When planning your estate, one of the most effective tools to protect your assets and ensure they are distributed according to your wishes is a living trust. Also known as an inter vivos trust, a living trust is created while you are alive and allows you to manage and control your assets both during your lifetime and after your death.
What Is a Living Trust?
A living trust is a legal document that holds your assets during your lifetime and distributes them to your beneficiaries after your death—without going through probate. You can transfer real estate, bank accounts, investments, and other property into your trust. You maintain control over these assets as long as you're alive.
Living trusts come in two main forms:
Revocable Living Trust
Irrevocable Living Trust
Let’s break down the key differences between the two.
1. Revocable Living Trust
A revocable living trust offers the most flexibility. As the trust creator (grantor), you can modify, update, or revoke the trust at any time during your life. This means you can:
Change beneficiaries
Add or remove assets
Replace the trustee
Cancel the trust entirely
When you pass away, the trust becomes irrevocable, and your chosen successor trustee will manage and distribute your assets according to your instructions.
✅ Benefits of a Revocable Living Trust
Avoids Probate: Assets in a revocable trust do not go through probate, saving your family time and legal costs.
Control Over Your Assets: You maintain full control while you’re alive and mentally capable.
Easily Updated: You can make changes as your life circumstances or wishes evolve.
Preserves Privacy: Unlike wills, living trusts are not public record.
❌ What Is the Downside to a Living Trust?
While revocable trusts offer many advantages, they also come with some downsides:
No Asset Protection: Because you still own the assets, they are not protected from creditors or lawsuits.
No Tax Benefits: Assets are still part of your taxable estate.
Higher Costs: A living trust cost is typically higher than a simple will, due to legal drafting and asset transfer steps.
Ongoing Maintenance: You must continually update and manage assets placed in the trust.
Limited Medicaid Planning: Assets in a revocable trust are still considered for Medicaid eligibility.
2. Irrevocable Living Trust
An irrevocable trust, on the other hand, cannot be changed, amended, or revoked after it’s been created—except under very specific legal circumstances. Once you transfer assets into the trust, they are no longer yours. Instead, they are owned by the trust.
✅ Benefits of an Irrevocable Trust
Lawsuit & Creditor Protection: Because you don’t own the assets, they can’t be touched in a lawsuit.
Estate Tax Reduction: Assets in an irrevocable trust are excluded from your estate, potentially reducing or eliminating estate taxes.
Medicaid Planning: These trusts can help individuals qualify for Medicaid or other government benefits by reducing countable assets.
Preserved Wealth for Beneficiaries: Assets are protected and distributed according to the trust terms, even after your death.
❌ Disadvantages of an Irrevocable Trust
Loss of Control: You no longer manage or have access to the assets once transferred.
Difficult to Amend: Changes usually require the consent of all beneficiaries or court approval.
Tax Complexity: Irrevocable trusts must file separate tax returns and may have different tax rules.
Legal Fees: These trusts often involve high initial and ongoing administrative costs.
Common Types of Irrevocable Trusts
Here are the three most widely used irrevocable trusts:
AB Trust: Designed for married couples to reduce estate taxes by splitting the trust into two parts after the first spouse dies.
Life Insurance Trust (ILIT): Removes life insurance from your estate to avoid taxes and control how the proceeds are distributed.
Charitable Trust: Enables you to donate assets to a charity, with options to give either before or after providing for your heirs.
Living Trust vs. Will: What’s the Difference?
One of the most common estate planning questions is: "Living trust vs will – which is better?"
| Feature | Living Trust | Will |
|---|---|---|
| Probate | Avoids probate | Goes through probate |
| Privacy | Private document | Public record once filed with court |
| Cost | Higher setup cost | Less expensive upfront |
| Control During Life | Full control (revocable trust) | No effect during your lifetime |
| Court Supervision | No supervision | Court oversees distribution |
| Asset Protection | Only with irrevocable trust | No protection from creditors |
While wills are simpler and cheaper to create, living trusts offer privacy, avoid probate, and provide more control over asset distribution—making them a preferred choice for many Florida residents.
How Much Does a Living Trust Cost?
The cost of a living trust can vary depending on complexity and legal fees, but in Florida. While it may cost more than a will upfront, a trust can save your loved ones thousands in probate fees later.
Work with Experienced Living Trust Attorneys in Palm Beach, Florida
At Doane & Doane, PA, we help you choose the right estate planning tools, whether it’s a revocable living trust, an irrevocable trust, or a will. We provide clear, personalized guidance to help you protect your assets and secure your legacy.
Serving clients across Florida’s Gold Coast and Treasure Coast—including Palm Beach, Broward, Miami-Dade, St. Lucie, and Martin counties—we bring decades of experience and a personal touch to every case.
Final Thoughts
Whether you’re wondering “What is a living trust?”, comparing revocable vs. irrevocable trusts, or asking “What is the downside to a living trust?”—the best step is to speak with a qualified estate planning attorney. We’re here to help you make informed, confident decisions for your future and your family.
