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What You Need to Know About Revocable vs Irrevocable Trusts: Part One


Trusts are utilized by countless individuals throughout the country as a crucial tool in building their estate plan. There is good reason for utilizing a Trust as a tool in your belt when building your own estate plan. These legal constructs can protect your assets and help ensure that they are distributed according to your expressed wishes.

When you decide to utilize an estate plan, the first step – aside from selecting an experienced estate planning attorney – is to determine what type of Trust you will utilize. Two common types of trusts include the revocable trust, and the irrevocable trust. While these two concepts may sound nearly identical, they operate quite differently. Both sets of trust come with unique features and benefits. It is important that you understand what type of trust you want to work with and which will best serve your interests and goals. This article aims to highlight just a few of the differences between these two trusts to help you make informed decisions when planning your estate.

  1. Different Flexibility and Control Parameters

A key distinction between revocable and irrevocable trusts comes in the level of control the creator will have over the trust moving forward. The term “irrevocable” generally means that it cannot be modified or revoked. You should understand, then, that if you choose to utilize an irrevocable trust, you will forfeit a good measure of control over the assets that you put into that trust. This will come with benefits not found in revocable trusts, so do not let this fact put you off without thoroughly researching and discussing with your attorney the best options for you.

A revocable trust DOES allow the creator to go back and make changes. These changes could be large or small. You might choose to modify the beneficiaries under the trust, even revoke the trust entirely if you so choose. You should be advised that the extra measure of control that the creator has over this trust does come with some compromises that irrevocable trusts do not have to deal with.

  1. Creditor Protection and Asset Protection Considerations

One of the key factors in establishing a trust for most individuals is in order to protect assets and ensure that they work toward the end goals of the creator of the trust.

With this goal in mind, you should understand that revocable trusts do not provide the same type of asset protection as that provided by an irrevocable trust. Irrevocable trusts offer a unique protection in that assets that are placed in an irrevocable trust will no longer be considered part of your personal estate. This offers increased levels of protection for the asset against outside forces such as creditors or tax collectors.

Revocable trusts do not provide this same kind of asset protection. By retaining the level of control of the assets you have in a revocable trust, you forfeit the benefit of the assets no longer being considered part of your estate. Because you retain control of the assets, they are considered part of your estate and they may be more vulnerable to claims from creditors/tax collectors, etc.

Contact Suncoast Civil Law

Building an estate plan is a monumental step in life. Contact the experienced Sarasota wills & probate lawyers at Suncoast Civil Law for any of your estate planning or probate litigation needs.