Should you get an irrevocable trust?
Most people who think they need an irrevocable trust actually don’t, and getting this wrong can mean permanently losing control of your assets with very little to show for it. For the vast majority of Georgia families, a revocable living trust does everything you need: it avoids probate, protects your family during incapacity, and keeps you in the driver’s seat. This article breaks down exactly how both types of trusts work, when an irrevocable trust doesmake sense, and how to figure out which type of trust is right for you.
“Do I need a revocable or irrevocable trust? And what’s the difference?” I hear from a lot of people who are already convinced they need an irrevocable trust, usually because they read something online or heard it from a friend at a dinner party.
But the vast majority of people, including most high-net-worth property owners and business owners in Georgia, actually need a revocable living trust, not an irrevocable one. Irrevocable trusts are powerful tools for very specific situations, but they come with trade-offs that most people don’t fully understand until it’s too late to undo them.
This article explains exactly what each type of trust does, why irrevocable trusts have become so overhyped, what can go wrong when people rush into one, and how to figure out which structure is actually right for your situation.
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Why is everyone suddenly talking about irrevocable trusts?
Let me give you some context, because this misconception doesn’t come from nowhere. In recent years, financial content creators, real estate influencers, and even some well-meaning financial advisors have promoted irrevocable trusts as the gold standard of asset protection. Just the word “irrevocable” sounds serious, like you’ve really locked things down.
There’s also a specific tax planning context that made irrevocable trusts feel highly relevant: the pending “sunset” of elevated federal estate tax exemptions. For years, wealth advisors were urging high-net-worth clients to act before exemptions dropped, an urgency that felt real before the Big Beautiful Bill raised those exemptions. Irrevocable trusts were considered by some to be a primary tool for locking in high exemption rates before they were scheduled to sunset.
But that message spread to a wider audience than it was useful for, leaving people with a pervasive myth that irrevocable trusts are better for anyone with assets like rental property. This myth has sent a lot of people down an expensive and unnecessarily complicated path. (Keep reading to make sure you’re not one of them!)
As we now know, even that original use case is no longer a factor. As of January 1, 2026, the federal estate tax exemption was permanently raised to $15 million per individual (or $30 million per married couple), indexed for inflation going forward. For the vast majority of Georgia families, federal estate tax is no longer a pressing concern.
What is a revocable living trust?
A revocable living trust is a legal document that holds your assets during your lifetime and transfers them to your chosen beneficiaries when you die, without going through probate.
Here’s what makes it “revocable”: You can change it any time. You can add or remove assets, update beneficiaries, change successor trustees, or revoke the trust entirely if your circumstances change. You remain in complete control.
In most revocable trust arrangements, you are simultaneously the grantor (the person who creates the trust), the trustee (the person who manages it), and the primary beneficiary (the person who benefits from it). During your lifetime, you fill all of these roles at once. You still manage your accounts, buy and sell property, and live your life exactly as before. The trust is essentially invisible until you die or become incapacitated.
What a revocable living trust does for you:
- Avoids probate: Assets held in the trust transfer directly to your beneficiaries without probate court involvement. In Georgia, probate can be a lengthy, public, and expensive process, but a trust keeps your estate private and out of probate.
- Protects against incapacity: If you become unable to manage your affairs due to illness or injury, your successor trustee can step in immediately.
- Your heirs get a step-up in basis: For appreciated assets like real estate or investments, this can eliminate a significant capital gains tax bill that would otherwise come due if your heirs sell these assets.
- Gives you control over how and when heirs inherit: You can specify that children receive assets in stages (say, one-third at 25, one-third at 30, and the remainder at 35), rather than a lump sum at 18.
- Keeps your affairs private: Unlike a will, a trust doesn’t become public record when you die.
- Works seamlessly with your life: There are no separate tax filings, no restrictions on what you can do with your assets, and no third-party approval required for any financial decisions.
What a revocable living trust does NOT do:
- Protect your assets from creditors during your lifetime: Because you retain full control, the law treats the trust’s assets as your own for creditor purposes.
- Reduce your taxable estate for federal estate tax purposes: Though, as noted above, this matters to very few Georgia families at the current exemption levels.
