A trust fund is a legal entity created to hold and manage assets on behalf of one or more beneficiaries. It is established by a grantor, who transfers assets into the trust. The trust is managed by a trustee, who has a fiduciary duty to act in the best interests of the beneficiaries.

A revocable trust fund, also known as a living trust, is a trust that can be modified or revoked by the grantor during their lifetime. The grantor retains control over the assets in the trust and can make changes or terminate the trust at any time. In a revocable trust fund, the assets are not protected from creditors or estate taxes.

An irrevocable trust fund is a trust that cannot be modified or revoked by the grantor once it is established. The grantor gives up control over the assets in the trust and transfers ownership to the trust itself. In an irrevocable trust fund, the assets are generally protected from creditors and may provide tax benefits.

Some advantages of a revocable trust fund include flexibility, privacy, and the ability to avoid probate. Since the grantor can make changes or revoke the trust, they have control over the assets during their lifetime. The assets in a revocable trust are not subject to probate, which can save time and costs. Additionally, a revocable trust allows for privacy since it does not become a matter of public record.

An irrevocable trust fund offers several advantages, such as asset protection, estate tax planning, and Medicaid planning. Once assets are transferred to an irrevocable trust, they are generally protected from creditors. Additionally, assets in an irrevocable trust may be excluded from the grantor’s taxable estate, reducing potential estate tax liability. Irrevocable trusts can also be used for Medicaid planning, allowing individuals to qualify for government assistance while preserving assets for future generations.