Revocable trusts vs. irrevocable trusts

Estate & Tax Attorney Stefanie Lipson shares advice on estate planning and explains the differences between revocable trusts and irrevocable trusts
The Differences Between Revocable Trusts And Irrevocable Trusts
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Revocable trusts vs. irrevocable trusts

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In general, there are two types of trusts. There are revocable trusts, also sometimes referred to as living trusts or family trusts. Then there are irrevocable trusts, which is totally different. Revocable trusts are used for an estate planning tool to provide how your assets are going to be distributed during your death, and how they are going to be administered for your lifetime. They are not really designed to be estate tax saving devices. Irrevocable trusts are an entirely different breed. When you establish an irrevocable trust, you are giving a gift to the beneficiaries of the trust, other than you. You potentially have to pay a gift tax when you transfer property to the trust. Once the trust has been established, you as the creator the trust, cannot change the terms of the trust. Irrevocable trust is often implemented because they are designed to save estate taxes for the creator when the creator passes away.

Estate & Tax Attorney Stefanie Lipson shares advice on estate planning and explains the differences between revocable trusts and irrevocable trusts

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Stefanie Lipson

Estate & Tax Attorney

Stefanie J. Lipson is an attorney in the Family Wealth Planning Group of Greenberg, Glusker, Fields, Claman, & Machtinger, LLP.  Stefanie’s practice focuses on comprehensive estate planning for high net worth individuals, family business succession planning, probate and trust administration and the law of tax exempt organizations.  Stefanie counsels her clients with a holistic approach to wealth transfer solutions, structuring plans to meet a family’s individual needs while addressing the complex estate, gift and income tax implications of wealth transfer.  In addition, consistent with Stefanie’s belief that the most effective estate planning begins early, Stefanie has developed an estate planning program designed specifically to meet the planning needs of young families as they encounter common life events. 

Stefanie’s unique approach and application of Trust and Estate law has been well acknowledged by the legal community.  She served as a panelist at the 2010 Southern California Tax and Estate Planning Forum in a discussion involving multijurisdictional issues in estate planning and has authored publications for The Los Angeles Daily Journal and The Recorder.  Stefanie has been listed in Southern California Rising Stars each year since 2009.

Stefanie received her Bachelor of Arts in 2003 from University of California Los Angeles, graduating magna cum laude with the distinction of departmental honors and a member of Phi Beta Kappa.  Stefanie received her J.D. from the University of Southern California Law Center in 2006.  Following her graduation from USC, Stefanie clerked for the Honorable Fred Keiser, Jr. in the New Jersey Superior Court, Family Law Division.  During her time with the court, Stefanie also served as a court appointed mediator for small claims civil matters. 

In furtherance of her estate planning work, Stefanie is currently pursuing a Master of Laws in Taxation (LL.M.) from New York University School of Law.  Stefanie’s studies at NYU focus on estate, gift and income tax matters relating to wealth succession planning and family business ownership.

Stefanie lives in Los Angeles, with her husband Marc and their new son Noah, whom she regards as her greatest achievement.

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Transcription: 
In general, there are two types of trusts. There are revocable trusts, also sometimes referred to as living trusts or family trusts. Then there are irrevocable trusts, which is totally different. Revocable trusts are used for an estate planning tool to provide how your assets are going to be distributed during your death, and how they are going to be administered for your lifetime. They are not really designed to be estate tax saving devices. Irrevocable trusts are an entirely different breed. When you establish an irrevocable trust, you are giving a gift to the beneficiaries of the trust, other than you. You potentially have to pay a gift tax when you transfer property to the trust. Once the trust has been established, you as the creator the trust, cannot change the terms of the trust. Irrevocable trust is often implemented because they are designed to save estate taxes for the creator when the creator passes away.