A trust can be a useful inclusion in your estate plan. For example, it can help your assets skip probate and reach the beneficiaries sooner. The main distinction in trusts is whether they are revocable or irrevocable.
Understanding the key differences can help you narrow down the type that could most benefit you. Or you might even choose to use both for different assets.
You can rarely change an irrevocable trust
If you are sure that you will never want to alter the trust, you could opt for an irrevocable one. Otherwise, a revocable one may be safer as irrevocable trusts generally cannot be changed — except with the say-so of every beneficiary (or, perhaps in some very special cases, with the say-so of a court). Imagine how frustrating it would be to know you have money sitting there, which you have a desperate need for – such as a medical emergency or a fantastic business opportunity, only to realize you cannot touch it because you made the trust irrevocable.
Irrevocable trusts offer more protection for your assets
The reason many people plump for an irrevocable trust is to protect the assets within those trusts from creditors and legal judgments against them. Those assets should remain untouchable, whereas they may be able to be taken when in a revocable trust. This applies both when you are alive and when you die.
Moving assets into a trust, especially an irrevocable one, is a big decision. You may want legal guidance to learn more so you can determine whether a trust of any type is truly what you need and if so how best to draw up the rules for that trust. It might you are better off using some other estate planning tool altogether.
