Michigan Revocable Vs. Irrevocable Trusts: Understand The Key Differences

If you are looking into advanced estate planning options to gain more control over your assets, a trust may make sense. You can create a trust in advance, leaving instructions for the trustee regarding how the money should be used, giving you far more control of your assets than a will may provide.

Trusts can generally be either revocable or irrevocable, making it important to know which option is best in your unique situation. There are pros and cons to both, and the answer will be different for everyone.

Whether you want to use revocable or irrevocable trusts, Gormley Law Offices, PLC can help. With more than 25 years of experience to lean on, we offer the personalized assistance and guidance you need. Our lawyers are known for helping those in the Fowlerville community develop a customized estate plan that is ideal for each unique situation. We use our experience and Michigan estate planning knowledge to help you decide what will work best for you.

What Is A Revocable Trust?

A revocable trust, often called a living trust, can be altered during your lifetime. You can remove assets from the trust, for instance, or add new assets. You can alter the terms of asset distribution in a living trust and can even terminate the trust entirely, moving the assets back into your possession. The trust can be altered or revoked until you pass away when it becomes binding.

What Is An Irrevocable Trust?

An irrevocable trust cannot be altered or changed. Once tangible or financial assets have been added to the trust, they are there forever. The rules and regulations of the trust are binding. This can be useful if you truly want to remove assets from your estate entirely. For instance, you may want to put assets into an irrevocable trust if you are trying to reduce the value of your estate for tax purposes. However, since the trust cannot be changed or terminated, you sacrifice control over those assets.

How Are Michigan Revocable And Irrevocable Trusts Different?

Revocable trusts turn into irrevocable trusts when you pass away, so they are very similar in many ways. The largest difference is simply that an irrevocable trust is binding from the moment it is created. It cannot be altered, so you must be sure that you know exactly how you want to use those assets. Putting them into the trust changes ownership forever. There are major benefits, such as keeping those assets from creditors or lowering the taxable value of the estate, but you need to know that you cannot change your mind in the future.

Even with a revocable or living trust, a will and comprehensive estate plan are essential. The trust serves as a tool for asset storage and distribution, offering flexibility. For instance, you might appoint a trustee to manage an heir’s funds to prevent overspending. You can modify the trust if your health changes or you adopt new estate planning strategies. This adaptability ensures your wishes are honored, as the trust becomes irrevocable upon your passing, guaranteeing your instructions are followed.

Call Now For A Free Consultation

We offer free consultations if you would like to sit down with an experienced attorney and learn more about revocable trusts and irrevocable trusts in Michigan. We can help you explore what advantages each trust provides, what goals you are trying to accomplish and – ultimately – what will be best for you and your family.

There is no obligation to work with us after the consultation, so call us in Fowlerville at 517-219-9301 or use the online contact form to arrange your free consultation.