Differences between Revocable and Irrevocable Trusts. It is not simply that one can be revoked, amended and not the other. It is purpose:
Mostly traditional trusts are revocable, and irrevocable trusts are for special purposes.
There are lots of exceptions to this general introduction, but I’ll highlight main points.
- You can revoke or amend it.
- Usually a primary purpose is to pass assets;
- Assets remain in control of grantors (those who started the trust);
- These become irrevocable at death of one or more grantors (trust still operates but mostly cannot be revoked or changed).
- You cannot (mostly) revoke or amend it.
- Primary purpose may be to remove assets –
- from one’s taxable estate (if they believe they will die with more than 11 ½ million in assets; or
- authorities might not count these assets if grantor needs to go into nursing care (there are very particular rules federally and by state for this); or
- in hopes that assets are beyond reach of creditors, since no longer under control of grantor(s);(again, one would need to employ particular language for a good result)
So again, it is about purpose. Mostly traditional trusts are revocable and irrevocable trusts are for special purposes. So ask me, "which do I need?" And the answer depends upon the primary aim of your trust.