Monday, December 9, 2013

Revocable Trusts versus Irrevocable Trusts

By Harry J. Lenaburg, Esq.

Many clients choose to include a Living Trust in their Estate Plan.  One reason to do so is to avoid the necessity of the filing of a probate action to transfer property when the client dies.  Many of these trusts are revocable however some clients choose to declare their trust irrevocable.  There are estate tax implications to trust planning, so a discussion with your CPA or tax accountant is in order.

If the trust is revocable, that means that the settler/trustor (the client or clients who establish the trust) have reserved to themselves the ability to amend their trust, and of transferring property to and from the trust as it suits their purpose.

If the trust is irrevocable, then once the settler/trustor transfers property to the trust, that property may not be removed and returned to the settler/trustor’s name.

Most clients prefer the freedom to transfer property to and from their trusts, so most trusts are the revocable variety.  However, as a general rule, once any settler/trustor of a trust dies, the trust become irrevocable under the terms of the trust.

Estate planning is important for all, so you should consult with an experienced estate planning attorney in your area to discuss the best options for you and your family.


The Law Firm of Jessica M. Cotter, P.L.L.C.
18301 North 79th Avenue, Suite F-168
Glendale, Arizona 85308
602-843-3004
Jmcotterlaw.com
Jessica.Cotter@azbar.org



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