What is the difference between a Revocable Trust and an Irrevocable Trust? With a Revocable Trust you may change, amend and cancel the Revocable Trust during your lifetime. Upon death the Trust becomes irrevocable. On the other hand, Irrevocable Trusts cannot be modified, amended, or terminated without permission from the grantor's beneficiaries or by court order.
From an Asset Protection standpoint, it is important to distinguish a Revocable Trust from an Irrevocable Trust. A Revocable Trust won’t protect your assets; your creditors can step into your shoes and revoke your Trust if they are awarded a judgement. Assets titled to your Revocable Living Trust are vulnerable to any present and future lawsuits. To lawsuit-proof your wealth, you need an Irrevocable Trust or another protective entity.
While an Irrevocable Trust does offer protection, one serious disadvantage is that once you establish and fund the Trust, you can no longer cancel or modify it nor reclaim property that you transferred to it. Meaning you lose both ownership and control over the Trust assets. As for your creditors, they have no power to unwind your trust and reclaim its assets.
To speak with an attorney about Trusts or Asset Protection contact us at (561) 953-1050 for your complimentary Preliminary Consultation. Our experienced attorneys can help you understand the best way to protect your assets.