differences between irrevocable trust and life estates
an irrevocable trust is a trust that is set up with money or life insurance that can not be modified or changed. a life estate is the transfer of the present possesory right to real property for the duration of someones life and upon their death it reverts to the remaindermen. although its not common to use the term irrevocable life estate it would imply that unlike the normal life estate that can be terminated prior to the possesors life an irrevocable life estate is just that...
without a detailed review by a lawyer can all the issues raised in your question be appropriately addressed...nothing in this response should be construed as establishing a lawyer client relationship..the answers herein are for informational purposes and not to be construed as advice
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Estate Planning Attorney
We could give you a better answer if we knew the context of your question. Why do you ask?
All trusts have 3 parties: The person or person who create it (usually called "grantors"), the person who is in charge of it ("trustee") and the person or persons for whose benefit the trust was created ("beneficiary or beneficiaries"). In an irrevocable trust, the grantor cannot change anything once the trust is created. (Actually, there are some exceptions to that statement, but are not likely of interest here).
A life estate is an interest in real estate where the person who owns the real estate gives away the ownership of the property, but that transfer only becomes effective upon death. The lifetime interest of the person transferring away the remainder interest is known as the "Life Estate." Life estates are irrevocable.
Because of the permanence of these legal tools, only a lawyer who is an expert in trusts and/or real estate law should do them. Self-help is dangerous.
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Estate Planning Attorney
The purpose of an irrevocable trust is usually to transfer assets out of the owner's estate for tax reasons. Basically, the owner of the asset ("grantor") transfers it to a third party who holds the asset as trustee of the irrevocable trust. Once the Grantor has transferred the asset to the trustee, he or she must have no further control over the asset. There are other restrictions imposed by the IRS before the asset can be kept out of the grantor's estate.
a common example it the transfer of an insurance policy on the life of the grantor to the irrevocable trust. The beneficiary may be a child, for example. When the grantor dies, the insurance proceeds go to the trust and then to the beneficiary without passing through the insured's estate.
A life estate is something quite different. Essentially, the owner of property, usually a house, decides that the house will eventually go to a niece, say X, on the owner's death but before X can move into the house, or sell it, the owner's mother, say Y, is given the right to live in the house for her life. Y has a life estate, and X is the "remainderman" (an old-fashioned description) or future beneficiary/owner. Legally, it is more complex and has to do with ownership being "split" into legal interest (the owner) and beneficial interest (the right to occupy the property).
i hope the above is helpful.
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