A trust is a legal agreement that places your assets in the care of someone else, primarily for the purpose of managing money and property after you die. There are two main types of trust: revocable and irrevocable. As the names imply, a revocable trust is a trust whose terms can be changed, while an irrevocable trust is one whose terms are unchangeable. There are benefits and drawbacks to both.

A Tampa CPA from Reliance Consulting, LLC, can help you determine whether a will or a trust is the better option as you make plans for the safekeeping of your assets and protection of your beneficiaries after you’re gone. Should you decide to go the trust route, you’ll want to know which type of trust is better for you. Much depends on your short-term and long-term goals, but in general, your choice will come down to a revocable or irrevocable trust. Here are a few basic differences between the two:

• Revocable trusts avoid probate because assets are transferred to the trustee during your lifetime. The trustee has immediate authority to manage assets upon your death, with no need for a court appointment. This lowers costs of administering your estate and eliminates potential probate delays.
• A revocable trust becomes irrevocable when it no longer reports income under your social security number, either upon your death or for any other reason. Assets in an irrevocable trust are not subject to estate taxes when the grantor dies, and beneficiaries are protected from creditor lawsuits.

Since opening our doors in 1984, Reliance Consulting has helped thousands of individuals in the Tampa Bay region establish sound estate plans, including the formation of trusts or the drafting of wills. Contact Reliance today to learn more about estate planning or for a complimentary financial health checkup.