What is an irrevocable trust?
An irrevocable trust is a legal arrangement where an individual or group of individuals, known as a trustor, transfers ownership of their property or assets to an appointed trustee. This can be for a range of reasons, such as reducing their taxable estate or setting aside funds for a specific purpose. The trustor gives up all legal rights over the trust and the assets it contains. In California, an irrevocable trust is a powerful estate planning tool. It can protect assets from creditors and help to avoid probate when the trustor passes away. The trustor’s legal right to change the terms or revoke the trust is completely eliminated. This makes the trust irreversible and permanent. As such, it provides a high level of protection for the assets and they cannot be taken back. In addition to protecting assets, an irrevocable trust can also be used to set conditions as to how the assets are managed and/or distributed. The trustor can set conditions that must be met before any funds can be dispersed, such as beneficiaries reaching a certain age. This is beneficial for ensuring that assets are used for their intended purpose. Overall, an irrevocable trust is a legally binding arrangement where the trustor transfers ownership of their assets to an appointed trustee and any legal rights to the trust are eliminated. This type of trust is commonly used in California for estate planning purposes, such as protecting assets from creditors and avoiding probate.
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