Revocable vs. Irrevocable Trust

Revocable vs Irrevocable Trust

The most common type of trust is a revocable living trust. The settlor is the person who creates the revocable trust. You need to know that under this trust, the settlor is also the trustee. Once the trust is established, the settlor transfers assets to the trust.

The acting trustee under a revocable trust controls the assets in the trust. Thus, the settler under this trust can still sell those assets if the settlor wants to. The settlor also has the right to amend a revocable trust. For example, a settlor under a revocable trust may wish to drop a beneficiary. A settlor may make changes to their revocable trust for other reasons as well.

An irrevocable trust is much different than a revocable trust. Under an irrevocable trust, the settlor loses the ability to make changes to the trust. For example, the settlor under an irrevocable trust cannot drop a beneficiary.

The settler under an irrevocable trust loses the right to control the assets. Assets under an this trust must be transferred to a person acting as a trustee. The trustee must be someone other than the settlor. The settlor under this trust cannot remove the assets.

The trustee under an irrevocable trust holds legal title to the property. Under an irrevocable trust, the trustee manages the assets. They are managed for the benefit of the named beneficiaries during the settlor’s life. After the trust settler’s death, the trustee distributes them to the beneficiaries.

Two people set up a joint revocable living trust. They are called joint grantors. These trusts are funded with common or separate property. With this trust, the surviving spouse will keep their trust property. They also keep their share of community property.

The Bottom Line

It can be unsettling to think about a time when we or a family member might be unable to make decisions, but careful planning can bring peace of mind and security. Moreover, working with an experienced attorney for the careful and meticulous preparation of a trust ensures your assets are administered as you want them to be and reduces conflict, and eases the burden on those you love.

The dynamic Temecula revocable trust lawyers at Iron Clad Living Trust can help insulate your loved ones from a messy and time-consuming process. A living trust allows those you leave behind the ability to tend to the affairs of your estate without the unwanted involvement of the probate courts and expensive probate lawyers. A living trust is customized to each unique family and individual and can protect your assets, your estate, and your loved ones. Call us today at (951) 587-3737.

Benefits of a Revocable Trust

What is an Irrevocable Trust