If you decide to create an estate plan that goes beyond a basic Last Will and Testament, you may encounter Revocable and Irrevocable Trusts. Both types of Trusts are an essential part of Advanced Estate Planning. They each offer different benefits to help you tailor your plan to your needs.

Revocable

A Revocable Living Trust is a Trust that you can change after you have created it. Much like a Will, a Living Trust can be altered to include new beneficiaries and property. You can change your Trust, because property titled in the name of your Trust still remains in your control while you are alive. There are three benefits to using a Revocable Trust in your estate plan.

A Living Trust allows you and your family members more privacy than a Will. During the probate process a Will is made public record, which means anyone can review the contents of your estate.

Your Trust also provides you with a disability plan. Your successor trustee can step in and handle your affairs in the event that you become mentally disabled and cannot make rational decisions.

Living Trusts also offer a way to avoid probate. As long as your Trust is properly funded, property within will not have to endure probate to pass into the names of your beneficiaries. This allows inheritances to pass more easily to your loved ones.

Irrevocable

An Irrevocable Trust is one that cannot be changed after it is created. So, why would you want to put your belongings into such a Trust if you no longer have control? There are two benefits to an Irrevocable Trust that make the loss of control worthwhile.

Items and funds in an Irrevocable Trust no longer belong to you and are not part of your estate when you pass away. An Irrevocable Trust allows you to pass on an inheritance while avoiding estate taxes. Such a Trust also provides asset protection during your lifetime and for your beneficiary’s life until funds are removed.

Tags: Advanced Planning, Asset Protection, Estate Planning, estate tax, trusts