I am frequently asked, “What are trusts? What are the different types of trusts?”
In our practice, they break into two broad categories: irrevocable trusts and revocable trusts. Revocable trusts are trusts that are designed to make the transaction—the passing of your wealth from you to your children at the time of your death—an easy transaction without involving the probate court. In revocable trusts, the objective is to avoid probate.
Irrevocable trusts, on the other hand, are used in our practice to initiate a gift from a senior citizen, usually, to a trust entity that is controlled by the senior citizen’s children. That is preferable to gifting the assets directly to the children because the children could have set-backs like divorce, loss of job, financial hardships; and generally the assets are going to be safer in the irrevocable trust.