What is the difference between an irrevocable trust and a revocable trust?

An irrevocable trust and a revocable trust are two common forms of asset protection used in North Carolina. The main difference between the two is that an irrevocable trust is a legal agreement that the trust creator cannot change or cancel once it has been established. Once an irrevocable trust is created, the trust creator no longer has control over the assets and property that have been placed in the trust. On the other hand, a revocable trust is a trust that can be modified or revoked at any given time by the trust creator. The primary reason for using an irrevocable trust in North Carolina is to protect assets and property from being included in the trust creator’s estate. When assets and property are placed in an irrevocable trust, they are not subject to the claims of creditors. In other words, creditors are not able to pursue the assets and property that are held in the trust, providing greater protection to the trust creator and their assets. In contrast, a revocable trust does provide some protection, but it is not as protective as an irrevocable trust. Assets and property placed in a revocable trust can be modified or revoked at any given time by the trust creator, which means they retain control over the assets and property in the trust. However, if the trust creator is sued and the court finds in favor of the plaintiff, the assets and property in the revocable trust can be vulnerable to creditors. Ultimately, North Carolina residents should consider the form of asset protection best suited to their needs, whether it be an irrevocable or revocable trust.

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What is the difference between an irrevocable trust and a revocable trust?

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