If you are considering using a trust as part of your estate plan, one of the things you will need to consider is whether to create a revocable trust or an irrevocable one.
One of the key reasons people opt for irrevocable trusts is that they do not need to pass through probate. This can save time in getting assets to your chosen beneficiaries. It can also protect those assets, both upon your death and while you are still alive. This could be critical if you owe money or are in a profession where the risk of a lawsuit is high, and your personal assets could be at risk if you lose.
Let’s say you are certain that an irrevocable trust is right for you. Before you go ahead and create it, consider what circumstances could occur that would make you regret that choice.
Illness
Imagine you, or someone you love, falls seriously ill or is severely injured. Such situations can put families in a difficult situation where they know there is treatment available, but they just can’t afford it. People sell their houses or visit loan sharks to get the money they need to pay for the treatment. Imagine you have that money locked up in an irrevocable trust. How happy would you feel about your choice now?
A falling out
Relationships change. Trusted confidants can betray those who placed their faith in them. Loving children can turn on their parents in unthinkable ways. Best friends can fall out over the most minor of things and never speak again.
Imagine something happens to your relationship with a person you had set money aside for in an irrevocable trust. That money will go to them regardless. Had you used a revocable trust, you could simply have removed them from receiving it.
Learning more about different trust options can help you make appropriate choices for your estate plan.
