Revocable vs. Irrevocable Trusts: Which Is Right for Your Estate Plan?
Creating an estate plan is one of the most important steps you can take to protect your future, your family, and your legacy. Whether your goal is to pass down the family cabin, set aside funds for your grandchildren’s education, or simply ensure your assets go to the right people—estate planning gives you the power to decide what happens next.
One of the most powerful tools in estate planning is a trust—but not all trusts work the same way. The key is knowing whether a revocable or irrevocable trust is the right fit for your goals.
Let’s break down the difference.
What Is a Revocable Trust?
A revocable trust, also known as a living trust, gives you flexibility and control. You can update it, change it, or even cancel it entirely during your lifetime.
Key Features:
- You can be the grantor, trustee, and beneficiary.
- You retain control of the trust and its assets.
- You can move assets in and out of the trust as needed.
- The trust can be changed or revoked at any time.
When It Makes Sense:
A revocable trust is a great choice if you want to:
- Avoid probate while maintaining flexibility.
- Plan for incapacity—your trustee can step in to manage your affairs.
- Keep your estate private and streamlined for your loved ones.
What to Watch Out For:
Because you retain control over the trust assets, they’re still considered yours for legal and financial purposes. That means:
- Creditors can still access assets in a revocable trust.
- The assets may count against you if you’re applying for Medicaid or other needs-based programs.
What Is an Irrevocable Trust?
Unlike a revocable trust, an irrevocable trust cannot be changed or revoked once it’s been created and funded. When you place assets into this type of trust, you’re giving up ownership and control of them permanently.
Key Features:
- Assets are removed from your estate.
- You can’t make changes to the trust without the consent of the beneficiaries (and sometimes the court).
- A third-party trustee typically manages the trust.
When It Makes Sense:
Irrevocable trusts are commonly used for:
- Medicaid planning—assets in the trust are not counted for eligibility if transferred early enough (at least five years prior to application).
- Asset protection—creditors generally cannot access assets in an irrevocable trust.
- Estate tax planning—helps reduce the taxable value of your estate.
What to Watch Out For:
- You lose control over the assets once they’re transferred into the trust.
- You can’t undo or easily modify the trust terms later.
Which Trust Is Right for You?
Choosing between a revocable and irrevocable trust depends on your goals:
- Want flexibility and control? A revocable trust may be best.
- Need to protect assets from creditors or qualify for Medicaid? An irrevocable trust could be the right fit.
Every estate is unique, and the right solution depends on your specific situation. That’s why working with an experienced estate planning attorney is so important.
Let’s Build the Right Plan for You
At Johnson/Turner, we’ve helped countless Minnesotans create trust documents that support their goals and protect their loved ones. Whether you’re just getting started or updating an existing plan, our team is here to guide you—every step of the way.
📞 Call us today at (320) 299-4249 to schedule your no-obligation guidance call and take the first step toward peace of mind.
Your legacy. Your terms. Let’s make it happen.
