When planning your estate in Minnesota, one of the most important decisions you may face is whether to establish a revocable trust or an irrevocable trust. Both options can help manage your assets and ensure they are distributed according to your wishes, but they serve different purposes and offer different levels of flexibility and protection.



Revocable Trusts

A revocable trust, also called a living trust, allows you to maintain control over your assets during your lifetime. You can make changes, add or remove assets, and even dissolve the trust if your circumstances or wishes change. This type of trust also helps avoid probate, making the transfer of assets to beneficiaries smoother and more private. However, since the trust remains under your control, assets are still considered part of your estate for tax and creditor purposes.

Irrevocable Trusts

An irrevocable trust, as the name suggests, cannot be changed or dissolved once it is created, except under very limited circumstances. By giving up control, you can protect assets from creditors and potentially reduce estate taxes. This makes irrevocable trusts a strong tool for long-term planning, asset protection, and Medicaid eligibility considerations in Minnesota. However, the lack of flexibility can be a significant drawback for those who anticipate changes in their financial situation or family dynamics.

Choosing the Right Trust in Minnesota

The right choice depends on your goals. If you value flexibility and control during your lifetime, a revocable trust may be the best fit. If asset protection, tax benefits, or Medicaid planning are top priorities, an irrevocable trust may provide stronger advantages.

At Holker Law Offices, PLLC, we can help Minnesota residents evaluate their financial and family needs to determine which trust option aligns with their estate planning goals.