When you decide that adding a trust makes the most sense for your estate planning strategy, one of the next steps is to choose between a revocable or irrevocable trust. It’s understandable for clients to have questions about the differences between revocable trusts and irrevocable trusts.
The attorneys at Christman Attorneys, PLLC realize that while there are a variety of legal instruments designed to cover all of your bases, it can be confusing knowing which one checks all the appropriate boxes when it comes to your final wishes.
Revocable Trusts vs. Irrevocable Trusts
There are several differences between revocable trusts and irrevocable trusts, but one of the biggest is flexibility once they are created. For example, a revocable trust allows you to control all assets held in the trust and make changes while you are still alive. This can include adding or deleting assets, selling property, changing recipients, and adapting to changing life circumstances. You can work with your estate planning attorney to revoke the trust, if necessary.
Meanwhile, irrevocable trusts can’t be modified, amended, or terminated in any way once signed. Rather than you controlling the trust, you appoint someone else to be in control of the trust — even while you are still alive.
Additional differences between revocable trusts and irrevocable trusts
Revocable trust:
- Your property and assets are available for use as your needs change.
- If you are incapacitated, the person who takes over for you can do so without court involvement.
- There is no court involvement when passing assets to your beneficiaries upon death.
Irrevocable trust:
- Assets are protected from certain long-term care expenses, lawsuits, and creditors.
- There are tax benefits associated with an irrevocable trust.
- You can build and maintain wealth for future generations.
Why Having a Trust is Important?
A trust is a fiduciary arrangement designed to let you decide exactly how you want your assets distributed and then transferred to your chosen beneficiaries. Unlike a will that only takes effect when you die, a trust can be created and managed during your lifetime. This is huge in that it allows you the ability to account for disability and incapacitation — not just death.
Granted, the intricacies of a trust are a bit more complicated than a will, but the biggest reason to consider one is specificity. Simply put, you can get very creative when it comes to what happens next.
At the end of the day, everyone’s circumstances are different, and whether or not revocable trusts and irrevocable trusts are the right instrument for your unique situation depends on a variety of factors. Either way, the odds are very high that proper estate planning for your unique needs could involve much more than writing a will.
We help you put together an estate plan that goes beyond the will with a trust, health care directives, powers of attorney, and various other documents that, when working together, cover all of your bases now and into the future. Our attorneys will help you create legal instruments to distribute your assets according to your wishes, nominate a guardian for minor children, minimize family disputes, avoid probate and estate administration, and plan for incapacity.
