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Rech Law, P.C. Rech Law, P.C.
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What is the Difference Between an Irrevocable and Revocable Trust?


Trusts are essential tools in estate planning, allowing individuals to manage how their assets are handled both during their lifetime and after their passing. Two common types of trusts are the irrevocable and revocable trusts, each with distinctive traits and purposes. Understanding the differences between these trusts is crucial when deciding which type suits your financial and estate planning goals.

Irrevocable Trust

Key Characteristics:

  • Once established, an irrevocable trust cannot be modified or canceled without the permission of the trust’s beneficiaries.
  • The grantor (who creates the trust) effectively removes all ownership rights to the assets placed within the trust.
  • Irrevocable trusts typically offer protection against creditors and can exclude assets from taxable estate calculations.


  • Asset Protection: Given that the grantor no longer owns the assets, they are usually protected from creditors and legal judgments.
  • Tax Advantages: Irrevocable trusts can help reduce estate taxes since the transferred assets are no longer considered part of the grantor's estate.
  • Government Benefit Eligibility: Assets in an irrevocable trust may not be counted when determining eligibility for certain government benefits like Medicaid.


  • Lack of Control: The grantor loses control over the assets and cannot change the trust's terms or reclaim the assets.
  • Inflexibility: The terms of the trust are set, and adjusting the trust for changes in law or family circumstances is not straightforward.
  • Complexity and Cost: These trusts are generally more complicated and expensive to set up and administer.

Revocable Trust

Key Characteristics:

  • A revocable trust allows the grantor to alter, change, or terminate the trust at any point during their lifetime.
  • The grantor maintains ownership rights over the trust's assets and can manage those assets as they see fit.
  • Assets in a revocable trust pass directly to beneficiaries without going through probate upon the grantor’s death.


  • Flexibility: Changes to beneficiaries, terms of the trust, and asset allocation can be made easily by the grantor at any time.
  • Continued Control: The grantor can continue to use and invest the trust assets and even dissolve the trust if desired.
  • Probate Avoidance: Assets can be passed to beneficiaries without the cost and delay associated with probate.


  • Less Protection: Since the grantor retains ownership of the assets, they are not protected from creditors and may still be subject to legal claims.
  • Tax Implications: Assets in a revocable trust are still considered part of the grantor’s taxable estate, which may increase estate taxes due upon death.
  • Potential for Mismanagement: Poor management or investment decisions can adversely affect the trust's value because the grantor controls the trust.

Estate Planning Attorneys in Charlotte

If you're considering establishing a trust and need expert guidance, contact Rech Law, P.C.. Our experienced team in Charlotte, NC, is dedicated to helping you secure your legacy and protect your loved ones' future. Whether you're leaning towards the flexibility of a revocable trust or the asset protection of an irrevocable trust, we're here to provide the clarity and support you need. Reach out to us today at (704) 659-0007 and let's craft an estate plan that reflects your wishes and stands the test of time.

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