Revocable v. Irrevocable Trusts: What Is the difference?


What Is a Trust?

Trusts are among the many tools that can be used in planning the management of your estate.  The two main categories of trusts that are used are revocable and irrevocable trusts. This article will explain some of the differences between these two types of trusts.  

Requirements for Creating a Trust

Before getting into the differences, it is useful to understand why a trust may be used in an estate plan.  In order for a trust to be valid, the person creating the trust must be legally able to create the trust. This means that they have to be at least 18 years old and have the mental capacity required by law.  The person creating the trust must also intend to create a trust and designate a beneficiary to the trust. A trust can be created orally, but for estate planning purposes, trusts are generally created by a written document.  Because the implications of a trust on your estate or even your current state of property are important, it is highly recommended that you seek the help of an attorney to draft a trust.  

The person who creates the trust is often called the grantor, the settlor, or the trustor.  The individual or organization who is to receive the property is called the beneficiary. In order for a trust to be valid, the grantor must “transfer” property into the trust.  The transfer may include deeding a property to the trust or changing the information on an account so that the property is owned by the trust. The person who is responsible for managing the assets in the trust is called the trustee. 


Trusts are beneficial in estate planning because they may help the family avoid probate and are private.  When a Will is probated, it becomes public record. When a Trust is used to distribute property, the beneficiaries may be able to obtain a copy of the Trust but it is not public record.  Therefore, many individuals choose to use a Trust for privacy purposes. To be clear, a Trust is a legal entity created by the Trust Agreement.  

Revocable Trusts

Revocable Trusts are often referred to as a Revocable Inter Vivos Trust or Revocable Living Trust.  The first main difference between the two types of trusts is that revocable trusts can be changed during the life of the grantor.  Like a Will, this type of trust will allow the grantor to amend, add, or remove beneficiaries or property from the trust.  

As previously mentioned, for a trust to be valid it must be properly funded, which means that the property must be transferred into the trust.  Because a Revocable Trust can be amended after the initial creation, most estate plans that include a Revocable Trust also incorporate a Pour Over Will.  The Pour Over Will directs that all or certain property be transferred into the Revocable Trust when the grantor passes away. This method ensures that the grantor retains use of all the property and assets during their life but the property is then able to fund the trust and pass to beneficiaries without the need for probate.  Another reason to use a Pour Over Will is that the grantor may not have access to the property to fund the Trust. One example of this is a life insurance policy. The funds from that policy will not be released until the grantor passes away. In that scenario, the Pour Over Will could provide that the funds of the Life Insurance Policy “Pour Over” and fund the Trust. 

Many individuals chose to use a Revocable Trust to provide for their children or grandchildren after they have passed away.  Especially when the individual who is planning their estate has young children, they will create a Revocable Trust to fund the child’s education and living expenses in case something happens to the parents.  The grantor is then able to amend the Revocable Trust later when that provision would not be necessary but they still want to provide property to their children or grandchildren.  

Irrevocable Trusts

As the name suggests, an Irrevocable Trust, once funded cannot be changed.  Unlike a revocable trust, once the property is transferred into the Irrevocable Trust, the grantor no longer has possession of that property.  

Because transferred property is legally out of the possession of the grantor, Irrevocable Trusts are often used to transfer assets so that the grantor may receive aid from the government later in life, such as Medicaid.  

Another way that Irrevocable Trusts are useful tools for estate planning is that the trust can be used for asset protection.  Generally, an estate is subject to claims made by creditors. Irrevocable Trusts take the property out of the reach of the grantor and therefore out of the reach of creditors as well.  There are certain situations where creditors may be able to reach the property in the Irrevocable Trust, such as when the trust is created to avoid paying a judgment. 

Whether you should have an Irrevocable or Revocable Trust really depends on the property you have and how you want that property distributed.  

If you are interested in learning more about which trust would be best for your Estate Plan we are happy to assist you.  You may contact our team at (305) 456-3255.  

Please note: The information provided in this article is solely for informative purposes.  This article is not intended as legal advice. A trust might not be the right option for everyone. We highly recommend speaking to an experienced Estate Planning Attorney to help you decide the right option for you and to draft your documents.

Author Bio

Justin Stivers is the founder and managing attorney of Stivers Law, an estate planning firm specializing in wills, probate, trust administration, and financial risk management services. Justin’s approach goes beyond just creating legal documents. From aligning investments with estate plans to ensuring comprehensive insurance coverage, he safeguards a client’s legacy from unforeseen circumstances. His commitment extends beyond individual transactions, fostering lifelong partnerships to provide ongoing support and guidance.

With an impressive track record, Justin is licensed by the Florida and the Tennessee State Bars. His professional portfolio boasts Series 65 registration as a Registered Investment Advisor, the Wealth Management Specialist™ designation, and a 2-15 License for Health, Life, and Annuities. His dedication to excellence has earned him positions like Board Member of the Estate Planning Council of Greater Miami, Business Eagle Member of the Florida Justice Association, and active membership in esteemed organizations like the American Academy of Estate Planning Attorneys.

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