Bryan Living Trust Attorney Discusses the Differences between Revocable and Irrevocable Trusts
A trust is a legal instrument which removes assets from ownership by the settlor, and thereby out of the estate and will. Both revocable and irrevocable trusts facilitate the distribution of assets after the death of the settlor because a trust does not go through probate. But there are significant differences between revocable and irrevocable trusts. A Bryan living trust attorney can help you ascertain which, if either, trust is appropriate to your needs.
Revocable trusts are used mainly for the fact that the settlor retains a degree of control; by creating the trust, he can continue to add to the trust, and choose to revoke it as well. The trust is very difficult to revoke once the settlor passes, however.
A Bryan living trust attorney will caution that the revocable trust provides very little protection of assets. If someone decides to sue you, they can go after the assets in the trust. Moreover, because you retain some control over the trust, the assets within are not safeguarded against estate taxes or income tax.
Irrevocable trusts provide the same bypass of probate as the revocable trust, as well as protection of its assets. The term “irrevocable” means that as the settlor, you can't revoke the trust. Such is not the case with a revocable trust, which can be revoked at any time. It is possible to revoke the trust, but only if each beneficiary provides permission to do so.
Despite the fact that you lose control of the assets with an irrevocable trust, the trustee you designate is bound to abiding by the provisions of the trust in making appropriate decisions for the welfare of the beneficiaries. Moreover, because you relinquish control, the assets in the trust are thereby protected from creditors, lawsuits, and estate taxes.
Whether you decide upon an irrevocable or revocable trust, such a tool can help ensure that assets are placed in the hands of survivors quickly after your death.
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