Trusts are an option when planning what you want to happen to your estate after you die. Wills are valuable, but heirs may challenge them in a Texas probate court, and your assets might not go to your intended parties as a result. A trust, however, is not usually subject to probate, and the beneficiaries will receive what you want to give them. Keep reading to learn the differences between revocable and irrevocable trusts and which one might be the most appropriate choice for your situation.
In a revocable trust, you transfer assets you wish to bequeath to an account where you can maintain control over its contents. Valuables may include almost anything; money, jewelry, art, real estate and cars are a few likely candidates. When you establish the trust, you create a modifiable document in which you name your beneficiaries and list what you wish them to receive. This document and the assets may change over the course of your lifetime. When you die, a revocable trust transitions into an irrevocable trust managed by your designated trustee.
When you create an irrevocable trust during the estate planning process, you name someone other than yourself as a trustee and relinquish control of your assets. Everything in the account now belongs to the trust and not to you. An irrevocable trust is helpful if you want to reduce the value of your estate for tax purposes and shield your valuables from creditors. Because you are no longer the owner, creditors cannot touch the account. However, once you name your beneficiaries and what you wish to give them, you cannot change your mind and alter the document. It is irrevocable.
Everyone benefits by drafting their estate plans while they are still of sound mind and body. Take some time to consider if a trust might be a viable option for you.