An irrevocable land trust is different from a revocable trust. The difference between the two is that once the grantor or the trust owner signs his assets and property over to the beneficiary, he or she has no say in the trust without the beneficiary's permission.
This means that the grantor cannot modify or get rid of the land trust without the permission of the beneficiary once he or she signs the paperwork into the beneficiary's name. This is unlike a revocable trust that the grantor still owns all rights to even after he or she signs everything over to the beneficiary.
The main reason for setting up this type of land trust is to remove all ownership of the assets and property from the original owner. It is mainly for estate and tax purposes. This means that the grantor will no longer be liable for tax payments on his or her assets and property. However, the downside of this is that he or she will not receive tax benefits from the assets and property once the ownership of them are signed over to the beneficiary.
There are a few benefits to having an irrevocable land trust signed over to the beneficiary of your choice. They include:
Irrevocable trusts come in two different types:
To learn more, check out our article, Does A Revocable Trust File A Tax Return?
Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
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