Everyone has that one chore that always falls to the bottom of the to do list. It’s usually cleaning the gutters or washing windows. All too often, people wrongly lump estate planning into the “chore” category, pushing it to the bottom of the priority list. When the time comes to get serious about estate planning, people often feel that it is too much information at once.
To avoid such a steep learning curve, it is important to absorb information over time. Here is an overview of the difference between revocable and irrevocable trusts.
Would a revocable or irrevocable trust work for you?
A trust is a commonly used estate planning tool that predetermines how, and when, assets are distributed. Depending on the circumstances in your life, one of these might work well for you.
Revocable/Living Trust: A revocable trust is also known as a revocable living trust or simply, a living trust.The owner of a revocable trust can alter the plan whenever they choose. The owner of a living trust is also able to use the account while they are alive, unlike a will.
Irrevocable Trust: An irrevocable trust, also known as an irrevocable living trust, cannot be altered. In exchange for giving up rights to alter the plan, the owner of an irrevocable trust gains the benefit of not having those assets count against them when it comes time to apply for certain benefits.
Proper estate planning is highly customized. While it is possible that one of these options is perfect for you, there are so many options available.