Trusts are incredibly valuable estate planning tool when they are used correctly. They allow you to transfer ownership of your property to a trustee who will manage that property for your benefit or the benefit of others. They are designed to protect your assets and ensure they are distributed according to your wishes. There are many kinds of trusts, most of which are either a form of revocable trust or irrevocable trust.

There are some key differences between revocable and irrevocable trusts, and understanding these differences is paramount in helping you choose which one is right for you.

An irrevocable trust is established by statute or through a written trust agreement. The creator of the irrevocable trust, known as the grantor, contributes property or funds to the account of the trust for the benefit of a third party. Irrevocable trusts are commonly used to:

• Fund a charitable cause
• Minimize estate taxes where applicable
• Protect assets from creditors in certain situations
• Access government benefits such as Medicaid while still protecting assets

The grantor cannot change or revoke an irrevocable trust once it is made.

A revocable trust, also known as a living trust or “inter vivos” trust, on the other hand, can be changed by the grantor or trustee at any time after it’s been created. You can put assets in the trust and still control those assets as the trustee. So during your lifetime, you can sell, buy or transfer property without significant limitations on your rights. Additional benefits of a revocable trust include, but are not limited to:

• Avoiding the probate process
• Creating trusts for family members
• Forming a flexible estate planning tool where you still maintain control
• Supporting incapacitated family members in need of medical care and financial support

There are several types of irrevocable trusts used for transferring assets outside of a will, including grantor-retained annuity trusts (GRAT), special needs trusts, spousal lifetime access trusts (SLAT) and qualified personal residence trusts (QPRT).

At Anker Law Group, P.C., our estate planning attorneys represent clients in Rapid City and throughout South Dakota. We can help you decide which type of trust best fits your needs and gives you the most benefits. Call 605-519-5967 or contact us online for a free consultation.