IRREVOCABLE VS REVOCABLE TRUSTS
- posted: Mar. 07, 2022
In California all trusts are presumed to be revocable by the persons that made them unless the trust specifically provides that it is irrevocable. Revocable settlors (trust makers) can usually revoke these trusts during their lifetime, or remove any property that they put into them. These are called Grantor Trusts under the Internal Revenue Code and do not require a separate income tax return or tax id number.
Revocable or Grantor Trusts, however, usually become irrevocable after the death of the settlors. This is true unless settlors give to someone such as their spouse the right to change the provisions of the trust.
Irrevocable trusts are considered separate taxable entities and require a separate tax ID number and income tax return. Irrevocable trusts, can also be used for Special Needs Trusts for disabled persons, Medi-cal Trusts, Legacy Trusts, Charitable Trusts, Insurance Trusts and for some types of Asset Protection Estate Plans.