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When Does a Revocable Trust Become Irrevocable?

Revocable trusts offer many benefits, including protecting your assets and keeping them out of probate. They also allow you to control and access the assets in the trust as well as make other changes at any point during your lifetime. If you’ve already set up a revocable trust or are considering doing so, you may be wondering if and when your living trust becomes irrevocable. And if it does, what does that mean? In this post, we explain everything you need to know about when living trusts become irrevocable.

Revocable vs. Irrevocable Trusts: What’s the Difference?

When you create any type of trust, you (the grantor) give another person (the trustee) the right to hold and manage the trust’s assets on behalf of its beneficiaries. Typically, the grantor is also the trustee until they pass away or become incapacitated, then the designated successor trustee takes over. 

Revocable Trusts

A revocable or “living” trust allows the grantor to amend the trust during their lifetime, as long as they aren’t incapacitated. Living trusts are very flexible, as you can add, remove, and access the assets at any time during your lifetime. You can even change the terms of the trust if necessary.

Irrevocable trusts

But with an irrevocable trust, the assets are not accessible—they cannot be removed, and the terms of the trust are set in stone. An irrevocable trust cannot be changed without unanimous approval from the beneficiaries and/or a court order. 

When Does a Revocable Trust Become Irrevocable?

The Death of the Grantor

A revocable trust automatically becomes irrevocable upon the death of the grantor. Some married couples opt for a joint revocable trust, which does not become irrevocable until both spouses have passed away. 

When a trust becomes irrevocable, that means the successor trustee cannot make any changes to it. They can only administer the trust according to the grantor’s wishes dictated in the trust. 

The Grantor Becomes Incapacitated

A revocable trust can also become irrevocable during the grantor’s lifetime if they become incapacitated in some way. In this case, the successor trustee will carry out the grantor’s wishes regarding the assets in the trust, just as they would if the grantor had passed away. 

While having a trust can help you prepare for becoming incapacitated, it’s also important to name your power of attorney (POA). They will be able to make important medical and/or financial decisions on your behalf if you become incapacitated, depending on the wishes you lay out. 

Irrevocable Trusts and Debt

Another benefit of an irrevocable trust is that debt collectors (typically) cannot go after the assets in a trust. For example, if you plan for the trust to remain in effect until your minor child turns eighteen, the assets will be protected until that time. However, the assets in a trust may still be vulnerable to creditors if the funds from the rest of your estate are not enough to settle your debts. 

Can an Irrevocable Trust Be Changed?

While you can change a revocable trust to an irrevocable trust before your death, the opposite is never possible—you cannot change an irrevocable trust to a revocable one. And, although you can move assets from a revocable trust to an irrevocable one, it doesn’t work the other way around.

Wills and Trusts in the Phoenix Valley

Do you need help setting up a revocable or irrevocable trust? The attorneys at Phelps LaClair are here to assist you. We’ve been helping Arizonans create successful wills, trusts, and other essential estate planning documents for over 40 years. Give us a call at 480-892-2488 today to schedule a free consultation in Mesa, Chandler, Glendale, or one of our other Phoenix Valley locations.

Images used under creative commons license – commercial use (2/22/2023). Photo by bruce mars on Unsplash

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