A trust is a legal arrangement that enables a third party to hold assets on behalf of the beneficiary. These trusts can be arranged in various ways, allowing the trust creator to provide specific details on when and how the assets will be passed to the beneficiaries. In Florida, there are two main types of trusts: revocable and irrevocable.
The Major Differences Between a Revocable and Irrevocable Trust
A revocable trust also referred to as a living trust, can be revoked or modified by the individual creating the trust (the grantor) at any point in time. As a result, the grantor keeps control over the assets and can change the terms of the trust, including adding or removing assets or getting rid of the trust. However, because the assets in this trust continue to be owned by the grantor, they are not protected from lawsuits or creditors.
In comparison, an irrevocable trust cannot be revoked or changed once created. Instead, once the assets are placed in this trust, the trust creator loses control over them. This means that these assets can protected from lawsuits and creditors.
Which Trust Is Right for You?
While both trusts provide numerous benefits, it is crucial to analyze the situation you are in before picking the trust you want to create. For instance, a revocable trust may be a good option if:
- You want to avoid the probate process and transfer your assets to your loved ones.
- You believe that your wishes regarding your assets will change over time.
- You want to be able to use and control your assets without any restrictions.
On the other hand, many people consider an irrevocable trust when:
- They are comfortable giving up control of their assets after the trust is established.
- They want to protect assets from future creditors.
- They want to minimize the burden of estate taxes.
If you are considering setting up a trust in Florida and want more information about the different types, consider speaking with an experienced Florida estate planning attorney. These legal professionals can provide you with further details about these plans and help you determine which option is best for you.
Does a Revocable Trust Become Irrevocable?
In general, a revocable trust will become irrevocable upon the trust creator’s death. At this point, the trust will be locked, and the trust’s beneficiaries will usually not be able to change the terms of the trust.
Reach Out To The CYA Law Firm To Find Out Which Trust Is Right for You
There are numerous reasons for setting up a trust, such as lowering estate taxes, safeguarding assets, and avoiding probate. However, the specific type of trust that best suits your needs will largely depend on your objectives.
For further information about revocable and irrevocable trusts and to determine which one is the most suitable for you, contact The CYA Law Firm today to schedule a free consultation with Attorney Adalbert “AL” Martinez and get the answers you need.