Revocable vs. Irrevocable Trusts: What’s Best for You?

As much as we don’t like to think about it, we are all mortal; none of us will live forever.

Nevertheless, a lot of people put off making a will, thinking, “Oh, I’m young. I’ve got plenty of time.” Deep down, however, we all know that is not true. 

What many people don’t know is that a trust can be more beneficial than a will in meeting your estate planning goals during your lifetime and after death. Let’s take a closer look at what a trust can do for you that a will cannot.

A Will Has Some Disadvantages

A will, or “Last Will and Testament,” is a legal instrument that documents your wishes regarding the distribution of your assets after you pass away. This would include such things as your house, your car, and Grandma’s antique silverware. A will also allows you to designate guardians for your children.

There are, however, some disadvantages to a will that many people might not be aware of. First, a will must go through probate. Probate is a court-supervised legal process of proving that the will is valid. It is the first step in administering the decedent’s wishes. If it is a simple will and there are no issues, this process will take at least six months in Virginia and can take a year or longer. In the case of larger estates or if the will is contested, this could take years. Additionally, there are many fees, taxes, and other expenses associated with probate based on the value of the estate. Another disadvantage of a will is that it becomes a public record once you submit it to the court for probate. You have lost your right to privacy, which can be an issue if you have minor children or other vulnerable heirs.

A Trust Might Be a Better Option

When they hear the word “trust,” many people think of rich families and their rich kids fighting over access to their money. Ignore the television shows and movies; you don’t have to be a Rockefeller to create a trust.

A trust is a legal arrangement in which a trustee holds and manages assets for the benefit of certain people or “beneficiaries.” You can be the trustee, or you can name another person, a bank, or a lawyer. You can create a trust no matter how much wealth you have. A trust allows you, the “settlor,” more control over how and when your assets are distributed. If you should become incapacitated for any reason, the trustee will also step in and manage your assets according to your wishes.

Revocable vs. Irrevocable Trusts

There are two types of trusts you can consider. Each has its own distinctions that could fit your needs better than a will.

Revocable Trusts

A revocable trust, also known as a living trust or an inter vivos trust, allows you to avoid the probate process, and the estate’s assets are passed directly to your beneficiaries. In this type of trust, the settlor and the trustee are usually the same person. The settlor can change or cancel the trust at any time. If you are both the settlor and the trustee, you will designate a trustee successor if you should become incapacitated. 

A revocable trust, however, cannot protect your estate from:

  • Estate taxes
  • Creditors and lawsuits
  • Ineligibility for some government benefits.

If these factors are a consideration for you, the second type of trust might be a better fit.

Irrevocable Trusts

Although not as flexible as a revocable trust, an irrevocable trust provides greater asset protection and tax benefits. When an irrevocable trust is established, the property is transferred to the trust and no longer belongs to the settlor. In this way, the estate is protected from estate taxes, creditors, and legal claims. Additionally, an irrevocable trust can help you qualify for government assistance programs such as Medicaid and Supplemental Security Income (SSI). With a revocable trust, the state or federal government will take your assets into account and if you have too much income, you might be forced to “spend down” to the limit allowed for these benefits. This is not required with an irrevocable trust.

It seems contradictory, but when giving up ownership of their assets, settlors are better able to protect them. Also, if you become incapacitated, there is already a trustee in place to handle your financial affairs.

Let Us Tell You the Ways A Trust Could Benefit Your Family

Understanding trusts and wills and deciding which one is best for you can be an overwhelming process. We have the knowledge and experience you need when faced with these important decisions. If you live in Virginia, contact Jennifer Porter Law, PLLC, at (571) 532-9070 or online at to set up a consultation.