If you are considering adding a Trust to your estate plan, you will have the opportunity to choose between Revocable and Irrevocable. You may even find that both types of Trust compliment your estate needs.
A Revocable Trust, often called a Revocable Living Trust, allows you to fund property into the name of your Trust while still remaining in control of those assets. With a Revocable Trust, you will have complete control until your death or disability. You will also have the ability to change the beneficiaries or property within your Trust at anytime.
A Living Trust allows you to create a disability plan. Whomever you name as successor trustee will have the capacity to take care of your Trust during a time when you are deemed mentally incapacitated.
An Irrevocable Trust cannot be changed after it is created. This is because assets in this type of Trust do not belong to you or your beneficiary. This keeps them safe from creditor judgments and lawsuits that you or your loved ones may encounter. This protection will continue as long as assets remain in the Trust.
Because you do not own Irrevocable Trust assets, these items are not included in your estate tax calculation after your death. If you feel your estate may owe taxes, you can use Irrevocable Trusts to pass on inheritances while lowering your taxable assets.
Irrevocable and Revocable Trusts offer two shared benefits. Both provide the ability to pass outside of probate. This is because items are titled in the name of your Trust and not in your name. When items are in the name of a decedent, they must endure probate.
Because these two Trusts can pass on inheritances outside of probate, they offer you and your family privacy. During probate, a Will and all other probate documents become public record. Anyone can review the contents of a Will-based estate. With Trusts, your assets and beneficiaries remain private.