give beneficiaries full control over the assets within a trust, including management and investment decisions
  • Re-writing – inheritor’s trusts give beneficiaries the power to re-write the trust, meaning beneficiaries can tailor the trust for future generations, or in light of changes to the law or family circumstances

Can I Convert an IRA Into an Inheritor’s Trusts?

IRAs are among the most common estate planning vehicles, and it is common for IRA holders to want to ensure that their IRA assets are preserved for their descendants.  An IRA can be set up as an IRA inheritor’s trust to guarantee that your IRA account is held in benefit for your future beneficiaries.  Generally, this is achieved by establishing different sub-trusts within your IRA as inheritor’s trusts to benefit specific beneficiaries.

Other benefits of using an IRA inheritor’s trust are that it helps you avoid certain IRS penalties, protects your IRA assets from creditors and divorce proceedings, and allows trustees to manage the distribution of IRA assets so to prevent beneficiaries from imprudently spending IRA assets.

Do I Need a Trustee to Manage My Inheritor’s Trust?

While one of the benefits of inheritor’s trusts is that they afford beneficiaries a wide degree of control over the trust, trusts are commonly managed by independent trustees who work to ensure that the intent of trust is carried out and all its beneficiaries are provided for.  An independent trustee can also serve as a neutral resolver of trust disputes. To ensure that your inheritor’s trust is properly managed, you can secure the services of an experienced South Carolina estate attorney.

How Do I Set Up an Inheritor’s Trust?

If you live in South Carolina and expect to inherit in the future and have questions about setting up an inheritor’s trust, the attorneys at Wiles Law Firm, LLC, are ready to help you.  We have helped numerous clients protect and preserve their wealth for the benefit of generations to come, and will work with you to make sure your assets are in the best position to help you as possible. Contact the Wiles Law Firm, LLC, today to learn more about your options for creating an inheritor’s trust.


Wiles Law Firm, LLC helps clients with their estate planning needs in Charleston, South Carolina and the surrounding areas such as West Ashley, Summerville, North Charleston, Mount Pleasant, and John's Island.

Information on this website is not legal advice. Further, viewing of the enclosed information does not create an attorney-client relationship with Wiles Law Firm, LLC. Matters will be handled by attorneys who primarily practice out of our office in Charleston County located at 852 Lowcountry Blvd., Ste. 101, Mt. Pleasant, SC 29464. M. Emerson Wiles, III is the attorney responsible for this advertisement.

Any result Wiles Law Firm, LLC may achieve on behalf of one client in one particular matter does not necessarily indicate similar results can be obtained for other clients. Please contact a South Carolina estate planning attorney or one of our attorneys with Wiles Law Firm, LLC for a consultation regarding your unique estate plan.



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| Phone: 843-718-0232

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