How to choose between irrevocable and revocable trusts

| Apr 2, 2021 | Estate Planning

If you own property in the state of Missouri, it may be in your best interest to place it in a trust. In most cases, you’ll want to put those assets into a revocable living trust. However, there may be situations in which an irrevocable trust may do a better job of helping you accomplish your estate planning goals.

Why would you want to create a revocable living trust?

A revocable trust may be your best option if you want to retain control of your assets after taking them out of your estate. Typically, you will name yourself as the trustee, which means that you get to determine how trust assets are managed. If necessary, you have the power to revoke the document at any time.

Why would you want to create an irrevocable trust?

Although it’s harder to change the terms of this type of document, it is also harder for creditors or other parties to seize assets within it. This is because you effectively lose control of anything that is owned by the trust itself. In almost all cases, you are not allowed to name yourself as the trustee. However, it may be possible to put language in the document that allows you to receive a portion of any income generated by trust assets.

Living trusts cannot be changed after you die

A living trust effectively becomes an irrevocable trust the day that you die. The only way to transfer assets out of your estate after this happens is through the use of a pour-over will that was created during your lifetime. An estate planning attorney may be able to help you create such a document.

If you are looking to exercise greater control of your assets, it may be a good idea to create a trust. An attorney may be able to help you with the process of drafting a document that conforms with state law. An attorney may also be able to review any estate plan documents that you have already created.

Archives

Categories