What is an irrevocable trust?
An irrevocable trust is a legal arrangement in which you permanently transfer ownership of assets to the trust. You give up the right to take them back, modify the terms, or serve as your own trustee.
Once it’s signed and funded, the trust operates independently of you. The assets are no longer legally yours, which is precisely what makes irrevocable trusts useful in certain situations (creditors generally can’t reach what you don’t own) and potentially catastrophic in the wrong ones.
In other words, “irrevocable” is not marketing language. It means exactly what it says.
When you transfer assets into an irrevocable trust, you are giving those assets away, legally and permanently. You typically cannot serve as your own trustee. You grant control to someone else, and the trust operates according to the terms you set at the time of creation. In exchange for giving up that control, you get legal separation from those assets. Exchanging control for protection is the core of what makes irrevocable trusts so powerful (and dangerous).
When does an irrevocable trust make sense?
Irrevocable trusts are not bad. They’re just highly specific tools, useful in highly specific situations. Here are the scenarios where they’re generally useful:
1. Estates with potential federal estate tax exposure
If your individual net worth is approaching or exceeding $15 million (the current federal exemption), irrevocable trusts become relevant for estate tax planning. Common structures include Spousal Lifetime Access Trusts (SLATs), Intentionally Defective Grantor Trusts (IDGTs), and Irrevocable Life Insurance Trusts (ILITs). These are sophisticated strategies that require a team of professionals (usually an estate attorney, a CPA, and a financial advisor) working together.
2. Irrevocable Life Insurance Trusts (ILITs)
Even at lower asset levels, if you have a large life insurance policy, an ILIT can keep the death benefit out of your taxable estate.
3. Special Needs Trusts
If you have a beneficiary with a disability who relies on government benefits like Medicaid or SSI, an irrevocable Special Needs Trust (SNT) allows you to leave them an inheritance without disqualifying them from those programs.
4. Medicaid planning
For individuals who anticipate needing long-term care and want to protect their assets from Medicaid spend-down requirements, certain irrevocable trusts can be part of a planning strategy, but strict look-back periods and rules vary by state. This is a specialized area that requires an elder law attorney.
What can go wrong with an irrevocable trust
In my 17+ years of practice, I’ve seen clients come in having already set up irrevocable trusts that were wrong for their situation. These conversations are always difficult, because there’s often very little I can do to fix it after the fact.
Here are the most common problems:
“I can’t change my beneficiaries.”
Life changes. Divorces happen, children become estranged, new grandchildren are born, and beneficiaries can pass away before you do. With a revocable trust, you simply update your documents and move on. With an irrevocable trust, changing beneficiaries may be impossible or require court intervention and unanimous consent from existing beneficiaries, which they’re not obligated to give.
“I named the wrong trustee and now I’m stuck.”
You can’t usually manage your own irrevocable trust as trustee, which means that someone else—a family member, a professional trustee, or a bank—is making decisions about your assets. If that relationship takes a wrong turn, your options are extremely limited.
“I gave away assets I needed.”
Life is unpredictable. When you transfer assets into an irrevocable trust, those assets are no longer available to you, regardless of unexpected events like medical emergencies or a business downturn. Clients who do this without fully internalizing that reality sometimes find themselves in genuinely difficult financial situations.
“My estate wasn’t actually big enough to need this.”
This is the most common scenario I see. Someone with a $2–$5 million estate might set up an irrevocable trust because they read that it was the “best” protection, but they give up control of meaningful assets and create unnecessary complexity when they would have been completely fine with a well-drafted revocable trust, a solid LLC structure, and proper insurance.
