When you plan your estate, there are two kinds of trusts you can choose. One is a revocable trust, and the other is an irrevocable trust. The differences between these may seem fairly obvious, with one being able to be changed at any time and the other not able to be altered. However, there are some other differences to know.
First, understand the importance of a revocable living trust. A revocable trust can be changed at any time. So, if you make someone a beneficiary and change your mind, you can always disinherit them. Likewise, you can modify the terms of the trust if you so choose.
The reason some people choose an irrevocable trust over this is because the revocable trust's assets are considered to be your own assets. This means that estate taxes are still levied against them and creditors may still seek out their share of your assets. In a irrevocable trust, your assets are not considered to be yours, so they're better protected against creditors and estate taxes.
Irrevocable trusts are also beneficial if you're sure of who you want as beneficiaries and do not intend to change your mind. You can make the decision now and write it in a way that your loved ones may not be disinherited.
Your attorney can talk to you more about these options and what they mean for your personal situation. Every person's estate is different, but these trusts can help you make sure your beneficiaries get what you want them to have while protecting your estate from taxes.
Source: The Balance, "Revocable vs. Irrevocable Trusts," Julie Garber, accessed June 26, 2017