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For example, in cases of divorce where minor children are involved, a court may require an ex-spouse to be named as an irrevocable beneficiary to ensure the children’s financial protection.
The most infamous example would be beneficiaries who clamor against the trustee to "bust the trust" based on the strict limits the trust (or the trustee) may impose on the trust assets. In many of these cases, the UTC provides beneficiaries (and trustees) relief to provide the flexibility needed to dispose of trust property under certain rules.
A grantor transfers property into an irrevocable trust in exchange for the right to receive fixed payments at least annually, based on original fair market value of the property transferred. [2] At the end of a specified time, any remaining value in the trust is passed on to a beneficiary of the trust as a gift. Beneficiaries are generally ...
A charitable remainder unitrust (known as a "CRUT") is an irrevocable trust created under the authority of the United States Internal Revenue Code § 664 [1] ("Code"). This special, irrevocable trust has two primary characteristics: (1) Once established, the CRUT distributes a fixed percentage of the value of its assets (on an annual or more frequent basis) to a non-charitable beneficiary ...
Annuity death benefits. An annuity’s death benefit guarantees a payout to a designated beneficiary after the owner passes away. However, the specifics of this benefit can vary depending on the ...
An irrevocable trust can also protect the beneficiary’s inheritance from collections or creditors. Money in an irrevocable trust does not have to be used to pay debts.
Grantor retained annuity trust ('GRAT'): an irrevocable trust whereby a grantor transfers asset(s), as a gift, into a trust and receives an annual payment from the trust for a period of time specified in the trust instrument. At the end of the term, the financial property is transferred (tax-free) to the named beneficiaries.
Some annuity payments end upon the owner’s death, while others offer death benefits.