Choosing the type of trust you need is an important decision, so it helps to have a full understanding of the different type of trusts available. Although there are several categories of trusts, we will be addressing revocable and irrevocable trusts here.
The main thing to remember here is that with a revocable trust, as long as you are alive and have your full mental capacity, you will remain in total control of the trust. This means you can change or adjust any of the terms or even cancel the trust if you so choose. It cannot, however, be a tool for protecting your assets or for tax planning. Here’s what they are good for:
- Avoiding Probate. The only property that can go into probate is property that you own. Property that you have transferred to a living revocable trust can be very useful in avoidance of probate.
- Planning for Incapacity. If you would like to appoint someone to be a trustee in the event you become incapacitated, you can do that through your revocable trust. This would be an enormous relief to your family to not have to go through the court process.
The main thing to remember here is that as it states, an irrevocable trust cannot be changed once it’s legally been put in place. However, it can be designed to be changed once the owner of the trust dies. The main reason people put an irrevocable trust in place is to avoid estate taxes on property they own. If they give up control and ownership of their property, it gets moved to an irrevocable trust and therefore cannot be taxed.
These are just a few of the things you need to know about revocable and irrevocable trusts. Feel free to call us with any other questions about the various trusts that are available to you!
This information is for general use and is not intended to be legal advice. Please call our offices today at 843-903-1212 for a free consultation. We can assist you with your legal needs and guide you in the right course of action.
The Law Office of Dennis J. DiSabato, Jr., LLC
3888 Renee Drive, Suite 201
Myrtle Beach, SC 29579