A Trust: Revocable vs Irrevocable
How can a trust be helpful
A trust can be thought of like a bank that you deposit your money into. Maybe this bank will make money from using your money you deposited. Maybe it is just a safe place to keep your money. Maybe it is a good place to hold your money until someone you love is old enough to take the money and manage it themselves. But instead of a bank we call it a trust and instead of money we can “deposit” nearly any kind of assets into this bank.
What is a revocable trust
A revocable trust is just what it says, it is a trust that can be revoked. This means that after creating and executing the trust, the grantor can still make changes to the trust. The down side to this is that all assets that are put into the trust will still be considered part of the estate of the grantor.
Why make it irrevocable
An Irrevocable is considered the exact opposite of a revocable trust. Where with a revocable trust someone can make changes to the trust, as soon as an irrevocable trust has been executed it cannot be changed. The grantor no longer has the ability to adjust, modify, remove, exchange, add anything to the terms of the trust. All of his or her assets will be in the trust. Some might think why would someone ever do this? There are several reasons that all come down to placing your assets outside of your estate. This will lower the value and amount in your estate and could qualify you for Medicaid, or prevent taxes from being forced upon you.