What is an irrevocable trust?

An irrevocable trust is a type of trust which, once set up, cannot be modified or dissolved. In California, this type of trust is typically used for estate planning and asset protection. An irrevocable trust can be created by a person (the grantor) and can be used to assign their property to the trust. The trust is then managed by the trustor, who is responsible for managing the trust and distributing the assets within it to the trust’s beneficiaries. The trustor is able to create specific guidelines for the management of the trust, such as a pension plan, charitable gifting, etc. The trust beneficiaries can be anyone, including individuals or organizations. The trustor creates the trust with the intention that after his/her death, the trust will continue to manage its assets and distribute them according to their wishes. Irrevocable trusts generally require the trustor to relinquish control of the trust, meaning they are no longer able to modify or dissolve the trust. At the same time, an irrevocable trust also provides protection from taxes and creditors. Since the trustor is no longer in control, the trust is typically not subject to estate taxes or creditors’ claims. This type of trust also prevents the trustor’s assets from being seized by creditors in the event of bankruptcy or other financial hardship. Ultimately, an irrevocable trust is an effective way of protecting assets and ensuring that the grantor’s wishes are honored even after their death.

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