What is an irrevocable trust?

An irrevocable trust is a legal arrangement in which the grantor (the person setting up the trust) gives up control of assets or property by transferring them to a trustee, who then holds the assets in trust for the benefit of the grantor’s beneficiaries. An irrevocable trust is a permanent legal arrangement, meaning the grantor cannot change or negate the trust once it has been established. This also means that the assets are removed from the grantor’s estate and no longer count towards the grantor’s taxable estate. In California, an irrevocable trust must meet certain requirements in order to be established. These include selecting a trustee and beneficiaries, transferring the assets to the trust, and creating the trust document with details about the trust’s purpose and its management. The trust document must also specify the trust’s powers, responsibilities, and rights of beneficiaries and trustees. Once created, the trust is a separate legal entity, and the assets it holds may be used only for the benefit of its beneficiaries. The advantages of an irrevocable trust include tax savings, asset protection, and control over how the assets are used. The disadvantages include the lack of flexibility and control over the assets, and the fact that the grantor cannot change the trust once it has been established. It is important to consult an attorney before establishing an irrevocable trust in order to ensure it meets all legal requirements in California.

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What is an irrevocable trust?

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