Residents of Florida who opt for a living trust to control their wealth and assets are faced with another choice when it comes to an irrevocable trust versus a revocable one. A revocable trust can be changed at any time while it is very hard to change an irrevocable one once it has been signed. Even while you are alive and can make your own decisions, it takes very specific circumstances to be able to change an irrevocable trust.
According to FidelityInvestments, the benefits of a living trust are many. Placing your wealth in a trust allows for a trustee to hold and manage assets on behalf of your beneficiaries. A trust allows you to avoid probate, court fees and wasted time. You have control over how the money is disbursed, but you are no longer in charge of it.
When you sign control of your assets over to an irrevocable trust, you do lose complete control over how the money is disbursed. The benefit of this is that your estate may be able to avoid paying some taxes. This type of trust is preferred when you want to avoid estate taxes and tax liability on any income the trust generates.
An irrevocable trust can also protect your wealth legally if there is a judgment against you. While a revocable trust is subject to being liquidated if you are sued to pay for something, an irrevocable trust cannot be used. This keeps your wealth safe from any legal action taken against you and ensures that your money ends up with the beneficiaries you chose. While some struggle with the idea of a trust that you can no longer change, there are significant benefits to an irrevocable trust.
This information is intended for educational purposes and should not be interpreted as legal advice.