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Revocable & Irrevocable Trusts: Who, What, When, Where & Why

While there are many different types of trusts used to accomplish various goals, two of the most commonly used in the estate planning area of our practice are revocable and irrevocable trusts. While there is some similarity between the two, these major categories of trusts serve vastly different purposes in your estate plan. Similarly, both can substitute for a will as an alternative way to distribute assets to avoid probate in Delaware and Maryland. However, a trust and a will often exist concurrently. Whether a revocable or irrevocable trust works better for your estate plan depends on what you need the trust to do for you. In many instances, it may be beneficial for you to utilize both types of trusts.


We often rely on prior knowledge to guide us in our decision-making processes. When we hear the word “trust” our minds may take us back to the last movie we saw where the uber rich are the only people in need of a trust. The truth is trusts aren’t just for the super wealthy. Trusts benefit any one of us who have worked hard (or maybe are still working hard) for what we own and wish to accomplish certain goals through an estate plan. The ‘Who’ behind trusts comes down to what your goals are- not necessarily dollar signs.


The most striking difference between these types of trusts is defined in their names. A revocable trust permits changes and amendments at any time while you are alive and mentally capable of doing so. In contrast, an irrevocable trust has much stricter rules regarding what can be changed, how it can be changed, and who can change it while you are alive. Both trusts, when properly implemented, funded, and maintained, allow your estate to bypass the probate process. A revocable and irrevocable trust will survive your death, and your named successor trustee will be able to distribute trust property free from court interference after your passing. While both trust types help you control the distribution of your assets with conditions you outline, a revocable trust will not allow for the trust maker to receive protection of trust assets. The lack of asset protection associated with a revocable trust is significantly different from an irrevocable trust. Commonly called an asset protection trust, an irrevocable trust can shelter assets to prevent the distribution to certain entities or people, like a long-term care facility. An irrevocable trust creates a legal wall separating you and your assets, therefore shielding your assets from long-term care costs.


One word- now. It’s essential to create an estate plan proactively so that you or your family are not forced to act reactively which is often stressful, time-consuming, and as a result, costly (Click here to read our blog post: Plan- Don’t Wait for an Emergency). Probate avoidance must be planned for in advance by creating a revocable trust and aligning your assets with the trust in order for this goal to be accomplished. Asset protection through the use of an irrevocable trust must be completed five years in advance of a crisis situation for assets to be fully protected.


Estate planning should be handled by an experienced elder law and estate planning attorney who helps clients qualify for long-term care Medicaid and VA benefits. At DiPietro Law, we are a boutique firm- meaning we practice solely in the areas of estate planning, elder law and estate administration. We serve Delaware and Maryland clients.


The purpose of a revocable trust is probate avoidance. Why avoid probate? The process is slow and time-consuming, often taking about a year for simple, uncontested estates. Probate can also be costly as a portion of the net estate is paid to the local register of wills as a probate fee. Probate is also a public process. All documents and information will become part of the public record. This includes the will, estate debts, assets, and the people or entities entitled to distribution of assets. Anyone who cares to look up this public record can become privy to who received what. Many of our clients wish to lessen the administrative and financial burden probate has on their family by avoiding probate with a revocable trust.

The ‘why’ behind sheltering assets with an irrevocable trust varies for our clients. Some are worried about having enough funds to cover their care, needs and wants. Some want to ensure their spouse or loved ones are able to maintain the lifestyle they are used to should a health crisis arise. Some want to ensure that their hard-earned assets are passed to the next generation. We don’t have a crystal ball to predict the outcome of tomorrow, but we do have tools to allow us to feel more comfortable by proactively planning for life’s unknowns as we age.

Trust types in estate plans are as varied as the individuals seeking to enact them. To best protect your goals and interests and those of your beneficiaries, schedule an initial consultation with DiPietro Law to review what estate planning tools are best suited for you.