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What is the difference between a revocable trust and an irrevocable trust?

A revocable trust is an agreement made by an individual during his or her lifetime, naming a trustee and beneficiary. Trust assets must be moved to the trust with a change in title of ownership. The trustor has flexibility, though, and can amend or terminate the agreement at any time. A revocable trust does not protect trust assets from the trustor’s creditors.

An irrevocable trust moves trust assets irrevocably into a trust, and the trustor cannot amend or terminate the agreement once made. Some irrevocable trusts are life insurance trusts and testamentary trusts. Irrevocable trust assets are protected from creditors in certain circumstances. Furthermore, a revocable trust can become an irrevocable trust when the trustor or joint trustor dies. At this point, the trust asset is protected from trustor creditors. Both revocable and irrevocable trusts have their uses, each depending on the goal you wish to achieve by establishing the trust. The skilled trusts attorneys of Bjornson Law Offices aid clients in choosing and establishing the right trusts for their financial and estate planning goals.

Will an estate plan allow me to avoid the Montana probate process?

The general answer to this question is: Yes, it can, to an extent. When you devise assets through a Last Will and Testament or leave no will and make no other arrangements for your assets, Montana’s default probate process kicks in. But many people would like to avoid the full probate process, given that involving a probate court and potentially a court-appointed executor can be time consuming and expensive. Since probate proceedings happen in court, probate can also be invasive—publicly airing details of assets a family might not be comfortable sharing. 

Therefore, a central goal of estate planning can be to honor your wishes through other disposition tools. Some estate planning options include trusts; joint tenancy with right of survivorship; Payable-on-Death (POD) bank accounts; and Transfer-on-Death (TOD) securities and deeds. Exercising these options prevents named assets from going through probate and creates a mechanism for making sure an asset goes to whomever you intended. Even if your will must go through the probate process, however, for reasons such as having courts sort through family disputes, careful estate planning can make the process easier on all involved. Bjornson Law Offices will counsel you on your estate planning options and make sure it’s done right.

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