What is a grantor trust?
A grantor trust is a type of trust that is created in California according to inheritance law. It is a trust in which the grantor of the trust, also known as the settlor or trustor, is also the beneficiary of the trust. This means that the grantor can receive payments and use the resources of the trust, but also have control over how the trust assets are managed. The grantor can use the trust to protect their assets from creditors or taxation, and to ensure that their assets are passed on to their intended beneficiaries. The trust can also be used to protect assets from claims of creditors, taxes, or estate planning purposes. Grantor trusts are commonly used in estate planning because they allow the grantor to transfer their assets before death without having to go through the probate process. This can save time and money, as the probate process can be long and expensive. In California, grantor trusts allow the grantor to control the trust assets and make sure that their wishes are followed. The grantor has to make sure that the trust assets are managed according to the terms of the trust and the law. It is important to note that the grantor can only manage the trust assets for the benefit of the intended beneficiary and not for the personal benefit of the grantor.
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