No one's life is precisely the same as another person's. This adage is true for trust as well. There are many different types of trusts, all created for different purposes. This plethora of options can make understanding trusts complicated and confusing, especially if you and a friend or family member have similarly named trusts created for completely different reasons. A recent article for the Long Island Press, "Irrevocable or Revocable: Which Trust Is Right For You?" looks at the two major categories of trust and the benefits to be had from them.
Revocable trusts are the type of trust that can be useful to all most anyone. When funded properly, they help you avoid probate when you pass and direct your assets to the people you want to inherit them. In addition, they can be used for tax planning, marital planning, and many other planning concerns. They are also, as implied by the name, revocable. This means that at any time, you can change the terms of the trust or get rid of the trust if you no longer want it.
Irrevocable trusts, on the other hand, are, as the name implies, irrevocable. While some can be modified under certain situations, not all can. Changing the terms or purpose of an irrevocable trust is difficult at best and impossible at worst. So it is best to be sure of what you want before making and fund one. However, an irrevocable trust can offer many forms of asset protection, including Medicaid Asset Protection.
Speaking with an experienced estate planning attorney about your goals and financial situation can help you determine what is best for you. But remember, Irrevocable vs. Revocable is only the first step in figuring out what type of trust will work for you. Many other components of trusts need to be considered to find what will work best for you.
Reference: Cona, J. (2021). Cona Elder Law. The Long Island Press. Irrevocable or Revocable: Which Trust Is Right For You?. https://www.longislandpress.com/2021/08/06/irrevocable-or-revocable-which-trust-is-right-for-you/