Revocable and Irrevocable Trusts

Trusts fall into one of two groups.

Trusts fall into one of two groups, irrevocable or revocable contracts. The following are some of the distinctions between them.

A revocable trust, as its name implies, is one that can be revoked at any time. In other words, the person in charge of the trust can change or amend the trust's provisions. Small adjustments, such as changing a beneficiary, can be made. On the other hand, the change could be significant, such as the entire trust being revoked or dissolved. Living trusts are typically revocable.

On the other hand, irrevocable trusts are a type of trust that cannot be changed and typically cannot be amended after they are executed. Because the trust is irrevocable, assets placed in the trust are typically owned by the trust and not the person who gifted the asset to the irrevocable trust. For this reason, these types of trusts are generally used when attempting to protect your assets. Some examples of irrevocable trusts include life insurance trusts and asset protection trusts.