If you want to be sure that your assets will be properly and privately distributed, according to Yahoo Finance in “How to Choose Between a Revocable and Irrevocable Trust,” you should speak with an experienced estate planning attorney to make these important decisions. Depending on your situation and the type of trust, you may also gain some tax advantages. And, importantly, Seniors facing the high cost of long-term care may protect their assets with Irrevocable Asset Protection Trusts.
What’s right for you: Irrevocable or Revocable Trust?
First, it is important to think about the amount of control that you need over your assets. This will ultimately help you decided if an Irrevocable or Revocable Trust is right for you (provided one of these is appropriate in your situation).
A Revocable Trust allows you to revoke and rewrite the terms of your Trust. However, an Irrevocable Trust does just the opposite. You—legally called the trustor, grantor, or settlor—create an Irrevocable trust, and then relinquish control to a trustee. There’s no do-over, and you can’t change the terms of the Trust or fire the trustee. And, to make things even more complicated, there are several types of Revocable Trusts, and several types of Irrevocable Trusts. Each type of Trust has several benefits, as well as limitations.
A review of your unique situation and your goals is critical in determining which type of Trust is right for you. Are you concerned about estate taxes? Do you have a Special Needs beneficiary? Perhaps you are elderly and worried about protecting your assets if you need a nursing home. Maybe you recently received an inheritance, and you wish to maintain the inheritance as “separate property”. Do you need Trusts for children who should not receive an outright inheritance when you die? Do you have business interests? Are you are getting forgetful, and wish for an adult child to legally manage your assets and pay your bills? Or, maybe you just want things to be simple and easy for your beneficiaries upon your passing.
When used correctly, Trusts have many different applications and offer great benefits. But taking the first step is important. It’s never too late – until you become ill, incapacitated, or die. With life’s uncertainties, its better to be safe than have your beneficiaries be sorry. Talk with your estate planning attorney to see what your situation warrants and which Trust option is in your best interest.