A living trust is a helpful legal document that can be used to manage your assets during your lifetime, and it can be either revocable or irrevocable. Because there are key differences between the two types of trusts, anyone considering utilizing a living trust as an estate-planning tool should first develop a better understanding the two kinds.
A revocable trust is ideal for someone who wishes to maintain control over their property during their lifetime. It allows the creator to act as trustee and manage the trust however they see fit. They are able to freely add or remove beneficiaries, buy or sell assets from the trust, and can even dissolve the trust at any time during their lifetime. Then when the creator dies the trust automatically becomes irrevocable because there is no one left to amend or revoke it.
An irrevocable trust, on the other hand, is ideal for someone looking to save money on taxes or protect their assets from creditors. However, unlike a revokable trust, the creator of an irrevocable trust cannot act as trustee. Instead, they must relinquish control of the trust to a trustee who manages the trust on their behalf. The creator will also be unable to take any property or money back out of the trust once it has been created. The advantage is that property will be taxed differently and more protected from the creditors.
Both types of living trusts are beneficial estate planning tools because allow the creator to avoid the probate of any property held in the trust. An experienced attorney will be able to help you further understand the advantages of each type of trust, as well as create on estate plan that suits your personal needs.