Key Differences Between Revocable and Irrevocable Trusts

If you are thinking about estate planning for the first time, you have probably heard of trusts but may not be sure how they work or which one is right for you. Trusts help protect your assets and ensure they are passed on according to your wishes, but the two main types—revocable and irrevocable—serve different purposes.

At Mulhall Withrow, we’re here to make estate planning easier. Below, we break down the key differences between these trusts so you can make informed decisions that fits your needs.

Revocable Trusts: Adaptability & Control

A revocable trust offers maximum flexibility, allowing you to retain control over your assets while maintaining the ability to refine and adjust your estate plan as circumstances evolve.

Key advantages of revocable trusts in Massachusetts include:

• Retained Authority: As the grantor, you may modify or dissolve the trust at any point during your lifetime.
• Seamless Adjustments: If you acquire new assets, have a new child, or want to change beneficiaries, you can do so at any time without complications.
• Probate Avoidance: In Massachusetts, probate can be time-consuming and costly. A revocable trust allows your assets to bypass probate and go directly to your heirs, which saves time, reduces costs, and maintains privacy.
• Efficient Taxation: The trust’s income is reported under your personal tax return, streamlining your annual income tax filing.

Irrevocable Trusts: Asset Protection & Tax Efficiency

An irrevocable trust, once created, cannot easily be changed or revoked. This type of trust is often used for protecting assets, reducing estate taxes, and ensuring long-term financial security for heirs.

Key considerations for irrevocable trusts in Massachusetts include:

• Creditor & Litigation Protection: Assets held within the trust are shielded from potential creditors and legal claims.
• Massachusetts Estate Tax Mitigation: With a state estate tax exemption significantly lower than the federal threshold, irrevocable trusts can be a critical tool for minimizing Massachusetts estate taxes. In 2025, the Massachusetts estate tax filing threshold amount is $2 Million and the federal exemption amount is $13.99 Million. 
• Multi-Generational Wealth Planning: An irrevocable trust enables structured wealth distribution, ensuring long-term financial security for heirs for high net-worth families.
• Distinct Tax Treatment: The trust has its own tax ID and is taxed separately, which can provide financial advantages depending on your situation.

Selecting the Right Trust Structure

Determining whether a revocable or irrevocable trust best aligns with your estate planning goals requires careful consideration of your financial landscape. Those valuing flexibility and control may find revocable trusts most advantageous, while those prioritizing asset protection and tax efficiency—particularly in light of Massachusetts’ estate tax laws—may benefit from an irrevocable trust structure. In many cases, both types are trusts are used in a single estate plan to achieve ideal outcomes depending on the client’s goals and wealth. 

Let’s Plan for Your Future

Choosing the right trust depends on your financial goals and family needs. At Mulhall Withrow, we provide tailored estate planning services designed to offer clarity and security. Let us assist you in building a strategy that safeguards your wealth, minimizes tax burdens, and gives you peace of mind for the future.

Contact us at info@MulhallWithrow.com or 781-381-5287 to consult with our attorneys at Mulhall Withrow. We're here to help!