In this Elder Law Minute, Wes Coulson discusses the difference between revocable and irrevocable trusts.
I want to talk to you today about the differences between revocable and irrevocable trusts. Let’s start with a basic. If a trust is revocable, that means that the person who established that trust can change it, or get rid of it any time they might desire. An irrevocable trust is basically set in stone. Once it’s there, it’s there. You can’t change it anymore and you can’t get rid of it.
Now you might think, why would you want to have an irrevocable trust? Well, one of the big differences is that in the context of benefits eligibility planning, assets that are in an irrevocable trust that has been setup and administered correctly don’t count as being part of the assets that you have to spend down to qualify for benefits.
Another reason that a trust becomes an irrevocable trust is one that will make sense when I say it, and that is your living trust, which is revocable during your lifetime, becomes irrevocable when you die. Well, why is that and why are you happy that that’s the case? You might want to reserve the right to change your estate plan during your lifetime, but after you die you certainly want to go to your grave secure in the knowledge that what you have decided in terms of who is to benefit from your estate, is the way it’s going to be.
You don’t want people to come back long afterwards and say, “Well, you know, I don’t know what Wes was thinking but he should have given it all to me and not to his wife and his kid.” So, you want it to be set in stone when you die.
There are other differences too, but this is an intro. This is not a law school course.
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.