The single most consequential design choice in trust drafting is whether the grantor keeps the power to revoke. A revocable trust lets the grantor amend or terminate at will, but because the grantor retains control, the IRS treats the assets as still belonging to the grantor for income and estate tax purposes. An irrevocable trust surrenders that control — and in exchange, the assets leave the grantor's taxable estate.

The trade-off is stark: flexibility versus protection. Once irrevocable, the grantor generally cannot take the assets back, which is precisely why creditors and estate tax collectors cannot reach them.

Revocable: grantor pays income tax, assets in estate, no creditor shield
Irrevocable: trust pays income tax (or distributes), assets outside estate, strong creditor shield
Hybrid: intentionally defective grantor trusts keep grantor income tax while removing estate inclusion

Feature	Revocable	Irrevocable
Can grantor change terms?	Yes	No
Included in taxable estate?	Yes	No
Creditor protection	None	Strong