Legal-EASE: What’s the Difference between a Revocable and Irrevocable Trust?

Once only the tool for the very wealthy, more and more modest wealth families have begun to use revocable living trusts in their estate planning.  A revocable living trust acts as a substitute for a Will and has the additional benefit of avoiding the court process known as probate.  Probates can be costly and may help open the door to family squabbles.

A common misconception about revocable living trusts is their ability to provide protection from creditors.  When you have access to your assets in the revocable living trust, this means creditors have access to your assets too.  If you have a concern about outliving your money due to a long term illness, a revocable living trust will not provide your assets protection from a spend-down required for Medicaid nursing home eligibility.

More people are learning about irrevocable trusts created specifically for protecting assets from large care expenses if you or your spouse develops a long term illness.  However, irrevocable trusts require taking the necessary steps to plan ahead in order to avoid eroding your assets.

If you have any questions regarding this topic, don’t hesitate to contact our firm. We are you Tampa Bay Elder Law attorneys.