What is the Difference Between Revocable and Irrevocable Trusts?
Should you use a revocable family trust when planning your estate? And what tools are successful families using to plan to their estates? The problem with revocable trusts is that your assets are not protected from your creditors and those assets are still subject to inheritance tax. In many cases, those results are highly undesirable. Sophisticated estate planning might use a revocable trusts and will in combination with irrevocable trusts. For example, owning your own life insurance can be subject federal estate tax, currently at 35% but it could go back to 55%. Many sophisticated estate planners own their life insurance under an irrevocable trust. This takes the asset out of their estate making it worth much more than if it were left in the estate. Irrevocable trusts can also be used to move assets to the next generation while still allowing access to the living owners. These are complex techniques and not for everyone. If you have questions about revocable and irrevocable trusts, please call David M. Frees at 610-933-8069 or email him directly at [email protected] to learn more.