Key Takeaways
Start with a revocable living trust when the family owns a home and has children under 18.
- Start with a revocable living trust when the job is a house, minor children, and a plan you can still amend. The IRS treats every revocable trust as a grantor trust, so the income stays on your return. Section 2038 keeps the assets in the gross estate while you can still revoke the trust.
- For deaths in 2026 the IRS basic exclusion amount is $15,000,000. Form 706 is required when the gross estate, increased by adjusted taxable gifts and the specific gift tax exemption, exceeds that filing threshold. A surviving spouse can use a deceased spouse's unused exclusion only if the election is made on a timely estate tax return.
- An irrevocable life insurance trust is the pick when a policy would otherwise be included under section 2042. A reversionary interest is an incident of ownership only if it exceeds 5 percent of the policy value immediately before death.
- A third-party special needs trust holds a parent's assets for a disabled beneficiary. SSA says the self-settled trust rules do not apply when the trust is funded only with someone else's assets. A trust funded with the beneficiary's own money is a different instrument, and 42 USC 1396p(d)(4)(A) adds a Medicaid payback rule for that form.
- A charitable remainder trust is irrevocable, and the IRS says the assets cannot be taken back. The payout is at least 5 percent and no more than 50 percent, the term is a life or up to 20 years, and the charitable remainder must be at least 10 percent of the initial value.
Read what a living trust does and the funding steps before you compare the irrevocable types.
What a trust actually is (and what it is not)
A trust splits holding title from receiving the benefit. The trust reaches only assets transferred to the trustee.
The settlor signs it. The trustee holds the property. The beneficiary is the person the trustee serves. The trust reaches only assets transferred to the trustee, by a deed, a retitled account, or a beneficiary form. A signature on an empty schedule does nothing. This site's funding guide states that limit directly: a trust controls only what you put in it.
A trust is not a will. A will can name a guardian for a minor child and can give away property still in your name. That property is a probate matter unless title or a beneficiary form already moved it. A trust is not an income tax eraser. The IRS says all revocable trusts are grantor trusts, and that a revocable trust may be revoked and is a grantor trust under section 676, so the income stays on your return. A trust is not, by itself, an estate tax exclusion. Section 2038 includes property you transferred if, at death, you still hold a power to alter, amend, revoke, or terminate who enjoys it.
A trust is not the annual gift tax exclusion either. For 2026 gifts that exclusion is $19,000 per donee. If you can undo the trust, section 676 is the income tax rule. If you cannot, sections 2036 and 2038 ask whether you kept the income, the use, or the right to name who enjoys the property. The dollars on this page are IRS figures: a $15,000,000 basic exclusion for 2026 deaths, a $15,000,000 filing threshold, a 40 percent top rate, and the $19,000 gift exclusion.
How We Ranked These Trust Types
Each row is scored on probate, estate tax, asset protection, whether you can still change the trust, and whether this desk posts a price.
The five criteria are the same for every row. A figure appears only when a statute, an IRS page, or a page on this site states it.
- Avoids probate, yes or no. Probate here means a court process for property still titled in the decedent's name. This site's living trust guide states that assets titled in the trust pass outside that process, and that property you never moved can still be a probate matter. The same yes or no is applied to each irrevocable type: yes only for assets actually transferred to the trustee, or for insurance payable to the trustee rather than to the estate.
- Estate tax treatment. The tests are sections 2036, 2038, 2042, and 2035, plus the IRS basic exclusion amount. For deaths in 2026 that amount is $15,000,000. The IRS estate tax page uses the same $15,000,000 as the 2026 filing threshold. The IRS estate and gift tax update states that the top rate, after the 2013 increase, is 40 percent. Section 2001(c) states the schedule: over $1,000,000, the tentative tax is $345,800 plus 40 percent of the excess over $1,000,000.
- Asset protection level. There is no federal score that ranks these trusts as high, medium, or low. The revocable row uses this site's published line: the trust does not shield assets from your creditors while you can revoke it. The charitable remainder row uses the IRS statement that the donor cannot take the assets back.
- Can you change it. Revocable means you can amend or revoke while you are able. Irrevocable means you cannot. The IRS states both definitions, and it states that charitable remainder trusts are irrevocable.
