Irrevocable Trust

外汇网2021-06-19 14:16:12 140

A trust that can't be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the trust, effectively removes all ofhis or herrights of ownershipto the assets and the trust.

This is the opposite of a "revocable trust", which allows the grantor to modify the trust.

The mainreason forsetting up an irrevocable trust is for estate and tax considerations. The benefit of this type of trust for estate assetsis that it removes all incidents of ownership, effectively removingthe trust'sassets from the grantor's taxable estate. The grantor is alsorelieved of the tax liability on the income generated by the assets. While the tax rules will vary between jurisdictions, in most cases, the grantorcan't receive these benefits if he or she is the trustee of the trust.

The assets held in the trust can include, but are not limited to, a business, investment assets, cash and life insurance policies.

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