One of the biggest differences between a revocable and irrevocable trust is your ability to make changes to the trust once it’s created. The grantor can modify a revocable trust, while an irrevocable trust is not as easily changed.
Both types of trusts can help protect your assets and allow you to leave them to specific beneficiaries. They each include a grantor, or the creator of the trust, beneficiaries who will receive your assets, and a trustee, who manages your fund and distributes the assets.
Understanding the difference between a revocable trust and an irrevocable trust can help you create a better, stronger estate plan for your needs. Let’s look deeper into revocable vs. irrevocable trusts to help determine which option may be the best fit for you and your estate plan.
What’s a revocable trust?
A revocable trust is a living trustthat outlines the assets you want to give a beneficiary and how the assets will be distributed. Revocable trusts often name the grantor as the trustee, allowing for full control of the trust.
What makes revocable trusts so attractive is the ability to make changes to them after they’ve been created. That means you can update your beneficiaries, how much money or which assets are included, and when the contents of your trust will be distributed.
What’s an irrevocable trust?
An irrevocable trust, which can also be a type of living trust, details your assets and how you’d like them to be distributed to your beneficiaries. However, unlike a revocable trust, irrevocable trusts are pretty much set in stone. Some exceptions allow for changes if all the beneficiaries agree to them, but the proposed updates must go through a lengthy approval process, which can include going before a judge.
