A revocable trust… is also sometimes called a “living trust.” The idea is that you set up the trust according to what you need today, but you can always change it due to circumstances changing in your life. And that’s one of the things that my clients really like about revocable trusts, is the fact that it does have a lot of flexibility. And if there are minor changes, for example, if you wanted to change the ages at which somebody was receiving their distributions, [it’s] very easy to set those up. If someone that you nominated to be a successor or trustee has either passed away or moved out of the area or for some other reason is no longer a good choice, [it’s] very easy to make those changes.
An irrevocable trust is a little bit different in that the idea behind an irrevocable trust is that you set it up and it’s sort of a “fire and forget” kind of thing. You want to set it up so that you don’t have control perhaps of those assets anymore (and sometimes used as an asset protection device), but not many want to use it because, if you wanted to make your own assets protected from your creditors, you’d have to give them away to this irrevocable trust and have somebody else be the trustee. So you’re not in charge of your own assets anymore, and that’s not a very palatable option for most people. But there are other options where it can be a good idea, and it makes a lot of sense.
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An irrevocable trust is a little bit different in that the idea behind an irrevocable trust is that you set it up and it’s sort of a “fire and forget” kind of thing.
“Irrevocable,” though, doesn’t even mean that it can’t be changed. Just “irrevocable” means that it’s not going to be completely undone. Even if you set up an irrevocable trust, if the law changes, such that something in this irrevocable trust that was a good tax choice when it was written, is no longer a good tax choice, you can have language in the trust that says you can have someone can come in and make changes to the trust (the, you know, sort of the management of the trust) and still have it be a good ongoing trust… you just can’t undo the trust entirely.
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– David Pilcher is an experienced estate planning and probate attorney with Bogin, Munns & Munns, a full service law firm with offices in Orlando, Clermont, Kissimmee, St. Cloud, The Villages, Orange City, Titusville, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida. Mr. Pilcher welcomes questions and comments regarding the above and can be reached at dpilcher@boginmunns.com.
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