2000 Alameda de Las Pulgas, Suite 250, San Mateo, CA 94403-1271 • Phone 650-341-2900
Providing Litigation, planning and transactional services

San Mateo County Lawyers Helping You Decide Between Revocable and Irrevocable Trusts

Receive trusted advice on choosing the classification of trust that best suits your needs

Deciding between a revocable or irrevocable living trust can be difficult. Revocable trusts are more flexible and allow the settlor — the person who creates a trust — continued access to the trust property. However, irrevocable trusts can have tax and protective benefits that revocable trusts do not have. At Fox, Shjeflo, Hartley & Babu LLP, our San Mateo County trust lawyers can analyze your situation and your goals to determine what type of living trust best serves your needs.

Benefits of a revocable trust

A revocable trust works much like any other classification of trust. With the help of a San Mateo County living trust attorney, a settlor creates a trust that designates a trustee and beneficiaries. The trustee manages the funds for the benefit of the beneficiaries in accordance with guidelines established in a trust. The advantage is that the settlor can modify or revoke a revocable trust at any time, allowing him or her to take back the property in the trust effectively should he or she decide to do so.

The following disadvantages do exist, however, with revocable trusts:

  • Revocable trusts do not have the tax benefits of many irrevocable trusts.
  • The settlor usually pays personal income tax on any trust income in much the same way he or she would if the trust did not exist.
  • Because the settlor maintains control over the property, a revocable trust cannot protect assets from creditors.

Benefits of an irrevocable trust

The obvious disadvantage of an irrevocable trust is the lack or flexibility. To establish an irrevocable trust, the settlor must completely and permanently surrender control over the trust property. This can be a big decision and you should not make it without first consulting a San Mateo County trust attorney.

Conversely, irrevocable trusts offer the following advantages that revocable trusts do not offer:

  • Many irrevocable trusts pay income tax as a separate entity.
  • Because the settlor often does not pay personal income tax on this trust income, a settlor can, in some cases, use an irrevocable trust to move to a lower tax bracket.
  • Unlike revocable trusts, settlors can use an irrevocable trust to protect assets from creditors. This may not always be the case, however, as such transfers must be done in good faith under the California version of the Uniform Fraudulent Transfers Act (UFTA).

The skilled attorneys at Fox, Shjeflo, Hartley & Babu LLP can, in many cases, help clients protect assets from future claims.

A San Mateo County trust attorney can help you plan for your financial future

Whether you are estate planning or establishing a structured gift for loved ones or charitable causes, a trust lawyer from Fox, Shjeflo, Hartley & Babu LLP can help. Our San Mateo trusts attorneys have helped clients throughout Northern California, San Francisco, the Silicon Valley, San Mateo County, and the San Francisco Peninsula reach their financial and estate planning goals. Conveniently located at the intersection of Route 92 and U.S. 101, we offer evening and weekend appointments as needed. For a complimentary consultation, contact us today at (650) 341-2900 or leave a brief message on our contact page.

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Fox, Shjeflo, Hartley & Babu LLP
2000 Alameda de Las Pulgas, Suite 250
San Mateo, CA, 94403-1271 USA