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To those of you not familiar with trusts, you may have heard the term but aren’t sure what it means. A trust is a legal relationship in which one party, called the trustee, manages assets for the benefit of another party, called the beneficiary. There are different types of trusts, including revocable and irrevocable trusts. What are the differences between these two types of trusts? Keep reading to find out! What Is An Irrevocable Trust What is an Irrevocable Trust? Irrevocable trusts are used to ensure that assets are not claimed by creditors. These trusts allow you to retain control over your property, and make sure you can use it however you want without others making claims on it. What Is A Revocable Trust? A revocable trust is exactly what it sounds like. The trust is in place while you are alive, but can be revoked at any time. You control all of its assets and decide who will receive them once you die. They are popular because they need very little legal work to put into place. When To Choose An Irrevocable Vs. Revocable Testamentary Trust In estate planning, there are two types of trusts that you can choose to place your assets in upon your death. Irrevocable and revocable. An irrevocable trust cannot be changed after it has been established. Once you put assets into an irrevocable trust, they’re out of your control forever. With a revocable trust, on the other hand, you have more control over what happens to your assets while you’re alive. How Much Does An Irrevocable Or Revocable Testamentary Trust Cost? You can make a living will and/or create a testamentary trust in one of two ways. You can do it yourself for free, or you can pay someone to do it for you. Making these documents yourself is relatively simple. But if you want an added layer of protection for your family, an estate-planning attorney could charge anywhere from $2,000 to $10,000. Who Can Create A Beneficiary Designation On Their Health Insurance Policy? When you purchase health insurance, you have to fill out an application. At that time, you will be asked if anyone other than yourself is permitted to make health care decisions on your behalf in case of incapacity. If you grant someone else power of attorney (POA) or appoint a trustee or guardian over any part of your estate, including your medical power of attorney (mPOA), then you cannot add them as beneficiaries on your health insurance policy. Is There A Difference Between Living And Dying Estate Plans? No one wants to think about dying. But creating an estate plan is one of those tasks that should be dealt with sooner rather than later. It can be tempting to opt for a living will or living trust and forego planning for assets you may leave behind after your death. However, there are differences between living and dying estate plans. So it’s important to understand what they are before choosing which type of estate plan is right for you. About The Author Jim Turner is a USA-based author of Legal issues related to estate planning, will & trust, business law, and elder law. Jim Turner does his best writing on these topics last will and testament Michigan which helps users to find the best solutions to their FAQ on estate planning, revocable vs irrevocable trust, living trust, and more about legal family issues. The author can be reached through rochesterlawcenter.com
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