The most common type of trust is a revocable living trust. The settlor is the person who creates the revocable trust. You need to know that under a revocable trust, the settlor is also the trustee. Once the revocable trust is established, the settlor transfers assets to the trust.
The acting trustee under a revocable trust controls the assets in the trust. Thus, the settler under a revocable trust can still sell those assets if the settlor wants to. The settlor also has the right to amend a revocable trust. For example, a settlor under a revocable trust may wish to drop a beneficiary. A settlor may make changes to their revocable trust for other reasons as well.
An irrevocable trust is much different than a revocable trust. Under an irrevocable trust, the settlor loses the ability to make changes to the trust. For example, the settlor under an irrevocable trust cannot drop a beneficiary.
The settler under an irrevocable trust loses the right to control the assets. Assets under an irrevocable trust must be transferred to a person acting as a trustee. The trustee must be someone other than the settlor. The settlor under an irrevocable trust cannot remove the assets.
The trustee under an irrevocable trust holds legal title to the property. Under an irrevocable trust, the trustee manages the assets. They are managed for the benefit of the named beneficiaries during the settlor’s life. After the trust settler’s death, the trustee distributes them to the beneficiaries.
Two people set up a joint revocable living trust. They are called joint grantors. These trusts are funded with common or separate property. With a joint revocable trust, the surviving spouse will keep their trust property. They also keep their share of community property.
For the difference between revocable vs irrevocable living trust, please contact us. We look forward to assisting you.
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