If you are confused about the difference between a revocable and irrevocable trust, you are not alone. In fact, they do have some similarities. For example, both revocable and irrevocable trusts allow the settlor (person putting assets in the trust) to distribute or transfer their property as provided for in the trust document.
The main difference between the two trusts is related to the settlor’s control over the trust assets. The settlor of an irrevocable trust generally gives up a large degree of control over the property that he or she transfers into the trust. In addition, the settlor may often derive tax benefits from creating an irrevocable trust.
On the other hand, a revocable trust can be canceled (revoked) at any time. However, the revocable trust often has less significant tax benefits. You may wish to create a revocable trust, regardless of any decrease in tax benefits, if you desire to maintain a large degree of control over the trust property. It is important to work with an experienced estate planning attorney to create an estate plan that fits your lifestyle and goals.
For more information about trusts, please contact us. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.