Revocable Trusts

A revocable or an irrevocable trust is part of estate planning. This trust is used for the management and protection of a person’s assets in the event of disability, incapacitation or death.

When it comes to estate planning, understanding the difference between these two types of trusts is quite important. For example, if you create an irrevocable trust when you actually wanted to create a revocable trust, the tax and legal consequences can be quite significant. Knowing the difference is very important.

What is the purpose of a trust

Simply put, a trust is an agreement between three parties where a grantor (the trust owner) transfers ownership of certain assets into a trust. This trust is then managed for the benefit of future recipients.

The grantor: The person or group which makes the trust.

A trustee: The individual or entity responsible for managing the trust.

The beneficiary: The individual or group benefitting from the trust.

Also read about Setting up a Trust.

What is the purpose of a trust

Simply put, a trust is an agreement between three parties where a grantor (the trust owner) transfers ownership of certain assets into a trust. This trust is then managed for the benefit of future recipients.

The grantor: The person or group which makes the trust.

A trustee: The individual or entity responsible for managing the trust.

The beneficiary: The individual or group benefitting from the trust.

Also read about Setting up a Trust.

Revocable trust

A revocable trust is also known as a living trust or an inter vivos trust.  Plainly stated, this is a trust that can be changed at anytime.  The revocable trust is extremely flexible.

If there are second thoughts about any provisions in the trust, those provisions may later be modified or revoked.

A Revocable Trust is an entity set up by a written document that is used to own property, including cash.  In other words, to protect your assets.

The down side of a revocable trust:

Revocable trust may not provide creditor protection if you are sued.  Assets that were funded into the trust may still be considered personal assets.

Where must it be filed

There is no filing requirement.  This is generally considered a good thing about trusts.  The names of the trustee, beneficiary, and trustor are kept private.

If the trust owns real estate, there may be a requirement to file what is referred to as a Certificate of Trust or a Memorandum of Trust.   This identifies the name and address for the trustee.

The trust may need to apply for its own federal tax identification number.  Otherwise, it may only need to use the social security number of the trustor.

Irrevocable Trust

What is the difference between a revocable trust and an irrevocable trust

Both revocable trust and irrevocable trust begin with an intervivos trust.  Simply put, a trust that goes into effect while you are still alive.  You can decide if the trust should be revocable, meaning you can change your mind, or irrevocable, which basically means it cannot be changed.

irrevocable trust2

What is a spendthrift trust

A spendthrift trust is a type of trust created for the benefit of an individual that is unable to control their spending or finances. This type of trust gives the trustee authority in making decisions on how the trust may be spent or how it is distributed.

Benefit of a spendthrift trust

Creditors are not able to gain access to these funds since the beneficiary is not actually in control.

The Steinbach Law Firm prepares Revocable and Irrevocable Trusts.

Our fee is $950 per trust.  Additional documents may be needed if you transfer real estate into the trust.

Do you have questions about revocable or irrevocable trusts?  Speak directly with attorney Scott Steinbach at 972-960-1850 for a free consultation.

R. Scott Steinbach is AV Preeminent rated by Martindale-Hubble.  Peer rated for Highest Level of Professional Excellence.

Board Certified
American Bar Association
State Bar of Texas
Dallas Bar Association
AV Preeminent

Have questions? Get in touch!

Contact attorney Scott Steinbach directly by phone, email or message for a free consultation.

Have questions? Get in touch!

Contact attorney Scott Steinbach directly by phone, email or message for a free consultation.