What Is the Difference Between Revocable and Irrevocable Trusts?

What Is the Difference Between Revocable and Irrevocable Trusts?

A trust is a legal instrument that enables a third party—called a trustee—to hold and direct assets placed in that trust, such as money, investments, or property. Trusts ensure a smooth and expedited transfer of assets to beneficiaries upon the death of the creator of the trust, known as the settlor, trustor, or grantor. Trusts also help avoid the time and cost of going through probate, and reduce estate taxes. They can also protect assets from creditors and lawsuits.  Reach out to a trust lawyer.

The law allows the creation of two basic trust structures—revocable and irrevocable. The main difference between the two is that a settlor can modify or terminate a revocable trustm but not an irrevocable trust.

Revocable Trusts vs. Irrevocable Trusts

Here’s a closer look at the differences between revocable and irrevocable trusts:

Revocable Trust

What Is the Difference Between Revocable and Irrevocable Trusts?

Revocable trusts, also known as living trusts, provide the flexibility to alter the trust at any point, including modifying beneficiaries, removing assets, or implementing other changes. 

A revocable trust becomes irrevocable upon the death of the settlor because the settlor can no longer change or revoke the trust. Individuals and families who desire to retain control over their assets while establishing a safety net in case of an unforeseen event may prefer a revocable trust. For example, those with a terminal or incapacitating illness may benefit from a revocable trust. 

Joint revocable trusts create an exception to this rule.

Joint Revocable Trusts

Two or more people settlors, such as a husband and wife, can create a joint revocable trust. Either settlor must agree in writing and consent to any assets transferred from the trust.

When one spouse dies, the trust does not automatically become irrevocable as it would in a revocable trust when the sole settlor dies. In a joint revocable trust, the surviving spouse can amend the trust document that specifically deals with their own property. But the surviving settlor cannot change the wishes of the deceased spouse for their property as expressed in the trust.

Revocable Trust Pros 

  • Flexibility: As the name suggests, the settlor can changed or void entirely a revocable trust during their lifetime. This allows the settlor to adjust the trust to accommodate changing circumstances, such as a change in beneficiaries or the acquisition of new assets.
  • Avoidance of probate: Assets held in a revocable trust do not have to go through the lengthy and expensive probate process. Instead, the assets can pass directly to the beneficiaries named in the trust.
  • Privacy: Unlike a will, which is a matter of public record, settlors can keep a trust private. This can appeal to individuals who value their privacy.

Revocable Trust Cons

  • Cost: Setting up a revocable trust can cost more than creating a will. Plus, a revocable trust may require ongoing management, which can add to the cost.
  • Limited asset protection: A revocable trust can protect against creditors; it does not provide the same level of protection as an irrevocable trust.
  • Tax treatment: The government treates a revocable trust the same as an individual for tax purposes. This means that any income earned by the trust pays the same tax rates as the settlor. 

Irrevocable Trusts

Irrevocable trusts are essentially the opposite of revocable trusts. Once established and funded, the settlor cannot modify these trusts —only the trust’s beneficiaries may make changes. Irrevocable trusts are less flexible than their revocable counterparts but can protect your assets better. 

For example, if someone sues you, the other party cannot tap into your trust assets to recover compensation because you the trust owns the assets, not you. The same level of protection also applies to debts, as placing certain assets in an irrevocable trust shields them from seizure by creditors.

Irrevocable Trust Pros 

  • Asset protection: An irrevocable trust protects assets from creditors and lawsuits. This can especially benefit those in high-risk professions or who worry about lawsuits.
  • Tax advantages: Irrevocable trusts can minimize estate taxes, gift taxes, and generation-skipping transfer taxes.
  • Control: An irrevocable trust can provide greater control over how your assets are distributed and used after your death. For example, you can specify that funds must pay for the education or support of your beneficiaries. 

Irrevocable Trust Cons

  • Lack of flexibility: As the name suggests, a settlor cannot change or repeal an irrevocable trust. Once you place the assets in the trust, you lose control over them.
  • Cost: Irrevocable trusts can cost more to establish and maintain than revocable trusts or other estate planning tools.
  • Loss of Access: Because you no longer control assets you place in an irrevocable trust, tou cannot use them for your own benefit, even in the case of financial hardship.

Trusts vs. Wills

Wills and trusts are both important estate planning tools that help you manage and distribute your assets after your death. But they have fundamental differences:


A will is a document that outlines how you want to distribute your assets after death. It can also appoint an executor to carry out your wishes, name guardians for minor children, and provide instructions for your funeral and burial. A will goes through probate, which is a legal process that validates the will and ensures that the estate distributes your assets according to the will’s instructions. 


Unlike a will, a trust can provide ongoing management and protection of your assets for the benefit of your beneficiaries, even after your death. They also minimize estate taxes and save time and money by avoiding probate. Trusts can provide more flexibility than wills for those with larger or more complex estates. But they can cost more to set up and maintain than a will and may those with smaller or less complex estates may not need them. 

Our Vero Beach Trust Lawyers Can Answer Your Questions Today

Jordan Lulich, Real Estate Attorney near Vero Beach, FL area
Jordan Lulich Real Trust Lawyer in Vero Beach

If you have questions about estate planning and creating a revocable or irrevocable trust, our Vero Beach estate planning lawyer can help you. We have years of experience helping individuals and families create trusts to protect hard-earned assets for their beneficiaries. Our personalized approach to setting up your trust can clarify your wishes and reduce the chance of disputes.

If you have questions about establishing a trust, avoiding probate, and keeping your affairs private, the team at Lulich & Attorneys can answer them. Contact us today online or call us at (772) 589-5500 today.