Living Trust vs. Irrevocable Trust: What You Should Know
It’s important to understand that you can never take a one size fits all approach to estate planning. This is one of the leading reasons why it can be dangerous to use estate planning software such as LegalZoom. The legalese and nuances associated with the documents associated with estate planning are confusing and overwhelming at times. For example, would you know the difference between a living trust and an irrevocable trust unless you had the guidance of an estate planning attorney? Therefore, it’s imperative that you partner with an estate planning team who can provide you with the answers to the questions that you need to know so that you can develop an estate plan that meets your needs.
Does a Trust Enhance Your Estate Plan?
Depending on your situation, you may find that a trust can enhance the goals that you have for your estate plan. There are many things that need to be considered when it comes to this type of strategy. Your net worth, the way that you’re leaving your assets and the beneficiaries of your estate are all details that need to be kept in mind when it comes to whether or not a living trust or an irrevocable trust may be right for you.
Keep in mind that a trust is not the only document that will be part of your estate plan. In order for you to receive the full benefit of an estate plan, it’s critical that you also develop a Last Will & Testament, Powers of Attorney and a Living Will. During your consultation with one of our estate planning attorneys, we will walk you through the importance of these documents and how they impact your estate plan.
What is a Living Trust?
A living trust is just that, it’s a trust that a person puts together and has power over during the time that they are living. Once you set up and fund the trust, you are considered to be the Grantor of the trust. As Grantor of a living trust, you have control over the trust. This means that you can add or remove money from the trust and also modify the terms of the trust at any given point during your lifetime. Only when you pass away does the trust become irrevocable and the terms of the trust cannot be changed.
What is an Irrevocable Trust?
Once an irrevocable trust is established and funded, the Grantor of the trust will not be able to make any changes to the terms of the trust. Additionally, once money is placed into trust, the Grantor will not be able to directly remove these assets. Therefore, it’s critical that you have a very specific and fool proof plan when it comes to funding and managing an irrevocable trust. An individual can also develop an irrevocable trust as part of their Last Will & Testament in the form of a testamentary trust.
Allow Our Estate Planning Team Help You Develop a Strategy
Our team understands that each of our clients have their own personal needs and goals when it comes to their estate plan. We take the time to get to know you so that we can help you to determine the best strategy for you. If you would like to learn more about the differences between a living trust or an irrevocable trust or whether or not one of these trusts may be a good option for your trust, call Linda Solash-Reed, P.L. at 321-804-2915 or fill out our contact form and we will be in touch to schedule a meeting.