When planning for your estate, trusts can be a useful tool to ensure your assets are distributed as you wish. Two common types of trusts are irrevocable trusts and revocable trusts. But what exactly is the difference between the two, and which one is the best fit for your needs?
Irrevocable Trusts
An irrevocable trust is a type of trust that cannot be changed or revoked once it is established. This means that once assets are put into the trust, they are no longer considered your property. Irrevocable trusts are often used for estate planning purposes as they can offer protection from creditors, reduce estate taxes, and ensure that assets are distributed as intended.
Revocable Trusts
A revocable trust, on the other hand, can be changed or revoked at any time during the grantor's lifetime. This type of trust is often used for more flexibility in estate planning and allows for changes to be made as circumstances change. Assets in a revocable trust are still considered the grantor's property and are subject to estate taxes.
Which One is Right for You?
Deciding between an irrevocable and revocable trust ultimately depends on your individual circumstances and goals. If you want to protect your assets from creditors, reduce estate taxes, and ensure that your assets are distributed as intended, an irrevocable trust may be the best option. However, if you want flexibility and the ability to make changes as your circumstances change, a revocable trust may be the better choice.
It is important to consult with an experienced estate planning attorney to determine which type of trust is best for your specific situation. They can help you navigate the complexities of estate planning and ensure that your assets are distributed according to your wishes.
In Conclusion
Bottom line, understanding the difference between irrevocable and revocable trusts is essential when planning for your estate. By working with a qualified estate planning attorney, you can determine which type of trust is best for your needs and ensure that your assets are protected and distributed as intended.
If you need assistance with establishing a trust or have questions about estate planning, contact Crain & Wooley today. Our experienced attorneys can provide guidance and support throughout the estate planning process, including irrevocable trusts, revocable trusts, and more.