A revocable trust, also known as a living trust, allows the grantor to modify or dissolve it at any time during their lifetime. It offers flexibility and control over assets, making it a popular choice for estate planning. The grantor retains ownership and control over the assets, meaning they are subject to estate taxes and creditors.
An irrevocable trust cannot be modified or revoked without the consent of the beneficiaries. The grantor relinquishes ownership and control over the assets, providing significant tax benefits and asset protection. These assets are generally not subject to estate taxes and are protected from creditors.
The choice between a revocable and irrevocable trust depends on your financial goals, need for flexibility, and concerns about asset protection. A revocable trust is suitable for those who want ongoing control and the ability to make changes, while an irrevocable trust is ideal for those seeking to reduce tax liabilities and safeguard assets from potential creditors.
Understanding the differences between these trusts is crucial for effective estate planning. Each type of trust offers unique benefits and can help secure your financial future while ensuring your assets are managed and distributed according to your wishes.
Sponsors