The revocable trust is just that, revocable. You may change, amend and
cancel the revocable trust during your lifetime. Upon your death, the
trust becomes irrevocable. You may also retain benefits from a revocable
trust during your lifetime. On the other hand, the irrevocable trust does
not allow for the flexibility of change. Once an irrevocable trust is
executed, it cannot be changed.
It is important to distinguish a revocable from an irrevocable trust because
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.
For example, assets titled to your revocable living trust are vulnerable
to your present and future lawsuits. To lawsuit-proof your wealth, you
need an irrevocable trust or another protective entity. Revocable trusts
are however, great Estate Planning tools.
While it does offer more protection, one serious disadvantage of using
an irrevocable trust is that once you establish and fund the trust, you
cannot cancel or modify it and reclaim property you transferred to it.
You thus lose both ownership and control over the trust assets. Since
you cannot revoke or change an irrevocable trust, your creditors have
no greater power to unwind your trust and reclaim its assets. But for
an irrevocable trust to protect you, it must be presently funded. Until
you transfer assets to your trust, they are your assets, and can be claimed
by your creditors.
For Asset Protection we seldom use irrevocable trusts because you lose
both ownership and control over your assets. There are other combinations
of protection which can be created to provide you with security as well
as control. 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
The Presser Law Firm, P.A.
6199 N. Federal Highway, Boca Raton FL 33487
(561) 953-1050 or e-mail Info@AssetProtectionAttorneys.com