Revocable and Irrevocable Trusts – What is the Difference?

February 28, 2017 by Stephen Lasky

A trust is “revocable” if the terms of the governing instrument allow the trust settlor to amend the trust’s terms, or cancel (revoke) the trust or remove property from the trust without the approval or consent of a third party (e.g., trust beneficiary, a court).  Conversely, a trust is “irrevocable” if the terms of the governing instrument DO NOT allow the trust settlor to amend the trust’s terms, or cancel (revoke) the trust or remove property from the trust without the approval or consent of a third party.

If the terms of the trust instrument do not specify whether the trust is revocable or irrevocable, the law of the jurisdiction governing the creation / administration of the trust may specify a “default.”  Note that trusts can often be revocable for a period of time and then become irrevocable upon the occurrence of a particular event (such as the death of the settlor).

Revocable trusts can achieve some goals (such as a flexible alternative to Will-based estate planning), but not others.  Likewise, irrevocable trusts can achieve some goals (such as Medicaid planning), but not others.  Therefore, if you are considering setting up a trust, make sure you are working with an attorney familiar with not only your goals and objectives but also the purposes and functions of revocable vs. irrevocable trusts so that the trust you create is appropriate to your circumstances.

Attorney Stephen A. Lasky