If you’ve ever looked at a trust document, you probably have seen the terms “revocable” and “irrevocable” trusts. Just so you know, 100% of trusts are either revocable or irrevocable. So what do they mean?
Quite simply put, a revocable trust is a changeable trust. it’s easy to dissolve and move assets in and out of.
An example of this would be a family trust. Most family clients will have a revocable trust and if they don’t they should. This is where all the assets can go so when that person passes away, they will avoid probate, they wont have administrative costs and the government in their affairs.
An Irrevocable trust is the opposite. You cannot change this kind of trust.
A great planning technique is to use a hybrid domestic asset protection trust with life insurance sales to help people get assets out of their estates and protect the asset from predators while moving the assets down to the next generation without estate tax.
Just remember: revocable is changeable, irrevocable is not changeable.