For individuals thinking about how trusts might benefit them when planning their estates, the decision between a revocable and an irrevocable trust might seem perplexing. That estate planning decision pretty much hinges on how much control a grantor wishes to have over his or her assets. There are certain things a trust can and can’t do for Arkansas residents.
A revocable trust is pretty much dictated by its name — it can be revoked or changed by the grantor as many times as he or she deems fit. An irrevocable trust, on the other hand, is set up by a grantor but overseen by a trustee. Its contents are not changeable unless the trustee and beneficiaries of the trust approve the changes.
A grantor obviously has more control over a revocable trust, but the benefits of an irrevocable trust are more. An irrevocable trust is used to shield assets from taxes. A revocable trust may save an estate from going through probate. But as soon as the grantor dies, a revocable trust essentially becomes irrevocable anyway and will be managed by a trustee.
Both these types of trusts are inter vivos, or living trusts. On the other hand, testamentary trusts become effective after the grantor’s death and are created from a will. Making a decision regarding what kind of trust is best for an individual situation would be best discussed with an Arkansas estate planning attorney. He or she can explain the pros and cons of each type of trust and offer advice and guidance.