When it comes to estate planning, most people have a general idea of what a trust is and what it can do for them and their family. Essentially, having a carefully-crafted trust in place allows for the legal transfer of your property and assets to a trustee, who then manages the property for the trust’s beneficiaries (your family) once you are gone or are no longer able to make key decisions. All of this sounds simple, until you hear terms such as revocable and irrevocable trusts.
Estate planning documents such as wills and trusts can get pretty overwhelming when you don’t deal with them every day. A qualified estate planning attorney at Nelson Law Group PC can help clear up any confusion you have with a simple consultation. In the meantime, we’ve laid out the differences below in plain language.
What’s the difference between revocable and irrevocable trusts?
The first thing to understand is that trusts are either set up as living trusts or testamentary trusts. Living trusts are, you guessed it, established during the trustor’s life. Testamentary trusts don’t take effect until the trustor dies.
If you create a living trust, you can then choose between revocable trusts and irrevocable trusts.
A revocable trust determines who will get your property and can be changed as often as needed during your lifetime. You maintain complete control over any assets in the trust, including being able to end the trust.
An irrevocable trust also determines who gets your property. The key difference is that it cannot be altered or ended once it has been executed. You lose your ability to control what happens moving forward. While this is a big decision for anyone, the advantages are that the assets in an irrevocable trust are protected from long-term care expenses, creditors, and lawsuits. Also, assets in an irrevocable trust aren’t taxable after you die. This is not the case with a revocable trust.
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When it comes to estate planning, you need a trusted estate planning attorney to guide you through each stage and work diligently to achieve a result that will give you peace of mind moving forward. The Nelson Law Group brings nearly two decades of experience in estate planning to each and every case.
Give our knowledgeable staff here at Nelson Law Group, PC a call if you have any further questions regarding this or any other issue. Our staff is always available. Give us a call today! For more information about Brett A Nelson, click here.