What’s The Difference Between Revocable And Irrevocable Trusts In Illinois?

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A revocable trust – also known as a living trust – can be changed anytime during your lifetime. An irrevocable trust typically cannot be changed once created. Both have specific benefits depending on the assets you want to protect and your family’s circumstances.

If you have high-value or complicated assets in Illinois, estate planning and trust attorneys familiar with complex estate plans can offer guidance for sophisticated solutions that fit your family’s needs. Solutions may include revocable or irrevocable trusts.

Defining The Two Basic Types

Trusts are separate legal entities created to take ownership of a person’s assets. They allow individuals, called grantors, to manage their assets as they see fit. Once a trust is created, its assets are managed by a third party called the trustee. The grantor can also be the trustee for a revocable trust but not for an irrevocable trust. Here are the main differences between the two:

  • Revocable (living) trust: The grantor can change the terms at any time. They can add or remove beneficiaries and modify how the assets are managed.
  • Irrevocable trust: No changes can be made once the paperwork is signed, except under rare circumstances.

Both fall under two categories. Living trusts – or “inter vivos” trusts – begin during the grantor’s life but can continue after death. Testamentary trusts transfer property only after the grantor dies.

Advantages And Disadvantages Of A Revocable Trust

Revocable trusts are flexible and offer many benefits. These include:

  • Ensuring the grantor’s wishes are followed if they die or become incapacitated.
  • Allowing assets included in the trust to avoid the costly, lengthy and public probate process.
  • Holding assets that aren’t suitable for irrevocable trusts, such as qualified retirement accounts, including 401(k)s, 403(b)s and individual retirement accounts (IRAs).

But flexibility for the grantor comes with some drawbacks. Assets contained in a living trust are not shielded from creditors or lawsuits. There are also no tax benefits for placing assets in a revocable trust.

Advantages And Disadvantages Of An Irrevocable Trust

Along with avoiding probate, irrevocable trusts are often used for protecting generational wealth and for gift-planning strategies. The main benefits include:

  • Tax benefits: Keeping assets in a trust for generations can avoid estate taxes.
  • Creditor protection: Assets included in an irrevocable trust are no longer held in your name, which can safeguard them from lawsuits and help keep them out of the reach of creditors, ex-spouses and others.

While these benefits are crucial for many, others have a tough time giving up control.

Questions To Ask Yourself When Creating A Trust

Given the pros and cons of each type, knowledgeable trust and estate planning attorneys can help guide you by assessing your goals. If you are only interested in protecting your assets if you become incapacitated, a revocable trust, financial power of attorney, health care directive and pour-over will could meet your goals.

But if your priority is minimizing taxes and protecting assets from creditors, an irrevocable trust may be the best fit for your situation. An experienced lawyer will ask many questions to assess what is most important to you. Some of the key questions include:

  • Do you want to retain control of your assets while living?
  • How do you want your assets managed if you cannot manage them due to illness or injury?
  • Do you want to reduce or avoid estate taxes by removing assets from your estate?
  • Are you concerned about lawsuits or that creditors may try to seize your assets?

Trusts serve many purposes, so it’s crucial to understand the many tools and options to create a plan that best fits your needs. It’s also essential to periodically revisit trusts, especially those created before 2020, as Illinois trust law underwent significant changes. Reviewing your document with a knowledgeable lawyer can help determine whether any revisions are necessary.


The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.

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