Explain The Difference Between A Revocable Trust And An Irrevocable Trust

Property invested in the Contract Trust Organization must be fixed and irrevocable. Thus the Trustor (contracting investor) may legally be recognized as a different person even when de facto he/she may be the same human being. Trusteeship is a position created by parties at arm’s length which when established is an office to be occupied by any qualified person

The following is a direct cite quote, the court held, “The first of these questions is settled by our decision just rendered in the case of Helvering v. St. Louis Union Trust Co., et al., 296 U.S. 39, 56 S.Ct. 74, 80 L.Ed. 29. By the declaration of trust here under review, the legal title, possession, and control of the trust estate passed irrevocably from the grantor as an individual to himself as trustee. The effect is no different than if the trustee had been another person. Cf. Reinecke v. Trust Co., 278 U.S. 339, 346, 49 S.Ct. 123, 73 L.Ed. 410, 66 A.L.R. 397…” Becker, Collector of Internal Revenue v. St. Louis Union Trust Co., 296 US 48. 50. 50: 80 LEd 35 56 S Ct 78.

The trust becomes a legal juristic, artificial, fictitious, or conventional person/entity, but with rights almost like a natural individual. It is able to own property and conduct business like any person. The trust is irrevocable and no one has reversionary rights to its estate and assets.

1 The trust’s assets are owned by the trust and its business activities managed by Trustees, who accept fiduciary responsibility.

2 The beneficial enjoyment is divided into Capital Units, evidenced by certificates, that convey to the holder only limited rights to receive a pro-rata share of distributions of income or assets when made by the Trustees.

3 The trust’s Certificate Units are the personal property of the holders, but convey neither legal title to the property or any voice in the control or management of the business or the selection of Trustees.

4 The trust when run as a ministry or church auxilary doing non licensed business activities under the church is generally not subject to taxation. However, the certificate holders, if taxpayers, are taxed, but only on what they actually receive personally from the trust.

5 The Trust estate corpus assets are never subject to probate or estate tax since as an fictional person, it never has to die. The trust is set up for purposes in contemplation of life not death, as is the purpose of a will.

6 Trust certificate units become void upon the death of the certificate holder and therefore, they have no value to be subject to probate or estate tax.

7 The life of the Trust can be extended or terminated at any time by the Trustees in accordance with the trust indenture. At that time the beneficial enjoyment is distributed to the certificate holder(s).

Next Below Rewrite it!!!!!

Why Is An Irrevocable Better?

REVOCABLE TRUST:

Some say a Revocable trust is better because it is one in which the Grantor putting property into the trust can change his or her mind and terminate the trust and reverse the transfer into the trust, thereby he or she can take back the assets placed into the revocable trust. Sounds great but regrettably, this type of trust, a revocable trust, does not protect your estate from several forms of taxes and other types of future claims against the Grantor, that being you if this is the type of trust you chose.

With a revocable type of trust the Grantor still has control of the assets and therefore, holds liability and the property can be attached to situations outside the trust. For instance:

If you chose a revocable trust and find yourself involved in some typr of lawsuit unexpectedly and the court grants a judgment against you personally, in the case of you having a revocable trust, the judgment creditor can make you to revoke the trust and obtain trust assets to satisfy the judgment the creditor won.

In an addition, a revocable trust is heavily regulated compared to some other types of irrevocable trusts. For example, a revocable living trust which many people create, this type of trust is subject to the application of federal estate taxes and state inheritance taxes. Also, because the revocable trust is identified with your social security number, its easily identified with you.

Please understand too, most living trusts that are set up are done so as revocable trusts and they provide no privacy or protection against frivolous suits. Nor do they avoid estate taxes.

So bottom line, there’s little to no privacy, asset protection or tax relief benefits with revocable trust by and large.

Irrevocable Trust:
The Christian Stewardship Business Trust, an irrevocable trust, can be created in such a way that the trust can be created by a third party at arms length and controlled and managed by the Trustee(s) (You being Trustee in this scenario) where legal and equitable title is vested in the Trustee(s) who can put property into the trust; and the trust is a separate legal entity from the Creator and the one(s) putting property in the trust called an exchanger(s) or the Trustee(s) that may irrevocably put property into the trust also.

Therefore if you chose this type of trust if there was a judgment granted against you personally, it does not affect the assets of the trust that you are Trustee(s) for. Again, because the irrevocable trust is set up as a separate legal entity similar to a corparation but significantly different now the judgment creditor cannot get the assets in the trust which is a separate legal person apart from the trust Creator or Exchanger(s) or Trustee(s).

With a Christian Stewardship – Business Trust which is an irrevocable trust you can lawfully avoid estate taxes, inheritance taxes, and probate costs.

Oh Yeah! Let’s not forget, Privacy, Limited Liability, and Protection of Assets are what they are best known to help with and provide too.

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