Listen to a Business English Dialogue About Irrevocable living trust
Addison: Hi Sophia, have you heard about irrevocable living trusts in estate planning?
Sophia: Yes, I think it’s a legal arrangement where a person transfers assets into a trust for the benefit of beneficiaries while still alive, and once established, it cannot be changed or revoked.
Addison: That’s right. Irrevocable living trusts are often used to minimize estate taxes and protect assets from creditors.
Sophia: How does an irrevocable living trust differ from a revocable living trust?
Addison: In a revocable living trust, the person who creates the trust, known as the grantor, can make changes or revoke the trust at any time, whereas in an irrevocable living trust, the grantor relinquishes control over the assets once they’re transferred into the trust.
Sophia: Can the grantor still benefit from assets placed in an irrevocable living trust?
Addison: It depends on the terms of the trust, but typically, the grantor cannot benefit directly from the assets once they’re in the trust, although they may designate beneficiaries who can benefit from the assets.
Sophia: Are there any tax advantages to using an irrevocable living trust?
Addison: Yes, irrevocable living trusts can help reduce estate taxes by removing assets from the grantor’s taxable estate.
Sophia: What happens if the grantor wants to change or revoke the trust after it’s been established?
Addison: Since irrevocable living trusts are designed to be permanent, changing or revoking them can be complex and may require court approval or consent from all beneficiaries.
Sophia: Thanks for explaining, Addison. Irrevocable living trusts seem like powerful tools for estate planning.
Addison: No problem, Sophia. They can provide peace of mind and help ensure assets are managed and distributed according to the grantor’s wishes.