Revocable and irrevocable trusts are two type of legal estate vehicles that are often used to protect, manage and pass on assets. The reasons you might use a trust include protecting assets against creditors or ensuring your wishes are maintained with regard to use of assets even when you are no longer able to make such wishes known.
A revocable trust is one that you can create and then revoke or change during your life. Sometimes these are referred to as living trusts because you can manage them while you are still living. Usually, the person who creates the trust acts as the first trustee for the trust – that means you would maintain access to and control over the assets transferred into the trust in keeping with the rules of the trust that you set up.
You might set up a revocable trust if you are young or if you are retired but have assets you want to protect, but you are not sure if you want to maintain such protection or legal set up forever. Holding assets in a trust lets you mitigate some probate issues for heirs should you pass away unexpectedly, and the revocable trust provides you that benefit without locking you into a legal vehicle you might later deem unsatisfactory.
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An irrevocable trust, on the other hand, is one that cannot be altered or revoked once it is in place. Even you, as the creator of the trust, cannot revoke it. Because of the inflexible nature of this type of trust, it is often limited in use to functions such as holding a life insurance policy. However, every situation is unique, which is why it’s important to speak with a legal professional in Pennsylvania to understand what type of estate documents would work best for your goals.
Source: FindLaw, “Types of Trusts,” accessed April 15, 2016
