Revocable Trust or Irrevocable Trust: Which Is The Right One For Me?

Elderly woman in deep thought

Revocable trusts are primarily used for the purpose of avoiding probate. These trusts are private documents which are not filed in courts. The beneficiaries inherit through the trust.

IRREVOCABLE TRUSTS

Irrevocable trusts are usually set up to protect assets related to the cost of long term care. Whether it is for home or health care aids or for living in a nursing home. If an irrevocable trust is set up more than 5 years before an individual requires care in a nursing home it can be set up in a manner that would cause Medicaid to pay the nursing home expenses. Nursing home expenses can cost as much as $12-$14,000 per month. These expenses can eat up a large portion, if not all, the assets in most estates.

ESTATE TAXES

Both irrevocable trusts and revocable living trusts can be set up for the purpose of minimizing estate taxes. In New York, estates are subject to both federal and New York State estate taxation.

COST FACTORS OF TRUSTS VS. WILLS

Generally speaking, it is less expensive to have an attorney draft a will than it is to have the attorney draw up either a revocable or irrevocable trust. Wills require no administration while trusts can require some annual administration. Although wills go through the probate process, trusts avoid probate. There are many different factors to be considered when deciding with regard to your estate plan as to go with a revocable trust, an irrevocable trust, or simply a will. It should be pointed out that trusts can also be included within wills.

The best way to deal with these issues is to meet with an estate planning attorney and discuss this with him or her.

NY Attorney Elliot Schlissel

Elliot S. Schlissel is an attorney with more than 35 years of experience drafting wills and trusts and representing clients throughout the metropolitan area regarding the probate of wills.