- Typical setup complexity. The measure used here is a posted price. This desk posts the living trust packet at $349, paid once, and the counsel desk introduction at $790, paid once. The $790 price is an introduction to an attorney. It is not a drafting fee.
The Best Trust Types in 2026
Five types cover a home with minor children, a blended family, a taxable estate, a beneficiary on public benefits, and a charitable gift. The revocable living trust is first.
It is the only type this desk sells as a standard packet, and the site's machine file states that most households under the basic exclusion should not buy an irrevocable tax package. The irrevocable types are counsel work. Each write-up uses the same five criteria, and it leaves a figure unstated when no source gives it.
1. Revocable living trust, best for a young family with a home and minor children
A revocable living trust is signed during life. The IRS says all revocable trusts are grantor trusts and points to section 676 for the power to revoke. You report the income on your own return. This site's tax guide adds the filing detail: while you serve as your own trustee, the trust usually does not file a separate return or need its own tax number. That is income tax, not an estate tax exclusion.
Probate follows title. The living trust guide states that assets titled in the trust pass outside probate. The trust does not cut estate tax on its own. It does not shield assets from your creditors, because you can revoke it and the law treats the assets as yours. It does not control assets you never moved, and it does not name a guardian. The guardian is named in the will. The statutes for that split, when the family owns a house and has children, are on will or living trust for a house and two children. The packet sold here is the trust, a pour-over will, and a funding list, posted at $349 and paid once.
Section 2038 includes a transfer when, at death, you still hold a power to alter, amend, revoke, or terminate who enjoys the property. For deaths in 2026 the basic exclusion amount is $15,000,000. A second exclusion of $15,000,000 reaches $30,000,000 only when both are available. The IRS does not publish a separate married exemption, and portability requires a timely Form 706.
Best suited for: Use it when the family owns a home, needs a guardian named in a will, and is not trying to move assets out of the taxable estate. Sign it and fund it before you pay for an irrevocable structure.
2. Irrevocable life insurance trust, best for a large policy you do not want in the taxable estate
Section 2042 includes life insurance in the gross estate in two cases. Proceeds receivable by the executor are included. Proceeds receivable by other beneficiaries are included if, at death, you possessed any incident of ownership, alone or with anyone else. A reversionary interest counts only if its value exceeded 5 percent of the policy immediately before death. An irrevocable life insurance trust is aimed at that second case: the trustee, not your estate, is the beneficiary, and you keep no incident of ownership.
Section 2035 can still include the proceeds if you transferred the interest, or gave up the power, during the three years ending on death and section 2042 would have included it had you kept it. The statute publishes no sample face amount, so this page states none. Probate is separate. This site's funding guide says a policy pays whoever is on the beneficiary form, so proceeds payable to the trustee are not payable to the estate.
The IRS says an irrevocable trust cannot be modified, amended, or revoked. The trust is not in the $349 packet. This site's tax guide calls it counsel work. The counsel introduction is $790, paid once.
Best suited for: Use it when a policy you own would be included under section 2042 and the estate may exceed the $15,000,000 basic exclusion. It is the wrong tool when the only goal is to keep a house out of probate.
3. Spousal lifetime access trust, best for a married couple making a lifetime gift
A spousal lifetime access trust is a planning name. The Internal Revenue Code does not use it, and no IRS form carries the initials. The structure is an irrevocable trust one spouse funds for the other. The donor is trying to complete a gift while leaving the spouse as beneficiary.
Section 2036 includes the property if you kept the income, the use, or the right to say who enjoys it. Section 2038 includes it if you can still alter, amend, revoke, or terminate that enjoyment at death. The Code publishes no safe-harbor percentage for this name. Assets actually transferred to the trustee are no longer in the donor's name, so they follow the funded-trust probate rule on this site.
Lifetime taxable gifts are added back on the estate tax return, and the unified credit then reduces the tax. The basic exclusion for 2026 deaths is $15,000,000. The 2026 annual gift exclusion is $19,000 per donee. The counsel introduction is $790, paid once.
Best suited for: Use it when a married couple has decided to make a lifetime gift and wants the other spouse as beneficiary. Use the counsel desk, because the Code does not supply a form.
4. Third-party special needs trust, best for a beneficiary who receives public benefits
SSA POMS SI 01120.200 describes a special needs trust, also called a supplemental needs trust, as a trust that may pay a disabled person's extra needs other than food, shelter, and health care that public assistance may cover. The family tool is the third-party form: a parent funds it, and the beneficiary does not.
