The difference between these types of trust is vast and can be used to accomplish your personal estate planning goal.
A Revocable Trust allows a person to amend, change the conditions under which the assets are held, reclaim the assets for personal use or even revoke the trust at any point. These trusts are commonly used to avoid Probate, which is required when an individual dies with assets that pass through their estate. With a revocable trust, once the testator passes, a successor trustee can distribute the trusts assets to the named beneficiaries without the supervision of the probate court. Due to this nature, the process tends to be quicker and more private than probate. These trusts are tax neutral.
An Irrevocable Trust is one where a person relinquishes all the rights to the assets in the Trust. The person cannot amend, alter or revoke the terms of the trust. The trusts assets also are not subject to probate. Further, unlike revocable trusts, these assets are excluded from the Settlor's estate. This helps to reduce the grantor's estate tax burden.
***Mrs. Berdugo is licensed to practice law in PA and NJ. If you have any questions or would like to contact me regarding planning your estate my phone number is 215-992-9662 or my email address is firstname.lastname@example.org or you can follow me on twitter @Berdugolaw ***