INTERNAL REVENUE SERVICE

9 Jun 2023 · 1 min

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In this brief video, Jerry Taylor explains whether a trust can shield assets from the Internal Revenue Service. He clarifies that the protection depends on the type of trust. Revocable trusts give the grantor full control over the assets, so the IRS can reach those assets. Irrevocable trusts, where the trust itself owns the assets and the grantor is legally separated, generally keep the assets out of the IRS’s reach. However, Taylor warns that if a transfer to the trust is deemed a fraudulent conveyance, the IRS can still pierce the protection. The video serves as a concise overview of trust structures and their implications for tax authority access.

Chapters

The Internal Revenue Service. Does a trust protect your assets from them? The answer to that is no and yes. It depends on what kind of trust you have. If you have a revocable trust, those assets are not protected from the IRS. With a revocable trust, you have total control of all of those assets, and because you have total control, the IRS can get to those assets. An irrevocable or irrevocable trust is different. You have totally disassociated yourself from those assets. The trust owns the assets, not you. So because of that, generally speaking, the IRS cannot get to the assets in an irrevocable trust. Note that I said generally speaking. If there's been a fraudulent conveyance of some type, the IRS will find that out. Do this to learn more.