All revocable trusts become irrevocable when the Grantor, the person who had the power to revoke it, becomes incapacitated or dies. At that point they need their own tax identification and must file their own tax return.
If you are a married couple, and one of you has survived the other of you, then you can decide if you want all of the assets to continue in a revocable trust or divide the assets and move some of them to an irrevocable trust.
Some people make the choice to divide the trust assets for tax reasons. Even if there isn't a tax reason, other people make the choice to divide the trust based on a desire to lock up the deceased spouse's assets as much as possible for their chosen beneficiaries and to protect it from the living spouse's creditors or bad influencers.
At the death of the surviving spouse, we have a similar decision to make. Some families prefer that the assets go outright to their beneficiaries, while other families want the assets to stay in a trust for a certain number of years or even for the beneficiary's entire lifetime. Some choose this for tax reasons, because the child has special needs, or simply because they want the child to benefit from protection against creditors, bankruptcy, and divorce.
We've created this video to help you choose what is right for your family.
