IRREVOCABLE TRUST Meaning and
Definition
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An irrevocable trust is a legal arrangement in which a person, called the grantor, transfers their assets to a third party, known as the trustee, for the benefit of another person or entity, called the beneficiary. The distinguishing feature of an irrevocable trust is that, once established, it cannot be modified, amended, or revoked by the grantor without the consent of the beneficiaries and/or the court's approval. This means that the grantor surrenders ownership and control over the assets transferred into the trust, relinquishing the right to change its terms or take back the assets.
The purpose of establishing an irrevocable trust is often to protect assets from estate taxes, creditors, or to govern the distribution and management of the assets after the grantor's death. Since the assets are no longer considered part of the grantor's estate, they may be excluded from the probate process, ensuring a more efficient transfer of assets and potentially reducing taxes and administrative costs.
Additionally, an irrevocable trust may offer protection against potential lawsuits and creditors, as the assets held within the trust are no longer owned by the grantor. They may also provide long-term care planning, allowing individuals to preserve funds for future medical or personal needs while still qualifying for government assistance programs.
In summary, an irrevocable trust is a legal tool that allows the transfer of assets to a trustee for the benefit of a beneficiary, with the key characteristic being its inability to be modified, amended, or revoked by the grantor once established.
Common Misspellings for IRREVOCABLE TRUST
- urrevocable trust
- jrrevocable trust
- krrevocable trust
- orrevocable trust
- 9rrevocable trust
- 8rrevocable trust
- ierevocable trust
- idrevocable trust
- ifrevocable trust
- itrevocable trust
- i5revocable trust
- i4revocable trust
- ireevocable trust
- irdevocable trust
- irfevocable trust
- irtevocable trust
- ir5evocable trust
- ir4evocable trust
- irrwvocable trust
- irrsvocable trust
Etymology of IRREVOCABLE TRUST
The word "irrevocable" traces back to the Latin word "irrevocabilis", which is formed from the prefix "ir-" meaning "not" or "without" and the verb "revocare" meaning "to call back" or "to revoke". Hence, the word "irrevocable" suggests something that cannot be called back or revoked. Similarly, the word "trust" comes from the Old Norse word "traust", meaning "confidence" or "reliability". In the context of a legal arrangement, a trust refers to a relationship where one party (the trustee) holds and manages assets on behalf of another party (the beneficiary). Therefore, the term "irrevocable trust" refers to a legally binding arrangement where the grantor transfers assets to a trustee, relinquishing their control permanently and without the ability to revoke or call back those assets.
