If you’ve done any sort of research about estate planning, you’ve likely come across the term “revocable trust.” It’s a common tactic lawyers such as ourselves recommend to help avoid unnecessary taxes and keep processes simpler upon a person’s passing.

But if you don’t understand what it is, it can be confusing. So here’s a handy explainer:

A trust, on its own, is an agreement that allows a third-party to hold assets on your behalf. What you place in a trust typically avoids probate and gets passed along much faster – and can be done in a way that avoids many costly penalties.

Revocable trusts (also referenced as living trusts) are trusts that can be easily changed. These can have all kinds of items and assets you intend to be passed on to whatever third party you designate.

However, as long as you are considered medically competent, you can revoke the trust at any time – for any reason. It’s handy if there’s a chance of life circumstances changing in your lifetime, or if you may want to change who the third party designee is.

The downside: Typically, you’ll still be taxed on these assets, because they still remain part of your estate until your passing.

Irrevocable trusts differ in several ways, but may not be the ways you would think:

• Once enacted, the assets funded to the trust can be protected from the cost of long term care, or may be able to avoid estate taxes, depending on your goal.
• Our Irrevocable Trusts allow for changes to be made down the road should life changes occur, such as updating successor trustees, or changing distribution patterns.
• They represent a great tactic to avoid certain expenses while preserving your ongoing ability to have a say in how such assets are handled.

Depending on our client’s goal, whether it is simply to organize the estate to ease the burden on a surviving spouse, probate avoidance, or asset protection in dealing with the cost of long term care, our firm will create the most appropriate estate plan. In creating these plans, we may choose to use either a Revocable Trust or an Irrevocable Trust.

South Carolina and Georgia have differing laws when it comes to probate, trusts, and more in estate planning. But as a law firm dedicated solely to the practice and with licensing in both, we’re able to help residents in Aiken, SC and all through the Augusta, GA area decide if a trust is the best option for them. Contact us today!