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Revocable vs. Irrevocable trust: which one is right for you?

Including a trust in your estate plan comes with multiple benefits. It saves time, reduces estate taxes and ensures that your assets are distributed according to your wishes. Most importantly, a trust gives you control over your assets even after your passing.

If you are considering including a trust in your estate plan, you may be wondering about the right type of trust for your estate. Most often, you will need to choose between a revocable and irrevocable living trust.

Understanding a revocable trust

If you are looking for a trust that will give you greater control over your assets, then you are better off setting up a revocable trust. This type of trust allows you to modify and even cancel the entire trust if you wish to do so. Additionally, a revocable trust offers the following benefits:

  • Add and remove assets from the trust
  • Change beneficiaries
  • Revise the trust instruments
  • Sell off the trust assets

A revocable trust would make perfect sense if you are looking for more control and flexibility over your assets’ distributions.

Understanding irrevocable trusts

Unlike a revocable trust, modifying an irrevocable trust can be quite difficult. Some of the aspects you may not change in an irrevocable trust include:

  • The initial instructions on the trust instrument
  • The trust’s beneficiaries
  • Ability to remove assets from the trust

An irrevocable trust is ideal for grantors who are looking for more tax benefits.

A trust is one of the most important estate planning tools you can ever create. Find out how you can establish a trust document that will reflect your wishes.

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