Two of the possible ways for people making arrangements for the disposition of their assets after their death are wills and irrevocable trusts. Each one has unique strengths. Here’s how the two compare and contrast so you can determine if one or the other is right for you. Don’t let the intricacies of estate planning keep you from deciding what happens to your assets after you die; work with a financial planner to take the estate planning steps that are best for you.
What is an Irrevocable Trust?
A trust is a legal vehicle where you can place your assets, either to keep there for a period of time or to distribute. The grantor, or creator, of the trust typically uses it to pass on these assets after they die to their beneficiaries. With a trust, there are also applications outside of death. For example, a trust maker might create a trust just in case they become incapacitated.
With this trust, you establish the trustee, or the person with a fiduciary responsibility to manage the trust, your beneficiaries, and transfer your assets. The grantor cannot act as the trustee nor the beneficiary, though. You give up control of your property, funds, etc., when you put them in an irrevocable trust. So, since the assets no longer belong to you, you typically cannot change the trust or its terms.