Revocable trusts let you change or cancel them anytime and skip probate when you die. Irrevocable trusts can't be modified and shield your assets from lawsuits and creditors. Anyone with a home and over $100,000 in assets should consider one.
What is the difference between a revocable trust and an irrevocable trust? All trusts are either revocable or irrevocable, and they're not just for the super rich. If you own a home and have over $100,000 in assets, you probably need a trust. A revocable trust is just as the name says. It can be revoked at any time. It can be changed. It can be amended and put assets in. You can take assets out. Why do you need a revocable trust? For starters, it allows a very manageable transition of your assets if you die. If something were to happen, your successor trustee would come in and manage those assets according to the instructions you left in the trust. Another big reason to have a revocable trust is that it avoids the probate process. If all you have is a will, your heirs are likely going to have to go through probate, which is 6 months to a year or more, and it's going to cost 5% or more of the value of your estate. An irrevocable trust is just that, irrevocable. You can change it, but it's very, very difficult to do so. Assets you put in an irrevocable trust are no longer in your name. They're protected from lawsuits and creditors and ex-spouses. Irrevocable trust also avoids probate.
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