Irrevocable Trusts vs. Revocable Trusts
When it comes to estate planning, there are a number of different tools and strategies that can be used to achieve your goals. Two of the most common tools are irrevocable trusts and revocable trusts.
What is an irrevocable trust?
An irrevocable trust is a trust that cannot be changed or revoked once it is created. This means that once you transfer assets to an irrevocable trust, you no longer have any control over them.
What is a revocable trust?
A revocable trust is a trust that can be changed or revoked at any time by the person who created it. This means that you can change the beneficiaries, the terms of the trust, or even terminate the trust altogether at any time.
So, which type of trust is right for you?
The answer to this question depends on your individual circumstances and goals. If you want to have complete control over your assets, then a revocable trust may be the best option for you. However, if you are looking for a way to reduce your estate taxes or protect your assets from creditors, then an irrevocable trust may be a better option.
Here is a table comparing the two types of trusts:
| Feature | Irrevocable Trust | Revocable Trust |
|---|---|---|
| Can be changed or revoked | No | Yes |
| Benefits | Can reduce estate taxes, protect assets from creditors | Gives you complete control over your assets |
| Drawbacks | Less flexible, can be more expensive to set up | May not be as effective at reducing estate taxes or protecting assets from creditors |
Ultimately, the best way to decide which type of trust is right for you is to consult with an estate planning attorney. An attorney can help you to understand your options and choose the trust that is best for your individual needs.