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Ask the Estate Planning Expert: If I Use a Trust to Pass Money, Can I Access the Money if I Need It?

Insights & Ideas Team •  December 11, 2015 | Your Finances, Enjoying Retirement, Home and Family, Ask the Expert

By Elizabeth Taylor, former Director – Estate Market in the Specialty Markets Division

Each week our Northwestern Mutual retirement experts answer your questions. This week’s question:

If I use a trust to pass money to my heirs, can I still access that money if I need it at some point?

The answer here depends a bit: If your goal in using the trust is simply to direct your assets to pass to your heirs and you’re not concerned with those assets avoiding estate tax, then the answer is absolutely yes. This is exactly how a revocable living trust works.

If, however, you also want your heirs to avoid having to pay estate tax on those assets, then the answer is maybe. This kind of estate planning gets very complicated, so much so that it doesn’t make sense for me to go into detail about it here. You will want to work with a knowledgeable estate planning attorney and ask about setting up an irrevocable trust. But you should thoroughly discuss this option, as it can create tax issues if you ever do need to access the money. And remember, you’ll want to keep enough of your assets outside an irrevocable trust to support you in retirement.

Learn more about trusts by downloading our free guide: Your Estate Plan: Is a Trust Right for You?

Do you have a question for our Northwestern Mutual retirement experts? Click here to send your questions.


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