SSA POMS SI 01120.201 says the self-settled rules do not apply to a trust funded solely with someone else's assets. If the beneficiary later adds their own assets, that portion follows the self-settled rules. 42 USC 1396p(d)(4)(A) is the first-party statute: assets of a disabled person under 65, established by that person, a parent, a grandparent, a guardian, or a court, with the state receiving what remains at death up to medical assistance paid.
Transferred assets are out of the parent's name for probate. Estate tax still turns on sections 2036 and 2038. The usual form is irrevocable. The counsel introduction is $790, paid once.
Best suited for: Use the third-party form when a parent wants to set money aside without putting it in the beneficiary's name. Use the payback statute only when the money is already the beneficiary's.
5. Charitable remainder trust, best for income now and a charitable gift later
The IRS page states the structure. The donor transfers assets into an irrevocable trust. The trust pays at least one living beneficiary for life, or for up to 20 years. The remainder goes to one or more qualified U.S. charities and must be at least 10 percent of the initial net fair market value. The IRS states that the assets cannot be taken back.
A charitable remainder annuity trust pays at least 5 percent and no more than 50 percent of the value at setup. A unitrust generally pays at least 5 percent and no more than 50 percent of the fair market value, valued each year. Lifetime transfers take carryover basis. The donor may get a partial charitable deduction for the charitable interest. Payments to the person who is not a charity are taxed as ordinary income, then capital gain, then other income, then corpus. The trust files Form 5227, and the beneficiary uses Schedule K-1 (Form 1041).
Funded assets are out of the donor's name for probate. The IRS also bars any payment to a noncharitable beneficiary beyond the annual amount.
Best suited for: Use it when the family wants a payout for life or for up to 20 years and a remainder of at least 10 percent for charity. It is a poor fit when you still need the power to take the assets back.
Side-by-Side Comparison
The revocable living trust is the only row with a posted packet price of $349. The irrevocable rows are counsel work at a $790 introduction.
The columns are probate, estate tax, asset protection, whether you can change the trust, and setup.
| Trust type | Avoids probate | Estate tax treatment | Asset protection | Can you change it | Setup complexity |
|---|---|---|---|---|---|
| Revocable living trust | Yes, for assets titled to the trustee. No, for assets left in your name. | Included under section 2038 while you can revoke it. 2026 basic exclusion: $15,000,000. | None from your creditors while you can revoke it. | Yes, while you are able. | Desk packet: $349 once. |
| Irrevocable life insurance trust | Yes, if proceeds are payable to the trustee and not to the estate. | Included under section 2042 if you hold an incident of ownership, or under section 2035 if transferred within three years of death. Reversionary interest counts only above 5 percent of policy value. | No | Not in the $349 packet. Counsel introduction: $790 once. | |
| Spousal lifetime access trust | Yes, for assets transferred to the trustee. | Outside the estate only if sections 2036 and 2038 do not apply. No IRS safe-harbor percentage is published. | No, if the gift is to stay complete. | Counsel introduction: $790 once. | |
| Third-party special needs trust | Yes, for assets transferred to the trustee. | Depends on retained section 2036 or 2038 powers. | Usual form is irrevocable. | Counsel introduction: $790 once. | |
| Charitable remainder trust | Yes, for assets transferred into the trust. | Partial charitable deduction for the remainder. Payout interest is taxed to the noncharitable beneficiary. | Donor cannot take the assets back. | No | Form 5227 each year. |
Which trust fits your situation
Match the trust to the job: a house and children, a lifetime gift, a policy, public benefits, or a charitable remainder.
| Situation | Trust that fits | What the cited rule does |
|---|---|---|
| Young family with minor kids | Revocable living trust | Funded assets pass outside probate. The guardian is named in the will, not in the trust. See will or living trust for a house and two children. |
| Blended family | Revocable living trust | You can still amend who receives which share. An irrevocable gift is harder to undo. |
| High net worth estate tax planning | Spousal lifetime access trust, or an irrevocable life insurance trust if the asset is a policy | A lifetime gift stays out only if sections 2036 and 2038 do not apply. A policy you still control is included under section 2042. |
| Special needs beneficiary | Third-party special needs trust | A parent's assets are not the beneficiary's assets. The Medicaid payback rule is for a first-party trust under 42 USC 1396p(d)(4)(A). |
| Charitable goals | Charitable remainder trust | Irrevocable. The charitable remainder must be at least 10 percent of the initial value. |
What results look like
A funded revocable trust changes probate for assets titled to the trustee. It does not change the 2026 Form 706 filing test of $15,000,000.
