This is a very common question in estate planning. The answer depends on the type of trust in which you transfer your assets.
Most people transfer assets to a revocable living trust. Transfers to a revocable living trust provide no barriers to assets going into (or out of) the trust. However, transfers to irrevocable trusts have substantial restrictions on how the grantor can get assets out, if any.
For most revocable living trusts, after the death of a spouse (or if it’s a single individual, after the death of an individual) the trust will become irrevocable. After that point, the trust instrument will dictate very precisely how assets are to come out of the trust. However, during a grantor’s lifetime, while the trust is revocable, there are no restrictions.
Irrevocable trusts carry a different purpose. The trust instrument will dictate how assets come out of the trust. A grantor must be very careful when transferring assets into the trust that they understand exactly how the assets will be distributed. It’s important to make sure that if the grantor wants to reserve the right to retrieve assets from the trust, that their estate planning attorney understands that goal.
