Revocable vs. Irrevocable Trusts

The main difference between revocable and irrevocable trusts is the ability to make changes to the trust and the permanence of the trust's terms.

Revocable vs Irrevocable Trust
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Helpful Highlights

  • Revocable = The trust can be changed during your loved one's lifetime.

  • Irrevocable = The trust cannot be changed, modified, or ended after its creation without beneficiary permission or a court order.

  • While it may not seem like it, irrevocable trusts offer several benefits over revocable trusts, making them advantageous in certain estate planning scenarios.

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Revocable and irrevocable trusts are two distinct legal arrangements used in estate planning, each with individualized characteristics and purposes. Revocable trusts offer flexibility and control during your loved one's lifetime, while irrevocable trusts provide certainty, asset protection, and potential tax benefits but require your loved one to relinquish control and ownership of the trust assets permanently.

Revocable trust

A revocable trust, also known as a living trust or inter vivos trust, is a legal arrangement in which your loved one (settlor) transfers ownership of assets into a trust during their lifetime, with themselves typically serving as the initial trustee and beneficiary. Your loved one retains the ability to amend, modify, or revoke the trust at any time while they are alive and competent.

Irrevocable trust

An irrevocable trust is a legal arrangement in which your loved one transfers ownership of assets into a trust, relinquishing control and ownership of the assets permanently. Once established, an irrevocable trust generally cannot be amended, modified, or revoked by your loved one, except under limited circumstances and requires the consent of the beneficiaries or a court order.

To reiterate, the main difference between revocable and irrevocable trusts lies in your loved one's ability to make changes to the trust and the permanence of the trust's terms.

No content in this app, regardless of date, should ever be used as a substitute for any direct legal advice you receive from your lawyer or other qualified legal professionals.

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