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How do irrevocable and revocable trusts differ?

On Behalf of | Aug 20, 2020 | Trusts |

Some people choose to leave the assets they have for their loved ones in trusts. This makes it easier to pass them along. It’s a more private option than going through the probate court with a will. Once you start to go through the types of trusts that you might use, you’ll find that there are two very important distinctions with them. Trusts are classified as either irrevocable or revocable.

The primary difference between these is that you can change the terms for a revocable trust. You can also cancel it completely if needed. An irrevocable trust can’t be changed once it’s established.

While you might think that a revocable trust is the one that’s best for your needs, you need to think about another point. If you use a revocable trust, it can claimed by creditors since you control the contents of the trust. Irrevocable trusts can’t be claimed by creditors since the contents are officially the trust’s, and you don’t control them.

There are many different trusts that fall under each of those umbrellas. In order to choose the ones that meet your needs, you have to think about the purpose of the trust and who is going to benefit from it. Certain types of trusts have specific purposes. For example, a special needs trust helps you support a loved one who counts on asset-based programs.

You should discuss your wishes and the specific points of concern with your attorney. You can learn more about what types of trusts might be beneficial for your situation, so your estate can have the biggest impact on your loved ones when you pass away.

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