Revocable vs. Irrevocable Trusts: A Side-by-Side Comparison
| Consideration | Revocable Living Trust | Irrevocable Trust |
| Can you change it? | Yes, anytime | Generally no |
| Can you be your own trustee? | Yes | Usually no |
| Avoids probate? | Yes | Yes |
| Protects from creditors? | Generally no | Generally yes |
| Reduces taxable estate? | No | Yes |
| Separate tax filing required? | No (during your lifetime) | Yes |
| Flexibility for life changes? | Flexible | Rigid |
| Controls inheritance timing? | Yes | Yes |
| Protects incapacitated beneficiaries? | Yes (with proper drafting) | Yes |
| Works for special needs planning? | Limited | Yes (SNT) |
| Heirs receive step-up in basis? | Yes | Generally no |
What most Georgia families actually need
For the majority of my clients, including property owners, business owners, and professionals with estates up to ~$13 million, the best estate plan looks something like this:
- Revocable Living Trust: Holds your assets, avoids probate, protects your family if you’re incapacitated, gives heirs a step-up in basis, and grants you more control over your legacy.
- Pour-Over Will: A companion document that captures any assets outside the trust and “pours” them into your trust at death.
- Durable Powers of Attorney: Financial and healthcare, so the right people can act on your behalf if you’re unable.
- Advance Healthcare Directive: Specifies your medical wishes so your family isn’t left guessing.
- Proper beneficiary designations: For retirement accounts, life insurance, and any accounts with TOD (transfer-on-death) designations that need to align with your trust.
If you own rental property or a business, you likely also need LLCs properly coordinated with the trust.
FAQ: Questions Georgia families ask about trusts
Should I use an irrevocable trust to protect my assets from a lawsuit?
Maybe, but probably not the way you’re thinking. An irrevocable trust can create distance between you and your assets, but the transfer has to happen before a lawsuit is filed or even reasonably anticipated. Transferring assets after a claim arises can be challenged as a fraudulent transfer. For most people, a properly maintained LLC plus umbrella insurance is a more practical and flexible asset protection strategy.
What are the downsides of an irrevocable trust?
The biggest downsides are loss of control, inflexibility, and unintended tax consequences. You can’t serve as your own trustee, you generally can’t change beneficiaries or reclaim assets, and the trust may be subject to compressed federal income tax brackets on any income it generates. For clients who don’t genuinely need an irrevocable trust’s specific benefits, these are all costs without benefits.
Can an irrevocable trust be changed or broken?
In some circumstances, yes, but it’s difficult and not guaranteed. Options include a “trust decanting” (pouring assets into a new trust with updated terms), a judicial modification, or consent from all beneficiaries. Georgia has adopted limited trust modification statutes, but the process is time-consuming and expensive.
Is a revocable trust safe from creditors?
No. Because you retain full control of a revocable trust during your lifetime, creditors can generally reach those assets just as if you owned them outright. A revocable trust is not designed for asset protection; it’s designed for probate avoidance and incapacity planning.
Do I still need a will if I have a revocable trust?
Yes. I recommend what’s called a “pour-over will,” a simple document that directs any assets outside your trust at death to be transferred into it. Without it, assets titled in your personal name that you forgot to move into the trust would go through probate.
Is a living trust the same as a revocable trust?
Yes. “Living trust,” “revocable trust,” and “revocable living trust” are all the same thing. The terms are used interchangeably.
What happens to my revocable trust when I die?
At your death, the trust becomes irrevocable, meaning it can no longer be changed. Your successor trustee takes over, distributes assets to your beneficiaries according to the trust’s terms, and closes the trust.
Does a trust avoid all taxes?
No. A revocable trust is “transparent” for tax purposes, meaning that all income is reported on your personal return, and the trust’s assets are included in your taxable estate. It avoids probate, but not tax obligations. Irrevocable trusts can reduce your taxable estate, but they have their own tax filing requirements and often face less favorable income tax brackets.
How much does it cost to set up a revocable trust in Georgia?
Costs can vary depending on the complexity of your estate and what additional documents are included. A comprehensive estate plan with a revocable trust, pour-over will, powers of attorney, and healthcare directives is an investment, but it generally pales in comparison to the cost (and stress) of probate. Schedule a discovery call to learn more about our flat-fee pricing for different service levels.
The bottom line
Irrevocable trusts have their place. They’re genuinely valuable for specific, well-defined situations such as special needs planning and certain life insurance strategies. But they aren’t the “ultimate” protection for everyone, and walking into one without fully understanding the trade-offs is a mistake that’s very hard to undo.