Revocable vs Irrevocable Trust | California Differences
Revocable vs Irrevocable Trust
Understanding the key differences between trust types.
Both revocable and irrevocable trusts avoid probate, but they serve different purposes. A revocable trust offers flexibility and control. An irrevocable trust offers asset protection and tax benefits. Most families start with a revocable living trust.
| Revocable Living Trust | Irrevocable Trust | |
|---|---|---|
| Can You Change It? | Yes - modify or revoke anytime | No - permanent once created |
| Control | You retain full control | You give up control |
| Asset Protection | No protection from creditors | Assets protected from creditors |
| Estate Tax | Assets included in taxable estate | Assets removed from taxable estate |
| Income Tax | You pay taxes on trust income | Trust or beneficiaries pay taxes |
| Probate | Avoids probate | Avoids probate |
| Medi-Cal Eligibility | Assets count against eligibility | Assets may not count (if done correctly) |
| Common Uses | Estate planning for most families | Asset protection, estate tax planning, special needs |
| Best For | Most California families | High-net-worth estates, Medi-Cal planning, special situations |
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