Are you giving thought to setting up a trust? Are you wondering about the differences between a revocable and an irrevocable trust?
Each has advantages but your decision will probably rest on the level of control you want or need.
Advantages of the revocable trust
As the name implies, you can revoke this kind of trust or change the terms whenever you like. You have considerable control. This is the kind of trust you can establish to manage your income and assets if you should ever become incapacitated. A doctor’s confirmation of your incapacity might be required, but the trustee you appoint can step in and manage the trust without the need for a formal court order.
Understanding the irrevocable trust
An irrevocable trust is often the preference of those who are very well off financially and who are looking for the tax advantages this kind of trust can provide. Some people establish an irrevocable trust in order to guarantee the continuing support of a disabled loved one or to protect assets if professional liability should arise. Keep in mind that once established, you cannot change or revoke this kind of trust, and you relinquish control.
Remember that once you settle on the type of trust that meets your requirements, you must also select your trustee. Many people choose a close relative or friend, but you could also rely on a trusted legal advisor as your trustee. Setting up your revocable or irrevocable trust will give you peace of mind and you can feel secure in the knowledge that your loved ones will ultimately benefit from the decision you have made.