Example, built from the IRS rate schedule and the 2026 basic exclusion. Section 2001(c) says that when the amount is over $1,000,000, the tentative tax is $345,800 plus 40 percent of the excess over $1,000,000. The 2026 basic exclusion amount is $15,000,000. The excess of $15,000,000 over $1,000,000 is $14,000,000. Forty percent of $14,000,000 is $5,600,000. Add the schedule's $345,800 and the tentative tax on $15,000,000 is $5,945,800. That figure is the schedule applied to the exclusion amount. It is not a bill, and it is not stated here as the unified credit. The IRS says the unified credit reduces the tax. The filing table is separate: a 2026 estate files Form 706 when the gross estate, increased by adjusted taxable gifts and the specific gift tax exemption, exceeds $15,000,000, unless the estate files to elect portability.
The comparison table shows why the trust type does not change that filing test by itself. A funded revocable living trust still leaves the assets in the gross estate under section 2038, because you can revoke it. It does change probate for assets titled to the trustee. A second example uses only the life insurance statute, with no invented face amount. Section 2042 includes the amount receivable by the executor. If the trustee of an irrevocable life insurance trust is the beneficiary and you hold no incident of ownership at death, that section does not include the proceeds for other beneficiaries. If the transfer of those incidents happened during the three years ending on death, section 2035 can include the value section 2042 would have included.
FAQ
The short answers use the same IRS pages and statutes as the sections above.
What is the best online living trust for homeowners?
Compare the one-person posted price and the documents each company prints on its own page. Ordered by that one-person price, lowest first, the TaxFreeTrusts living trust packet is $349, paid once. TaxFreeTrusts publishes this page and sells that packet. Trust & Will posts the Trust Plan at $499 for one person and $599 for a couple. LegalZoom posts Basic Trust at $399 for one person and $499 for a couple, and Premium Trust at $549 for one person and $649 for a couple. Sign a deed to yourself as trustee and record it in the county where the home sits. California Probate Code section 19000 defines the trust estate as property titled in the trustee's name, and it defines the probate estate as the estate subject to administration.
How does a revocable living trust keep a house out of probate?
A revocable living trust holds the assets you title in the trustee's name, and the successor trustee handles those assets. Property still titled in your own name can be a probate matter. A pour-over will can send leftover assets into the trust, and those leftover assets may still pass through probate first.
What does a revocable trust change on the 2026 federal estate tax?
It does not remove the assets from your gross estate if you can still revoke the trust at death. Section 2038 includes property you transferred when you still hold a power to alter, amend, revoke, or terminate who enjoys it. For 2026 deaths the basic exclusion amount is $15,000,000, and the IRS filing table uses that same figure as the amount the estate must exceed before Form 706 is required.
How does an irrevocable life insurance trust change section 2042?
Section 2042 includes life insurance receivable by the executor, and insurance receivable by other beneficiaries if you hold an incident of ownership at death. A reversionary interest counts only when its value exceeds 5 percent of the policy immediately before death. If you transfer that interest during the three years ending on death, section 2035 can include the value that section 2042 would have included.
What is a spousal lifetime access trust in the tax code?
The Internal Revenue Code does not use that name and does not publish a form for it. The structure is an irrevocable trust for a spouse. Section 2036 includes the property if you keep the income or the right to say who enjoys it, and section 2038 includes it if you can still change the trust at death.
How does a special needs trust treat the beneficiary's own money?
A trust funded only with someone else's assets is a third-party trust, and SSA POMS SI 01120.201 says the self-settled trust rules do not apply to that trust. A trust that holds the disabled person's own assets and meets 42 USC 1396p(d)(4)(A) is for a person under 65, and the state must receive what is left at death up to the medical assistance paid. SSI still reads the trust terms under SSA POMS SI 01120.200.
What payout must a charitable remainder trust make?
