If the privacy of your heirs and your estate, avoiding probate or limiting estate taxes are a concern for you when preparing your estate plan, you may consider establishing a living trust. However, there are different types of trusts available for people in Ohio and elsewhere, and some options may be better suited for certain circumstances than others. Therefore, you may find it helpful to understand the difference between revocable and irrevocable trusts.
Through a revocable trust, you transfer ownership of specified assets and property to the trust. As the trust maker, you serve as the initial trustee, and thus, retain control of the property. In the terms of the trust, you may name a beneficiary or trustee to take over control after your passing. According to CNN.com, you are allowed to rescind a revocable trust altogether or change its terms at any time. This may be useful, for example, if you establish a trust for a beneficiary who is later involved in an accident that leaves him or her incapacitated. Rather than leaving him or her as the named trustee, you may instead choose to modify the terms to provide for his or her care and leave the administration of the trust to another trusted family member or friend.
Irrevocable trusts, on the other hand, permanently transfer specified property to the trust. Since the assets no longer belong to you, you have no control over them. Further, you are not able to make any changes to the trust terms, add or remove property from the trust, or revoke the trust without approval from the beneficiary. This is beneficial, for example, in the event you owe certain debts or work in a field that puts you at risk for lawsuits. Once ownership of the specified assets is transferred to the trust, creditors and judgment holders cannot reach them, thus protecting your estate for your intended beneficiaries.
This post contains information that is intended for general purposes only and should not be taken for legal advice.