What are the key differences between a Revocable and Irrevocable Trusts?

All trusts fall into two broad categories, revocable and irrevocable Trusts.

The main difference between revocable and irrevocable trusts is that the grantor, or creator of the trust, may make changes during his or her lifetime to the revocable trust, but may not do so to the irrevocable trust. You may ask, why would we ever want an irrevocable trust? Typically, the reason comes down to one of two, either for asset protection purposes or for tax advantages.  Since either choice includes downsides, the guidance of a Florida Bar Board-Certified Estate Planning and Trusts attorney is the best way to avoid a costly and possibly irreparable mistake.

Tax Advantages of revocable and irrevocable trusts

Consider a quick example on the tax side. Let’s suppose a client has shares of stock that are worth $100 a share, but the client believes that the value of those shares is going to appreciate significantly, let’s say to $5,000 a share. It may make sense for the client to transfer the stock into an irrevocable trust today and allow that appreciation to take place outside of his or her estate, thereby potentially saving the client in estate taxes down the road.

Law Offices of John Mangan, P.A.     Palm City – Stuart, FL

Do you question the need for attorney guidance with so many online resources? Because laws and regulations are complex, and because every person has a lot at risk, more people than ever are seeking professional guidance from an experienced, knowledgeable source. That helps explain the rapid growth of our firm. Whether you happened upon this website by accident or are one of the many referrals we receive from a nearly 15-year collection of satisfied clients, our staff can provide customized estate planning guidance for you. Call us. Our number: 1 (772) 218-0480