The IRS says a charitable remainder annuity trust pays at least 5 percent and no more than 50 percent of the value when the trust is set up. A charitable remainder unitrust generally pays at least 5 percent and no more than 50 percent of the fair market value, valued each year. The remainder to charity must be at least 10 percent of the initial net fair market value, and the term is a life or lives, or a period of up to 20 years.
How do you get matched with a trust attorney here?
Open the planner on the counsel path. The counsel desk introduces you to an attorney. The posted price for that introduction is $790, paid once, and it is not a published fee for drafting the trust.
What about a GRAT, an IDGT, or a QPRT?
The site names those three in its machine file. This shortlist does not rank them. No posted packet price on this desk states a standard setup cost for any of the three.
Sources
The dollar figures above are on the pages in this list.
- IRS, tax year 2026 inflation adjustments. Basic exclusion amount $15,000,000 for estates of decedents who die in 2026. Annual exclusion for gifts in 2026: $19,000.
- IRS, Estate tax. 2026 filing threshold $15,000,000. Adjusted taxable gifts are added. Portability is an election on a timely Form 706.
- IRS, estate and gift tax update. Basic exclusion amount $15,000,000 for 2026. Annual exclusion $19,000 for 2026 gifts. Top rate stated as 40 percent. Portability election described.
- 26 USC 2001. Rate schedule. Over $1,000,000, tentative tax is $345,800 plus 40 percent of the excess.
- 26 USC 2036. Retained life estate, income, or right to designate who enjoys the property.
- 26 USC 2038. Power at death to alter, amend, revoke, or terminate.
- 26 USC 2035. Transfers and relinquished powers during the three years ending on death, including interests that section 2042 would have included.
- 26 USC 2042. Life insurance receivable by the executor, or receivable by others if the decedent held an incident of ownership. Reversionary interest threshold: more than 5 percent of the policy.
- IRS, trust scheme questions and answers. All revocable trusts are grantor trusts. A revocable trust may be revoked and is a grantor trust under section 676. An irrevocable trust cannot be modified, amended, or revoked.
- IRS, Charitable remainder trusts. Irrevocable. Payout 5 percent to 50 percent. Term of life or up to 20 years. Remainder at least 10 percent. Carryover basis. Form 5227. Schedule K-1 (Form 1041).
- 42 USC 1396p(d)(4)(A). First-party special needs trust: individual under 65 who is disabled, and state repayment up to medical assistance paid.
- SSA POMS SI 01120.200. Special or supplemental needs trust description, and third-party trust development.
- SSA POMS SI 01120.201. Self-settled trust rules do not apply to a trust funded solely with third-party assets.
- TaxFreeTrusts pricing. Living trust packet $349, paid once. Counsel desk $790, paid once, for an attorney introduction. Read October 26, 2026.
- LegalZoom living trust page. Read October 26, 2026. Basic Trust $399 for one person and $499 for a couple. Premium Trust $549 for one person and $649 for a couple. Trust estate plans start at $399. Premium attorney consultations renew at $199/year.
- Trust & Will pricing comparison. Read October 26, 2026. Trust Plan $499 for one person and $599 for a couple. The page also says the Trust Plan starts at $499.
- California Probate Code section 19000. Read October 26, 2026. Trust estate means property titled in the name of the trustee. Probate estate means the estate subject to administration.
- What a living trust does. Probate for funded assets, no creditor shield while you can revoke, guardian named in the will.
- How to fund a trust. The trust controls only what you put in it. A life policy pays the beneficiary form.
- Trusts and taxes. Grantor trust filing while you are trustee. Irrevocable life insurance trust called counsel work, not the $349 packet.
- Site machine file. Names ILIT, GRAT, SLAT, IDGT, CRT, and QPRT. States that most households under the basic exclusion should not buy an irrevocable tax package.
Get matched with a trust attorney
The counsel desk introduces you to an attorney for $790, paid once. That price is the introduction, and the attorney's drafting fee is separate.
The counsel desk is the attorney match on this site. Start the planner on the counsel path, and the desk introduces you to an attorney. The posted price for that introduction is $790, paid once. That price is not the attorney's fee to draft an irrevocable trust. Use the match when a large policy or an estate over the $15,000,000 basic exclusion is the reason you are here. Families who only need the revocable packet can start the planner for the living trust at the posted $349.