Blind Irrevocable Trust vs. Blind Revocable Trust

Attribute	Blind Irrevocable Trust	Blind Revocable Trust
Control	No control by settlor once established	Settlor retains control and can make changes
Irrevocability	Cannot be changed or revoked	Can be changed or revoked by settlor
Asset Protection	Provides strong asset protection	Provides some asset protection
Tax Implications	May have tax advantages	May have tax implications upon revocation

Introduction

Trusts are a common estate planning tool used to manage assets and provide for beneficiaries. Two common types of trusts are blind irrevocable trusts and blind revocable trusts. While both types of trusts have their own unique attributes, it is important to understand the differences between them in order to make an informed decision about which type of trust is best suited for your needs.

Blind Irrevocable Trust

A blind irrevocable trust is a type of trust that cannot be modified or revoked once it is established. This means that once assets are transferred into the trust, the grantor no longer has control over those assets. The trustee of the trust is responsible for managing the assets and distributing them to the beneficiaries according to the terms of the trust agreement.

One of the key benefits of a blind irrevocable trust is that it provides asset protection for the grantor. Since the assets are no longer considered the property of the grantor, they are shielded from creditors and legal judgments. This can be particularly beneficial for individuals who are concerned about potential lawsuits or other financial liabilities.

Another advantage of a blind irrevocable trust is that it can help to reduce estate taxes. By transferring assets into the trust, the grantor can potentially lower the value of their taxable estate, which may result in a lower tax liability for their beneficiaries. Additionally, assets held in a blind irrevocable trust are not subject to probate, which can help to expedite the distribution of assets to beneficiaries.

However, there are also some drawbacks to consider when establishing a blind irrevocable trust. One of the main disadvantages is that the grantor loses control over the assets once they are transferred into the trust. This means that the grantor cannot change the terms of the trust or access the assets for their own benefit. Additionally, since the trust is irrevocable, any mistakes made in the trust agreement cannot be easily corrected.

Overall, a blind irrevocable trust can be a powerful estate planning tool for individuals looking to protect their assets and reduce their tax liability. However, it is important to carefully consider the implications of establishing this type of trust before making a decision.

Blind Revocable Trust

A blind revocable trust, on the other hand, is a type of trust that can be modified or revoked by the grantor at any time. This means that the grantor retains control over the assets held in the trust and can make changes to the trust agreement as needed. The trustee of the trust is responsible for managing the assets according to the grantor's instructions.

One of the main benefits of a blind revocable trust is the flexibility it provides to the grantor. Since the trust can be modified or revoked, the grantor has the ability to make changes to the trust agreement if their circumstances or wishes change over time. This can be particularly useful for individuals who want to maintain control over their assets while still providing for their beneficiaries.

Another advantage of a blind revocable trust is that it can help to avoid probate. Since the assets held in the trust are not considered part of the grantor's estate, they are not subject to the probate process. This can help to expedite the distribution of assets to beneficiaries and reduce the costs associated with probate.

However, there are also some drawbacks to consider when establishing a blind revocable trust. One of the main disadvantages is that the assets held in the trust are not protected from creditors or legal judgments. Since the grantor retains control over the assets, they are still considered part of the grantor's estate and may be subject to claims from creditors.

Overall, a blind revocable trust can be a useful estate planning tool for individuals who want to maintain control over their assets while still providing for their beneficiaries. However, it is important to carefully consider the implications of establishing this type of trust and to regularly review and update the trust agreement as needed.

Conclusion

In conclusion, blind irrevocable trusts and blind revocable trusts each have their own unique attributes and benefits. Blind irrevocable trusts provide asset protection and potential tax savings, but come with the drawback of losing control over the assets. Blind revocable trusts offer flexibility and the ability to avoid probate, but may not provide the same level of asset protection. Ultimately, the decision of which type of trust to establish will depend on the individual's specific goals and circumstances. It is important to consult with a qualified estate planning attorney to determine the best trust structure for your needs.