When it comes to estate planning, there are a number of different trust types available to individuals. Two of the most popular trust types are revocable and non-revocable trusts. So what is the difference between these two trusts and which one is right for you? Let’s take a closer look at each type of trust and how it can benefit you.
What is a Revocable Trust?
A revocable trust (sometimes referred to as a living trust) is created while an individual still alive, and can be modified or revoked at any time during their lifetime. The grantor (the person creating the trust) retains control of their assets while they are alive and can decide how they want their assets to be distributed after their death. A revocable trust allows for greater privacy than other estate planning tools, such as wills, because it does not have to go through probate court after the grantor’s death. In addition, having your assets in a revocable trust allows them to pass directly to your beneficiaries upon your death without being subject to taxes or creditor claims.
What is a Non-Revocable Trust?
A non-revocable trust (sometimes referred to as an irrevocable trust) cannot be modified or revoked once it has been created. This type of trust can be used for asset protection from creditors or lawsuits and may also reduce the amount of taxes owed on certain assets by removing them from an individual’s taxable estate. Non-revocable trusts are often used for estate tax planning purposes since they provide greater flexibility than other estate planning options such as wills or joint accounts when it comes to distributing assets upon death.
Understanding the differences between a revocable and non-revocable trust is important when it comes to making decisions about your estate plan. Both types of trusts offer different benefits depending on your situation, so it’s best to speak with an experienced attorney before deciding which type is right for you. Whether you decide on a revocable or non-revocable trust, having one in place will give you peace of mind knowing that your wishes will be carried out after you’re gone.
CONTACT OUR TRUST LAWYERS FOR TRUST REPRESENTATION
For legal representation in trust litigation or trust administration from an experienced trust attorney, contact Business Law Southwest, LLC today. We will be there to ensure your rights are being protected in court.