Planning For Your Family Future

Protect Your Legacy Today!
Schedule

Revocable Living Trust Or Irrevocable Trust: Which One Is Right For You?

January 22, 2023 •  Legacy Law LLC
You’ve probably heard you need a trust to keep your family out of court and maybe out of conflict in the event of your death or incapacity. And, if you haven’t, you are hearing it now. If you own any “probatable” assets in your name at the time of your incapacity or death, your family […]

You’ve probably heard you need a trust to keep your family out of court and maybe out of conflict in the event of your death or incapacity. And, if you haven’t, you are hearing it now. If you own any “probatable” assets in your name at the time of your incapacity or death, your family must go to court to access them. If you aren’t sure if your assets are “probatable” contact us to discuss.

But you may need clarification about whether you need a revocable living or irrevocable trust. More and more, we are seeing people come our way asking for an irrevocable trust, and so this article is designed to help you learn the difference and then get into an “eyes wide open” conversation about the right kind of trust for you and your loved ones. 

What Is A Trust? 

A trust is an agreement between the grantor of the trust (that’s you) with a trustee (someone named by you) to hold title to assets for the benefit of your beneficiaries (whoever you name). When we break it down in its simplest form, it’s that straightforward. It’s an agreement.

Now, the terms of that “agreement,” called a “trust agreement,” can vary significantly, and that’s where we come in as we’ll work with you to clarify the terms that you want between yourself and the trustee for the benefit of the people you name as beneficiaries.

With a revocable living trust (RLT), during your lifetime, you will be the “grantor,” the “trustee,” and the “beneficiary.” So, for all intents and purposes under the law, nothing really happens when you retitle your assets in the name of your RLT, so long as you are living and have the capacity (meaning you can make decisions for yourself).

With an RLT, once you become incapacitated (which is determined as per the instructions in the trust document) or in the event of your death, the trust becomes irrevocable, and the person or persons you’ve named as successor trustee steps in to control the assets held in the name of the trust for the benefit of the beneficiaries named in the trust. If you are still living but incapacitated, you would be the beneficiary still. If you have died, then your named heirs would be the beneficiaries. At that point, the trust may distribute outright to your beneficiaries or be held in continuing trust -- protected from creditors, future divorces, future lawsuits, and even estate taxes (if the trust is drafted properly) -- if your trust terms provide for continuing protection.

You could indicate in the trust agreement that you want your beneficiaries to “control the trust” but that you want the trustee to continue to hold title to the assets, thereby protecting the assets, while giving the beneficiaries nearly full control and use of the assets. This is tricky, so don’t try it at home without support. But, if you want to provide this kind of benefit and protection to the people you love, be sure to talk with us about building a Lifetime Asset Protection Trust into your plan. It’s highly worth it if you’ll pass on anything more than what your children will immediately spend upon your death.

We support you in making these decisions in our Family Wealth Planning Session™ process before ever drafting a single legal document for you. But before we talk about that, let’s clarify what an irrevocable trust is and where it might fit into your plan.

An irrevocable trust is the same as a revocable trust -- an agreement between a grantor and a trustee to hold the property for a beneficiary. Still, if the trust agreement is irrevocable, or once it becomes irrevocable, it cannot be changed. There are some exceptions to this, but for the most part, that is the case. If you put your assets into an irrevocable trust, you cannot then take them out of the trust and return them to yourself because the gift to the trustee to hold the assets for the beneficiary is irrevocable.

An irrevocable trust can remove assets from your name and protect them from future lawsuits or future growth in your estate, which removes them from your estate for estate tax purposes. We will recommend irrevocable trusts when we are preparing your estate for the potentiality that you may need long-term nursing care that you would like covered by Medicaid (or Medi-Cal) without decimating your family’s inheritance, or on the other end of the spectrum, if you have an estate that could be subject to the estate tax or that could be at significant risk of lawsuits.

When you meet with us for a Family Wealth Planning Session™, we’ll look at your assets, family dynamics, personal desires, and how the law will apply to all of it. Then, together, we will decide on the right plan for you -- whether to include a trust or not, whether that trust should be revocable or not, and if it is revocable when it should be irrevocable, and how long it should last for the people you love.

Never Choose A Type Of Trust Without Working With A Lawyer Who Understands you, your family, Your Assets, and Your Goals

Never use a life insurance professional or financial advisor to choose the type of trust or draft your trust for you. Too many variables could leave your family in a big mess. We’ll guide you to make the right decisions during life and be there for your family when you can’t be. And we’ll integrate the proper insurance, financial, and tax professionals into your planning at the right time to ensure everything we create works for you and the people you love. 

When you meet with us, your Personal Family Lawyer®, we will learn about you, your family dynamics, your assets and your risks and liabilities, needs and desires to support you in the empowering decision-making process of creating an estate plan that works for you and the people you love. Contact us today to get started.

This article is a service of Bethany Gilson Casey, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. 

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Speak With an Attorney

Schedule

Schedule Now

Client Success Stories

Bethany was amazing very helpful and kind. Made me feel very comfortable in a rough situation. Made sure I got what I wanted set up and took care of me and my family. Awesome job. I recommend her 100%.
Cari Covolo
December 22, 2021.
Bethany was professional, very knowledgeable, personable, and easy to work with. She made the daunting task of setting up a will easy and seamless.
Amanda Larson
October 21, 2021.
Bethany was great! She explained the details of probate and how it works in detail. Our purpose was to protect our children in the untimely event of both of us passing at the same time. The estate planning put our minds at ease. She encourages us to follow up with her periodically and make sure everything is still in order. This impressed us, she cares.
Dale Arey
October 13, 2021.
Bethany was great to work with! We highly recommend Legacy Law. Bethany was always well prepared and made things feel simple and easy to understand. She made a process that can feel overwhelming feel simple and manageable to do. She is very organized, professional and caring. She did an excellent job in preparing all the estate documents and helping us create a living trust!
Carey Larson
October 8, 2021.
Bethany was really helpful in getting our trust set in place; she answered all our questions thoroughly and we have peace of mind that our estate and affairs are in order. Highly recommend!
Paul Alvey
September 6, 2021.
I was pretty nervous/unsure about needing a will/ trust and decided to explore my options. I found an introductory video on-line from Legacy Law. From there I set up a meeting with Bethany and went in with a boatload of questions. My questions were answered patiently and with great expertise. I never felt pressured and came out feeling reassured and comfortable with my choices/decisions. This was all done professionally and in a very timely manner. To this day, if I have a question all I have to do is give Bethany or Brynn a call. It is without hesitation that I recommend Legacy Law and their services.
Patsy Christensen
August 31, 2021.
Thank you LegacyLaw Estate planning was a breeze with them .
Deborah Doak
August 21, 2021.
Bethany was great! Very professional and personal. She was always able and willing to answer our questions and come up with the best solution for our needs. I highly recommend her for estate planning and to navigate all the legal intricacies related to that.
Jeff Wilson
August 20, 2021.
Bethany was very professional, reasonably priced and very thorough when working with us on our trust. We highly recommend her for very individualized planning and attention to detail.
Robin Schamber
August 9, 2021.
Bethany was very professional and easy to work with. She answered all my questions and helped me put together a good living trust that I feel comfortable with. I would highly recommend her to anyone who is thinking about estate planning.
Steve Boyd
August 3, 2021.
Legacy Law LLC

2620 Commercial Way, Ste. 160
Rock Springs WY 82901

Get Directions
Integrity Marketing Solutions - Estate Planning Marketing
Powered by
crosschevron-down