Almost every family that walks into this office needs a revocable trust and does not need an irrevocable one. Revocable means you keep control and can undo it. Irrevocable means you have genuinely given the property away, which is exactly why it does things a revocable trust cannot.
The giving-away part is not a technicality. It is the entire trade.
The core difference
| Revocable | Irrevocable | |
|---|---|---|
| Can you undo it? | Yes, any time | Generally no |
| Who controls the assets? | You | The trustee, who is usually not you |
| Creditor protection | None while you are alive | Potentially, depending on structure |
| Income tax | Your personal return | Often a separate trust return |
| Avoids probate | Yes, if funded | Yes |
| Typical use | Ordinary estate planning | Tax, benefits, or asset protection goals |
Why the estate tax pitch usually does not apply
The classic reason to use an irrevocable trust is to move assets out of a taxable estate. In 2026 the federal exemption is $15 million per person, made permanent by the 2025 tax act, and roughly $30 million for a married couple using portability. California imposes no state estate tax at all.
So for a family whose net worth is a house in Culver City and a retirement account, there is no estate tax to plan around. Selling an irrevocable trust to that family is selling a solution to a problem they will never have.
Where irrevocable trusts genuinely earn their keep
Special needs planning, where an inheritance would otherwise disqualify a beneficiary from SSI or Medi-Cal. Life insurance held outside the estate for a family that actually is near the exemption. And certain long-term care planning, which has its own lookback rules and needs a specialist.
What you give up
You give up the ability to change your mind. You typically give up the right to serve as your own trustee. You may give up the step-up in basis at death, which for a Los Angeles house bought in 1988 can be worth far more to your children than any tax the trust was meant to avoid.
That last point deserves emphasis. Handing a highly appreciated house to your kids during life, whether outright or through the wrong kind of trust, can leave them with a capital gains bill that dwarfs anything you saved.
“I get calls every few months from someone whose neighbor put their house in an irrevocable trust and now cannot refinance it. Undoing that, where it can be undone at all, costs more than doing it right the first time.”
Delia Vasquez-HartProposition 19, briefly
Any plan that moves a house to children has to account for Prop 19. The parent-child exclusion now applies only to a family home or family farm, the child must occupy it as their principal residence, and the exclusion is the current taxable value plus $1,000,000, adjusted biennially. Value above that gets added to the base.
There is also a filing deadline, three years from the transfer or before transfer to a third party, whichever comes first. Miss it and the exclusion is gone.
Questions we get asked
Can an irrevocable trust ever be changed?
Sometimes, through consent of the beneficiaries, a court petition, or a decanting provision written into the document. It is a legal proceeding, not an amendment form.
Does an irrevocable trust protect my house from a nursing home?
That is a specialized area with lookback periods and eligibility rules, and the answer depends heavily on timing. We refer that work out rather than dabble in it.
Will a revocable trust protect my assets from a lawsuit?
No. If you can take the assets back, so can a judgment creditor. Liability insurance is the tool for that risk, not a revocable trust.
Does a revocable trust become irrevocable at some point?
Yes, at your death. That is when the terms lock and the successor trustee's duties begin.
If someone has quoted you five figures for an irrevocable trust, bring me the proposal and I will tell you in the free consultation whether the problem it solves is one you actually have.