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Mar 21, 2024 | Estate Planning, Q&A

What is the difference between revocable and irrevocable trusts?

Man in suit signing legal document representing a revocable trust or irrevocable trust

In the past, we have written Q&As on how to set up your assets to pass efficiently to your heirs as well as hosted a probate avoidance webinar. Choosing whether to transfer any of your assets into trusts is part of this process and may depend on the complexity of your situation. While having a comprehensive will with the proper beneficiary and transfer-on-death (TOD) designations may be enough in certain situations, a trust may be more effective in others. In general, trusts are more effective at avoiding probate and for complex situations where you may desire greater control over how your funds are distributed. For example, if your child were to get divorced, having your assets in a trust could protect them from becoming joint property and split during the divorce proceedings. In other instances, you may want to set conditions on distributions, such as selecting multiple payments over time versus a single large sum.


A trust is a legal arrangement that is created to manage your assets during your lifetime and/or after your passing. As assets are transferred into a trust, a trust must be funded by the grantor once created. In addition, a trustee must be named to manage the assets with beneficiaries listed. While there are many types of trusts, there are two primary trust structures to choose from: revocable and irrevocable.


Revocable trusts and irrevocable trusts are both effective at keeping your assets out of the probate process and off of the public record. The primary difference between the two is that it is extremely difficult to modify the terms of an irrevocable trust once created. Both trust structures have unique pros and cons and choosing which structure is a better fit for your situation can be a challenge.

Revocable Trusts

A revocable trust, or living trust, allows the grantor to maintain ownership of the assets they place into the trust throughout their lifetime. In addition, it allows the grantor to modify or dissolve the trust at any time. One of the benefits of revocable trusts is that they can allow your trustee (or successor trustee if you choose to list yourself as the trustee) access to your assets in the event you become incapacitated. This would allow your trustee to quickly take control of managing your finances when certain requirements are met. Once the grantor passes, revocable trusts often become irrevocable and can no longer be changed.

Irrevocable Trusts

Irrevocable trusts are permanent. Once created, they are challenging to modify. Assets placed into an irrevocable trust are typically no longer considered the grantor’s property. Due to this change in ownership, the assets are better protected from estate tax, creditors, and/or lawsuits. This added layer of protection is the primary reason individuals may choose to move forward with an irrevocable trust. This trust structure is most beneficial to those whose careers may put them at higher risk of lawsuits or those whose estate value is over the federal estate tax exemption amount.


No trust is a one-size-fits-all solution. It is important to work with your wealth management advisor and estate planning attorney to determine if a trust is useful for your situation, and if so, which trust structure better fits your goals. As a general reminder, it is important to periodically revisit any estate planning documents you have created to ensure they are up-to-date and continue to be applicable to your situation.

Please reach out to your advisor if you have any questions related to trusts or your current estate planning documents.

March 21, 2024