• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
  • Services
    • Asset & Business Planning
    • Dental Practice Law
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid and Elder Law
    • SECURE Act
    • Special Needs Planning
    • Trust Administration
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medicaid Planning
    • Veteran’s Benefits
  • Resources
    • DocuBank
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder Law Reports
      • Elder Law Resources
        • Carmel, Indiana Elder Resources
        • Fishers Indiana Elder Law Resources
        • Greenfield, Indiana Elder Law Resources
        • Greenwood Elder Resources
        • Indianapolis Elder Law Resources
        • Lawrence Elder Law Resources
        • Plainfield Elder Resources
        • Zionsville Elder Law Resources
    • Estate Planning
      • Estate Planning Checkup
      • Estate and Gift Tax Figures
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Asset Protection Planning
        • Business Succession Planning
      • Elder Law
        • Medicaid
        • Medicaid Planning
        • Planning for Long-Term Care
      • Estate Planning
        • Avoiding Estate Taxes
        • Frequently Asked Questions for Families Without an Estate Plan
        • LGBTQ Estate Planning
      • Financial Planning
      • Incapacity Planning
      • Legacy Wealth Planning
      • Pet Planning
      • Probate
      • Power of Attorney
      • Trusts
        • Trust Administration
        • Serving as Executor
      • Wills
    • Newsletter
    • Pre Consultation Form
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Carmel, Indiana Probate Resources
        • Greenfield Probate
        • Greenwood Probate
        • Indianapolis Probate
        • Plainfield Probate
        • Indiana Probate
        • Zionsville Probate
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Areas We Serve
    • Boone County
      • Lebanon
      • Zionsville
    • Hamilton County
      • Carmel
      • Fishers
    • Hancock County
      • Greenfield
    • Hendricks County
      • Brownsburg
      • Plainfield
    • Johnson County
      • Franklin, Indiana
      • Greenwood
    • Marion County
      • Central Indiana
      • Indianapolis
  • Blog
  • Contact Us

Frank & Kraft, Attorneys at Law

Indianapolis Estate Planning Attorneys

CONNECT WITH US TODAY(317) 684-1100

Attend a Free Workshop
Home » Should I Use a Revocable or Irrevocable Trust?

Should I Use a Revocable or Irrevocable Trust?

September 1, 2015Estate Planning, Living Trusts

Should I Use a Revocable or Irrevocable Trust?

If you have not researched the subject extensively, you may assume that a trust is a single type of document that serves a universal set of purposes. In fact, this is not the case. There are various different types of trusts that can be used to satisfy different objectives, though some of them can accomplish multiple aims simultaneously.

One major difference between trusts is the right of revocation. You can revoke or dissolve some types of trusts, and there are also irrevocable trusts.

At first glance, you may naturally think that you would prefer a revocable trust, because you would have the power to dissolve the trust if your life circumstances change. Though this can be comforting, a revocable living trust may not be the right choice depending on your objectives.

The matter of ownership is an important legal concept. With a revocable living trust, you are retaining incidents of ownership, because you can rescind the trust at any time and take back direct personal possession of the property that was conveyed into it.

Because of the fact that you would be retaining incidents of ownership, a revocable living trust would not satisfy certain estate planning goals that some people have.

For example, asset protection and estate tax efficiency are important for some people. Assets in a revocable living trust would not be protected from lawsuit settlements or judgments, and they would be part of your estate for tax purposes.

There is also the matter of nursing home asset protection. The majority of elders will someday need help with their activities of daily living, and nursing homes and assisted living communities are extremely expensive. This type of care is considered to be custodial care. Medicare will pay for convalescent care after an injury or illness, but it will not pay for custodial care.

The Medicaid program does pay for long-term care. Since Medicaid is a need-based program,  you cannot qualify if you have significant assets in your own name. To react to this dynamic, you could potentially convey assets into a Medicaid trust. This would be an irrevocable trust, because assets in a revocable living trust would be countable for Medicaid eligibility purposes.

Value of Revocable Living Trusts

To this point, we have looked at some of the reasons why you may not want to use a revocable living trust. However, a revocable living trust can be the right choice for some people.

The fact that you do not lose control of the assets can be a positive depending on your objectives. Plus, you can control the actions of the trust while it is intact, because you can act as the trustee and the beneficiary.

You can include spendthrift protections if you do not want to allow for lump sum inheritances, and assets in a revocable living trust could be distributed to the beneficiaries outside of probate. This is a time-consuming and potentially expensive legal process.

Make Informed Decisions

As you can see, you have decisions to make when you are planning your estate. If you would like to discuss everything with a licensed professional, send us a message through this page to set up a free consultation: Indianapolis IN Estate Planning Attorneys.

  • Author
  • Recent Posts
Paul A. Kraft, Estate Planning Attorney
Paul A. Kraft, Estate Planning Attorney
Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms in Indiana in the area of estate planning as well as business and tax planning.

Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Paul A. Kraft, Estate Planning Attorney
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
  • What Is an Irrevocable Life Insurance Trust? - May 12, 2022
  • Dying Is Expensive – How Funeral Planning Can Help - May 10, 2022
  • Can the Proceeds of a Life Insurance Policy Be Paid to a Trust? - May 5, 2022

Other Articles You May Find Useful

estate planning questions
Top 5 Estate Planning Questions Answered
Titling Property – Rights of Survivorship
What happens after death
5 Things You Might Not Know About What Happens After Your Death
Covid
Estate Planning Lessons the Covid Pandemic Has Taught Us
What Is the Most Important Document in My Estate Plan?
Indianapolis Trust Lawyer
How to Guard Your Child’s Inheritance

Primary Sidebar

Frank & Kraft, Attorneys at Law

Download our free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Blog Subscription

Where We Are

Frank & Kraft Attorneys at Law
135 N. Pennsylvania Street Suite 1100
Indianapolis, IN 46204-2485
Phone: (317) 684-1100
Fax: (317) 684-6111

See Larger MapGet directions

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM
Friday8:00 AM - 5:00 PM

Map

frankkraft_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

Frank & Kraft Attorneys at Law
Attorney Advertisement

© 2022 American Academy of Estate Planning Attorneys, Inc.

© 2022 · American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy | Sitemap | Contact Us