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 Jones Mungas aid clients in choosing and establishing the right trusts for their financial and estate planning goals.