Florida Revocable Vs. Irrevocable Trusts: Which To Choose?

TL;DR:
Florida revocable and irrevocable trusts serve distinct purposes. Revocable trusts offer flexibility and probate avoidance but limited tax or asset protection. Irrevocable trusts provide stronger asset shielding and estate tax strategies but require giving up control. Residents of Boca Raton and Palm Beach County should weigh privacy, tax thresholds, and family needs before choosing the right structure under Florida law.

When setting up your estate plan in Boca Raton, choosing the right trust can feel like standing at a crossroads. Florida law offers two main options, revocable and irrevocable trusts, and the path you take depends on your goals.

Each trust type carries distinct benefits and trade-offs. Some prioritize privacy and flexibility. Others offer protection from lawsuits or reduce federal estate tax exposure. 

Knowing how these structures work under Florida law, especially for residents of Palm Beach County, can help you make a confident choice.

Overview Of Trusts Under Florida Law

Trusts are legal arrangements that let you transfer, manage, and distribute assets to beneficiaries. In Florida, they’re often used to avoid probate and keep family affairs private.

Both revocable and irrevocable trusts are used throughout Palm Beach County. The right fit depends on how much control you want to keep and what you’re protecting.

Revocable Trust (Living Trust)

Created during your lifetime, and can be changed or revoked at any time. You usually act as the trustee and beneficiary while alive. Assets inside avoid probate when you pass away.

Irrevocable Trust

Once created, you give up control, usually can’t revoke or modify it. A separate trustee manages assets for your chosen beneficiaries. Often used to minimize taxes or protect assets from lawsuits or long-term care costs.

Each trust begins with a written agreement that outlines who controls the assets, who benefits from them, and what happens when you die.

Revocable means control. Irrevocable means protection. Florida law supports both, depending on your goals.

Comparing Control & Flexibility

Many Boca Raton residents begin with a revocable living trust because it offers total control while you’re alive. You can buy, sell, or move assets without any restriction.

Advantages Of A Revocable Trust

A revocable trust offers flexibility and control. You retain the ability to amend or revoke it at any time, making it easy to adjust as your circumstances or wishes change. 

This type of trust also functions as a comprehensive blueprint for managing your assets both during incapacity and after death. It helps loved ones avoid court involvement. 

From a practical standpoint, revocable trusts are straightforward to maintain there’s no need for a separate tax ID or complicated tax filings while you’re alive.

Limitations

That said, revocable trusts have limitations. They offer no shield against creditors or lawsuits while you’re alive, and all trust assets remain part of your taxable estate. 

For clients focused on asset protection or estate tax reduction, a revocable trust may be just one part of the overall strategy. Irrevocable trusts, by contrast, are more rigid, but that rigidity is what provides strength.

Advantages Of An Irrevocable Trust

An irrevocable trust removes assets from your name, which can offer a layer of protection against creditors. These trusts may also reduce your estate tax exposure, critical if your estate nears or exceeds the federal exemption threshold. 

In Florida, irrevocable trusts are also frequently used as part of Medicaid planning, helping clients qualify for long-term care assistance without exhausting their life savings.

Limitations

The tradeoff is control. Once established, you cannot easily modify the terms of an irrevocable trust. You also relinquish direct access to the assets held inside, meaning a third-party trustee typically manages them. 

While this structure can feel restrictive, it’s the very reason irrevocable trusts offer protective and tax-saving benefits.

Control is revocable. Long-term security favors irrevocable trust. Which fits your situation best depends on your plans.

Tax Considerations In Trust Planning

Florida doesn’t impose a state estate tax or inheritance tax. But that doesn’t mean taxes won’t matter.

Federal Estate Tax

As of 2025, individuals can transfer up to $13.6 million tax-free. That exemption is scheduled to drop to approximately $6 million starting in 2026, barring legislative changes.

Revocable Trusts

Revocable trusts provide no income or estate tax advantage. They’re considered tax-neutral, and any income earned by the trust is reported on your personal tax return during your lifetime.

Irrevocable Trusts

Irrevocable trusts remove assets from your taxable estate. They can also shift income to lower-taxed beneficiaries or trust entities, but usually require a separate tax return, Form 1041, filed annually.

Example In Boca Raton

A Palm Beach couple with $12 million in real estate and brokerage accounts may face estate tax risk in 2026. Shifting $3 million into an irrevocable life insurance trust (ILIT) today can shelter those proceeds.

When tax planning is a priority, irrevocable trusts offer the strongest benefits under federal law.

Asset Protection Under Florida Law

Florida offers generous creditor protection, shielding your primary home (homestead). But most other assets can be vulnerable.

Revocable Trusts

Revocable trusts offer no protection from lawsuits or creditors during your lifetime. Any assets held in the trust remain reachable by your creditors as if owned directly by you.

Irrevocable Trusts

Assets inside an irrevocable trust are legally owned by the trust itself. This shields them from most creditors, making it a practical tool for physicians, business owners, or high-risk families.

Local Scenario

A retired physician in Boca Raton wants to preserve assets for children but fears future malpractice lawsuits. An irrevocable asset protection trust can safeguard wealth while allowing lifetime benefits to family members.

Peace of mind often comes from protection, not just planning.

Funding Your Trust Properly In Florida

Creating a trust is only half the battle. To make it work, you must fund it, meaning you transfer ownership of assets into the trust’s name.

How To Fund A Revocable Trust

Re-title bank accounts, investment accounts, and real estate. Name the trust as beneficiary on life insurance or retirement plans, where appropriate.

Irrevocable Trust Funding Tips

Use a deed to transfer real estate. Deposit or retitle financial accounts and file new ownership forms. Assigning life insurance policies to the trust for asset shielding.

What Happens If You Don’t Fund It?

Assets remain subject to probate. Intentions may not be honored if the title doesn’t match the trust’s instructions.

We often find beautifully drafted trusts that fail because they were never funded. Don’t let this happen to yours.

Updating Or Restating Your Trust 

Life changes. Your trust should, too. Florida law allows for updates through amendments or full restatements, especially for revocable trusts.

When To Update A Trust

• Marriage, divorce, or birth of a child.
• Purchase of property in another state.
• Federal or Florida law changes (e.g., estate tax threshold shifts).

How It Works

• Amending revocable trusts at any time with proper legal formalities.
• If too many changes are needed, a complete restatement may simplify things.
• Modifying irrevocable trusts, but this often requires court approval.

Your trust should grow with your life. Periodic reviews ensure it still reflects your goals and complies with Florida’s latest legal standards.

Trusts Glossary For Floridians