If you’re hard at work planning for the future of your estate, you might be trying to decide between a will or a trust and could find yourself at a crossroads regarding whether your trust should be revocable or irrevocable. While each instrument is essentially designed to do the same thing – leave your estate to a party or parties you trust – a couple of differences are inherent within each one. Your Springfield irrevocable trust lawyer can help you determine which might be best for you.
Before you start planning, get to know some of the fundamental differences between a revocable and irrevocable trust, and get a sense of which might be right for you.
What is an Irrevocable Trust? Our Springfield Irrevocable Trust Lawyer Explains
An irrevocable trust is one that the creator of the trust cannot revoke or take back, in whole or in part. It can only be modified or terminated with the permission of the person the trust will benefit. When the estate owner transfers all of their assets into the trust, they remove their rights to access or ownership over its contents. As such, when you create an irrevocable trust, it is not considered part of your estate for tax or legal purposes.
While it may seem a little terrifying to move your assets into a trust you can’t touch, the point of an irrevocable trust is to ensure that your estate and assets are not considered ‘yours’ for tax purposes. It additionally removes these assets from the holder’s personal liability.
What is a Revocable Trust?
Also known as a living trust, a revocable trust is in effect while you’re alive, but you can access its contents at any time. You can change or modify the terms of the trust to your liking. The trust will also be distributed at your preference, and usually without any court intervention. Because this type of trust is still considered to be part of your estate, it will be considered as such for tax and legal purposes. You maintain control of these assets while you’re alive and can use them as you wish without the beneficiary’s permission or knowledge.
Your Springfield Irrevocable Trust Lawyer Will Help You Decide Which is Right for You
A revocable trust will be a better choice for you if you wish to avoid probate court while maintaining maximum control over your assets. However, an irrevocable trust might be better for you if you wish to reduce your estate tax – meaning that you will minimize the hefty estate tax percentage that tends to apply upon your passing. So, anything you put into that irrevocable trust will be entirely for your beneficiary to keep! An irrevocable trust will also keep your assets from any personal liabilities; however, it will allow you to keep your wealth in your family if you pass it onto a spouse or your children.
Eager to begin planning for the future? An experienced Springfield irrevocable trust lawyer at our firm can help. We specialize in counseling high net worth families in preparing their estate plans. Contact us today.