The key difference is control. A revocable trust lets you change, update, or cancel it at any time. An irrevocable trust (one that cannot be changed) locks the terms in place. Once you set up an irrevocable trust and move assets into it, you usually cannot take them back or change the rules.
Most Arizona families use a revocable living trust for their estate plan. Irrevocable trusts are used for more advanced goals. Here is how they compare.
Revocable Trusts (Living Trusts)
A revocable trust, also called a living trust, is the most common trust in estate planning. Key features include:
- Full control. You stay in charge of all assets. You buy, sell, and manage things as you always have.
- Easy to change. You can swap out heirs, change trustees, add or remove assets, or update terms at any time.
- Can be canceled. You can end the trust if you choose.
- Skips probate. Assets in the trust bypass probate when you die.
- Covers you if you get sick. If you become too sick to manage your own affairs, your successor trustee can step in right away. No court is needed.
The trade-off is that a revocable trust does not shield your assets or cut taxes while you are alive. Since you keep control, the IRS treats the trust assets as yours. You file your normal tax return. Creditors can still reach the assets.
Irrevocable Trusts
An irrevocable trust has a different purpose. You give up ownership and control. Because of this, those assets are usually no longer part of your taxable estate. This can bring big benefits:
- Asset shielding. Assets in an irrevocable trust are usually safe from your creditors and lawsuits.
- Long-term care planning. Assets moved to this type of trust may not count for ALTCS (Arizona's Medicaid program). But there is usually a five-year look-back period.
- Estate tax savings. For larger estates, taking assets out of your taxable estate can lower or wipe out federal estate taxes.
- Passing wealth to future generations. These trusts can be set up to move wealth to grandchildren or later generations while cutting transfer taxes.
The main downside is the loss of control. Once assets are in an irrevocable trust, you usually cannot use them, change the heirs, or change the terms. This makes it a lasting choice.
Side-by-Side Look
Here is a quick way to compare the two types:
- Can you change it? Revocable: Yes, anytime. Irrevocable: Usually no.
- Do you keep control? Revocable: Yes. Irrevocable: No.
- Does it skip probate? Both: Yes, for assets in the trust.
- Does it shield assets from creditors? Revocable: No. Irrevocable: Usually yes.
- Does it cut estate taxes? Revocable: No. Irrevocable: It can, for larger estates.
- Does it help with Medicaid planning? Revocable: No. Irrevocable: It can, with proper timing.
Which Type of Trust Do You Need?
For most Arizona families, a revocable living trust is the right pick for basic estate planning. It lets you manage your assets, update your plan as life changes, and skip probate when you die.
Irrevocable trusts are used in specific cases:
- Your estate is above the federal estate tax limit ($13.99 million per person in 2025)
- You need to plan for long-term care or ALTCS
- You want to shield assets from future creditors or lawsuits
- You are setting up a special needs trust for a family member with a disability
Many estate plans include both types. For example, a revocable trust handles your main estate plan. A separate irrevocable trust covers a specific goal like asset shielding or tax planning.
For a broader look at how trusts compare to wills, read our guide on trusts vs. wills in Arizona. At RJP Estate Planning, attorney Clint Smith and our team help Arizona families find the right trust for their goals.