What is an irrevocable trust?

An irrevocable trust is a type of trust that becomes legally binding when it is created and cannot be changed or canceled without the permission of the beneficiary. This type of trust is typically used for asset protection and estate planning in California. The individual creating the trust, known as the Settlor, transfers the ownership of the assets from their own name to the trust. This means that the settlor no longer owns the assets and they cannot control them anymore. At this point, the trust becomes irrevocable. This means that it is permanent and cannot be changed or revoked after it is created. The trustee manages the trust assets on behalf of the beneficiaries, or the individuals who will benefit from the trust. The trust agreement outlines the specific instructions for how the trust assets should be managed, such as which assets will be distributed to which beneficiaries, how and when the distributions will be made, and how any disputes are settled. In California, an irrevocable trust can be used to pass assets on to beneficiaries while avoiding probate and estate taxes. The trust can also protect assets from creditors and lawsuits, as the assets are owned by the trust and not by the individual(s) creating the trust. However, once the trust is created and the assets are transferred, the trust is irrevocable, meaning that it cannot be changed or revoked.

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