Revocable Living Trust Or Irrevocable Trust: Which One Is Right For You?

January 24, 2023

You’ve probably heard you need a trust to keep your family out of court and, hopefully, out of conflict in the event of your death or incapacity. And, if you haven’t, you are hearing it now. If you own any “probatable” assets in your name at the time of your incapacity or death, your family must go to court to access them. (If you aren’t sure if your assets are “probatable,” contact us to discuss your particular assets.)

But you may need clarification about whether you need a revocable living trust or an irrevocable trust. More and more, we are seeing people ask for an irrevocable trust, and so this article is designed to help you learn the difference and then get into a more informed conversation about the right kind of trust for you and your loved ones.

What Exactly is a Trust?

A trust is an “agreement” between the grantor of the trust (that’s you) with a trustee (someone named by you) to hold title to your assets for the benefit of your beneficiaries (whoever you name). When we break it down in its simplest form, it’s that straightforward. It’s an agreement.

Now, the terms of that “agreement,” called a “trust agreement,” can vary significantly, and that’s where we can work with you to clarify the terms you want between yourself and the trustee for the benefit of the people you name as beneficiaries.

Revocable living trust

With a revocable living trust (RLT), during your lifetime, you will be the “grantor,” the “trustee,” and the “beneficiary.” So, for all intents and purposes under the law, nothing really changes when you retitle your assets in the name of your RLT, as long as you are living and have capacity (meaning you can make decisions for yourself).

With an RLT, if you become incapacitated or in the event of your death, the trust becomes “irrevocable,” and the person or persons you’ve named as successor trustee steps in to control the assets held in the name of the trust for the benefit of the beneficiaries named in the trust. If you are still living but incapacitated, you would still be the beneficiary of your trust; if you have died, then your named heirs would be the beneficiaries. At that point, the trust may distribute “outright” to your beneficiaries or be held in continuing trust – protected from creditors, future divorces, future lawsuits, and even estate taxes – if your trust terms provide for continuing protection.

You could indicate in the trust agreement that you want your beneficiaries to “control the trust” but that you want the trustee to continue to hold title to the assets, thereby protecting the assets, while giving the beneficiaries nearly full control and use of the assets. This is a bit tricky, so don’t try it without support. But, if you want to provide this kind of benefit and protection to the people you love, be sure to talk with us about building a “Lifetime Asset Protection Trust” into your plan. It’s highly worth it if you’ll pass on anything more than what your children will immediately spend upon your death.

We support you in making these decisions in our Life & Legacy Planning Session process before ever drafting a single legal document for you. But before we talk about that, let’s clarify what an irrevocable trust is and where it might fit into your plan.

irrevocable trust

An irrevocable trust is the same as a revocable trust in that it is an agreement between a grantor and a trustee to hold property for a beneficiary. However, if the trust agreement is irrevocable, or once it becomes irrevocable, it cannot be changed. There are some exceptions to this, but for the most part, this is the case. If you put your assets into an irrevocable trust, you cannot then take them out of the trust and return them to yourself because the gift to the trustee to hold the assets for the beneficiary is irrevocable.

An irrevocable trust can remove assets from your name and protect them from future lawsuits or future growth in your estate, which removes them from your estate for estate tax purposes. We will recommend irrevocable trusts when we are preparing your estate for the potentiality that you may need long-term nursing care that you would like covered by Medicaid (Medi-Cal) without decimating your family’s inheritance, or on the other end of the spectrum, if you have an estate that could be subject to the estate tax or that could be at significant risk of lawsuits.

When you meet with us for a Life & Legacy Planning Session, we’ll look at your assets, family dynamics, personal desires, and how the law will apply to all of it. Then, together, we will decide on the right plan for you – whether to include a trust or not, whether that trust should be revocable or not, and if it is revocable, when it should become irrevocable, and how long it should last for the people you love.

Never choose a type of trust without working with a lawyer who understands you, your family, your assets, and your goals. Never use a life insurance professional or financial advisor to choose the type of trust or draft your trust for you. Too many variables could leave your loved ones with a big mess. We’ll guide you to make the right decisions during life and be there for your family when you can’t be. And we’ll integrate the proper insurance, financial, and tax professionals into your planning at the right time to ensure everything we create works for you and the people you love.

When you meet with us, your Personal Family Lawyer®, we will learn about you, your family dynamics, your assets and your risks and liabilities, needs and desires to support you in the empowering decision-making process of creating an estate plan that works for you and the people you love. Contact us today to get started.


This article is a service of the Law Office of Debra M. Garcia, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own, separate from this educational material.

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