Of the many trust options you have, revocable and irrevocable trusts are oftentimes popular for their ability to help families avoid probate proceedings. Both irrevocable and revocable trusts have their advantages.
Read on to learn about the benefits of each:
Revocable trust benefits
A revocable trust gives adults the option to manage property and assets during their life. When you place your assets in a revocable trust, you still have access to them because you own the assets while you are still alive. That means you have the freedom to pull assets from the trust at your own digression If they are needed. For example, if you owe a debt, assets can be ordered liquidated to pay it off. Revocable trusts also allow the owner to change the terms of the trust by removing beneficiaries, designating new ones or altering asset stipulations.
Irrevocable trust benefits
Choosing an irrevocable trust means relinquishing ownership and control of the assets you’ve worked hard to earn. However, these trusts may protect your assets more effectively. An irrevocable trust is a separate entity from you and is therefore not liable for any debt you acquire or damages you cause during your lifetime.
Similarly, because you no longer own the assets you place in your irrevocable trust, their value is not subject to state and federal estate taxes when you die — unlike revocable trusts.
Choosing an irrevocable trust is usually a good idea if your highest priority is ensuring that gifts to your heirs remain intact.
Contact an estate planning lawyer for further advice on which trust may best suited to your needs. An attorney can teach you more about your estate planning options to help ensure that your assets are managed in a way that’s most suitable for you.