How Does an Irrevocable Trust Work?
The Irrevocable Trust An irrevocable trust is an entity that is formed to leave money or assets to a beneficiary. Unlike a revocable trust, an irrevocable trust is permanent. Once it is formed, the granter can’t undo it. Any assets the granter puts into the trust, become the property of the trust. The trust states when the beneficiary receives control of the assets. Usually it is upon the granter’s death. Some irrevocable trusts specify a certain age that the beneficiary has to be to receive control of the assets. The trust can give over all of the assets at once to the beneficiary, or it can pay out a limited amount over a set amount of time. For instance, the trust could specify that once the beneficiary turns 21-years-old, he will receive $5,000 a month from the trust. Trustee A trustee is the person who manages the trust. In revocable trusts, the granter often acts as the trustee. In most states, a granter can not serve as a trustee for an irrevocable trust. Most irrevocable trusts
- Why is it better to have an irrevocable life insurance trust purchase alife insurance policy on the donor, rather than have the heirs themselves own a permanent life insurance policy with the premium paid by the heirs with gifts by the now- living donor?
- What are the considerations in establishing an irrevocable trust for the benefit of ones children or grandchildren?
- Can I add a new life insurance policy to an existing ILIT (Irrevocable Life Insurance Trust)?